Crypto vocabulary can make a straightforward question feel harder than it is. This glossary explains widely used terms in plain language. Definitions are educational summaries, not a substitute for checking the documentation of a specific network, wallet or exchange.
Core blockchain terms
| Term | Plain-English meaning |
|---|---|
| Blockchain | A shared record of transactions that is maintained across a network rather than by one central database. |
| Block | A batch of transactions or records that a network adds to its ledger according to its protocol rules. |
| Node | A computer that participates in a blockchain network, often by relaying or validating information. |
| Consensus | The rules and process a network uses to agree on the state of its ledger. |
| Proof of work | A consensus approach in which participants expend computational work to help secure a network. |
| Proof of stake | A consensus approach in which network participants typically commit assets under protocol rules to help validate activity. |
| Smart contract | Code deployed to a blockchain that can execute defined actions when its conditions are met. |
| Token | A digital asset issued on, or represented by, a blockchain. Its function differs by project. |
Wallet and security terms
| Term | Plain-English meaning |
|---|---|
| Wallet | Software or hardware used to manage the credentials that allow interaction with crypto assets. |
| Self-custody | An arrangement in which the user, rather than an exchange or custodian, controls the credentials needed to move assets. |
| Private key | A secret credential that can authorise transactions. Anyone who obtains it may be able to control the associated assets. |
| Seed phrase | A sequence of recovery words that can regenerate a wallet’s private keys. It should never be shared. |
| Hot wallet | A wallet connected to the internet, often used for accessibility and regular transactions. |
| Cold wallet | Wallet credentials kept offline, generally used to reduce exposure to online threats. |
| Hardware wallet | A dedicated physical device that helps keep transaction-signing credentials separate from a general-purpose computer or phone. |
| Phishing | A scam that impersonates a trusted service to persuade someone to disclose credentials or approve a malicious transaction. |
Market and investing terms
| Term | Plain-English meaning |
|---|---|
| Market capitalisation | A commonly quoted estimate calculated by multiplying an asset’s price by an asserted circulating supply. It is not the same as cash invested. |
| Liquidity | How readily an asset can be bought or sold without a large change in price. |
| Volatility | The degree to which an asset’s price changes over time. High volatility means large or frequent swings. |
| Drawdown | The decline from a prior high to a later low. CryptoRetail reports maximum weekly-close drawdown on relevant tools. |
| DCA | Dollar-cost averaging: investing an equal amount on a regular schedule, regardless of price movement. |
| Stablecoin | A crypto asset designed to seek a stable reference value, often linked to a currency. The mechanism and risks vary by issuer. |
| DeFi | Decentralised finance: blockchain-based applications that may offer trading, lending or other financial functions through smart contracts. |
| Gas fee | A network charge for processing an on-chain transaction, common on networks such as Ethereum. |
How to use this glossary
Definitions help with orientation, but the details matter. A wallet’s security model, a stablecoin’s reserve structure, or a staking programme’s conditions cannot be understood from one word alone. If a term affects an important decision, use it as a starting point and then read the official documentation for the relevant product or network.
For historical-return questions, start with the calculator directory. For an explanation of how its data is sampled, read the methodology.