Basic Crypto Terms (Glossary)

Address

An address looks like a long string of random letters and numbers. Addresses are used when you want to send or receive cryptocurrencies. Each wallet has at least one receiving and one sending address. When you want to receive crypto to your wallet, you need to give the sender your receiving wallet address.

SEE “WALLETS” FOR IMPORTANT INSTRUCTIONS regarding keeping your crypto safe, AT ALL TIMES.

A.M.L. & K.Y.C.

Anti Money Laundering and Know Your Customer is a group of laws in the United States that require Bitcoin sellers to know who their customers are. Certain sellers will ask for your identification to comply with these laws. Other countries around the world may have similar laws and requirements.

Blockchain

The blockchain is the technology behind cryptocurrencies. It’s what makes it work. Crypto transactions are sent to the blockchain so that miners can put them into the blocks that they mine (in some cases, outside of Bitcoin specifically). Once a block containing your transaction is mined it has been added to the blockchain and your transaction receives one confirmation.

Blockchain.info

Not to be confused with the blockchain, blockchain.info is one of many websites that work as blockchain explorers. These websites allow you to ‘see’ the blockchain and what’s going on in it. In practical terms this lets you view your transactions and see if they are confirmed or not. You can also check to see how many unconfirmed transactions there are, the more the longer it will take for your transaction to become confirmed.

Block

A “block” is one “link” in the blockchain. One block contains a group of transactions that have been confirmed. When miners ‘mine’ these blocks, they calculate through computer algorithms, which when put in the blockchain… confirms transactions. In turn, miners receive transaction fees and newly created coins for confirming transactions.

BTC

BTC is the acronym for Bitcoin. All cryptos have their own.

Cold storage/Cold wallet

This refers to a way of storing Bitcoins in a safe and secure way, offline.

SEE “WALLETS” FOR IMPORTANT INSTRUCTIONS regarding keeping your crypto safe, AT ALL TIMES.

Confirmation

For a crypto transaction to be completed it needs to be confirmed. Good habits are to wait for at least 3-6 confirmations before you can consider a transaction good. A confirmation happens when a transaction has been added to a block that (Bitcoin) miners successfully mine.

Exchange

An exchange is a platform/service where users can change one type of currency for another.

Fiat

Fiat comes from Latin and means “let it be done” or “it shall be”. It’s used as a term to mean all currencies that derive their value from governmental regulation or other central authorities. The U.S. dollar is a fiat currency.

Hot wallet

The opposite of a cold wallet / cold storage. A hot wallet is located on a computer connected to the internet. The hot wallet is where a smaller amount of cryptos are stored. It’s from here where your transactions are sent. A very small amount of crypto is stored here to protect exchanges from hackers and malware.

SEE “WALLETS” FOR IMPORTANT INSTRUCTIONS regarding keeping your crypto safe, AT ALL TIMES.

Mining

This is what crypto miners do in order to confirm transactions and add them to the blockchain. When a crypto miner mines, he/she uses computers to do difficult calculations which answers are easily proven to be correct. This way, when a miner completes a calculation, anyone can easily see that the miner has actually done the work. This work can then be used to create a block. What miners get in return from mining is new Bitcoins (or other coins).

Multisig

Multi-signature, often heard in combination with wallet. A multi-signature wallet is one that has several cryptographic keys concerned with it. This way if you have two of three keys, you can move money out of it. With less than two, you cannot access the wallet.

SEE “WALLETS” FOR IMPORTANT INSTRUCTIONS regarding keeping your crypto safe, AT ALL TIMES.

P2P

Peer-to-Peer. It’s a form of network structure. Rather than having everything go via a centralized node, in a peer-to-peer structure everything goes from user to user. There’s no centralized part to rely on.

Satoshi

A satoshi is the smallest amount of Bitcoin that can be sent, or 0.00000001 BTC. 100 million = 1 BTC.

Satoshi Nakamoto

The pseudonym of the person who invented Bitcoin. No one knows who he is, but he does own quite a nice amount of BTC.

Transaction

A crypto transaction, is the actual act of moving crypto, from one wallet to another.

Transaction fee

Since the miners work to confirm your transactions, they won’t do this for free. Rather you pay a tiny amount of crypto to them to help them continue to confirm. This is why each time you move crypto, it costs a tiny bit.

txid

Transaction Id. This is a long string of numbers and letters that is the ID of a single transaction. It’s handy to know as you can paste this into a blockchain explorer and see what’s up with your transaction. It’s mainly used to see how many confirmations a transaction has.

Wallet

The place where you store your cryptos. This can be confusing to new users, but a wallet is essentially just a crypto address. A wallet can exist on a service such as Binance, in an app on your phone or computer, or even on a piece of paper (paper wallets). it’s just a series of numbers and letters.

SEE “WALLETS” FOR IMPORTANT INSTRUCTIONS regarding keeping your crypto safe, AT ALL TIMES.