Your guide to uncharted territory
When a single miner controls, or group of miners collude to control, over 50% of a network's mining hashrate or computational power.
When a token is distributed to the public for having been an active participant within a protocol or blockchain and/or for holding a particular digital asset.
Any coin that’s not Bitcoin. Altcoins can be anything from the second-most popular coin, Ethereum, to any of the thousands of coins with minimal market value.
Application Specific Integrated Circuit (ASIC)
A computer chip designed specifically to achieve the highest perform for a particular use case (e.g. hashing a specific mining algorithm like SHA-256 for Bitcoin)
The transaction of one cryptocurrency for another without requiring the use of a centralised intermediary. Atomic swaps are enabled by smart contracts.
Every Ethereum block is comprised of base fees and priority fees. The base fee acts as a minimum required price, per unit of gas, for an action to be included in the next block.
After EIP-1559, every time a block is mined, the base fee is "burned", removing it from circulation.
Ethereum's parallel blockchain layer where Proof of Stake (PoS) consensus mechanism was launched. The Beacon Chain controls and coordinates Ethereum stakers that partake in validating and securing the network.
The first and most valuable cryptocurrency, launched on Jan. 3, 2009. Bitcoin is the first representation of a trustless, borderless, decentralised, transparent peer-to-peer payment system.
An opened source project which maintains and releases the software that enables users to interact with the Bitcoin network.
It is a direct descendant of the original Bitcoin software client released by Satoshi Nakamoto after he published the famous Bitcoin whitepaper.
The ratio of Bitcoin's market capitalisation versus the sum of the market capitalisation of all other cryptocurrencies.
Bitcoin Inscriptions and Ordinals
In December 2022, Casey Rodarmor (a Bitcoin developer) released ORD, an open-source software that runs on top of a Bitcoin Core full node. The software wnables Bitcoin users to encode computer files inside a Bitcoin transaction (“inscription”) and attach it to an individual satoshi, effectively creating a Bitcoin NFT (“ordinal”).
Groups of data within a blockchain. On cryptocurrency blockchains, blocks are made up of transaction records as users transact coins. Each block can hold only a certain amount of information. Once it reaches that limit, a new block is formed to continue the chain.
A product that allows users to browse public blockchain data, including information about block production, transactions, address balances and token ownership.
The hash of the block header which serves as the proof of validity of the current block and every block prior.
The sequential number of the block in a blockchain between itself and the genesis block. Block height 0 is the first block of a blockchain, or the genesis block.
The absolute time it takes for the network to find a solution to the block hash (i.e. create the next block).
A digital form of record keeping, and the underlying technology behind cryptocurrencies. A blockchain is the result of sequential blocks that build upon one another, creating a permanent and unchangeable ledger of transactions (or other data).
In the absence of transparent reporting, the best approximation for the number of crypto coins/tokens that are publicly available and circulating in the market.
A digital asset that circulates on the internet as a medium of exchange. It employs blockchain technology — a distributed ledger of transactions that is publicly available — and is secured by advanced cryptography.
This revolutionary asset architecture allows for certainty that cryptocurrency coins and tokens cannot be double-spent even in the absence of a centralised intermediary.
The first cryptocurrency to achieve mainstream success was Bitcoin which paved the way for the proliferation of many other cryptocurrencies.
Cold Wallet or Cold Storage
A secure method of storing your cryptocurrency completely offline. Many cold wallets (also called hardware wallets) are physical devices that look similar to a USB drive.
This kind of wallet can help protect your crypto from hacking and theft, though it also comes with its own risks – like losing it, along with your crypto.
The principle of distributing power away from a central point. Blockchains are traditionally decentralised because they require majority approval from all users to operate and make changes, rather than a central authority.
Decentralised Applications (dApps)
Applications designed by developers and deployed on a blockchain to carry out actions without intermediaries. Decentralised finance activities are often completed using decentralised apps.
Assets that have a digital representation of value or contractual rights that can be transferred, stored or traded electronically and whose ownership is either determined or substantially affected by a cryptographic proof or distributed ledger technology.
Decentralised Autonomous Organisation (DAO)
A company or organisation that operates under a system of rules encoded as a computer program that is often transparent, controlled by the organisation's members and not influenced by a central body.
Decentralised Finance (DeFi)
Financial activities conducted without the involvement of an intermediary, like a bank, government, or other financial institution.
DeFi is a major growth sector in blockchain that offers peer-to-peer financial services. DeFi exchanges, loans, investments, and tokens are significantly more transparent, permissionless, trustless, and interoperable than traditional financial services.
A core tenet of this sector is decentralised governance organisational methods that foster equitable stakeholder ownership.
Decentralised Exchange (DEX)
A measure that represents the difficulty of finding a hash that meets the pre-defined requirements outlined in the protocol rules.
The periodic recalibration of how hard it is for miners to create a new block. For Bitcoin, this takes place every 2,016 blocks, or roughly every two weeks, to ensure that blocks are mined approximately every 10 minutes.
A unique digital identifier that allows for a user to distinctly verify the validity of a file or transaction.
Dollar Cost Averaging (DCA)
Investing a fixed amount of dollars into an asset in regular time intervals regardless of the price or volatility of the asset (e.g., investing $10 into Bitcoin on Monday every week).
When an asset on a blockchain is spent more than once from the same sender. This usually coincides with a 51% attack on the network or a critical bug in the code base.
Ecosystem is the common description of Crypto Assets that are built on top of a specific blockchain or protocol. For example:
- The Ethereum Ecosystem - includes all tokens (e.g., ERC-20, ERC-721, etc) and tooling that are built on the Ethereum blockchain.
- The Synthetix ecosystem - which includes Lyra, Kwenta, Thales, which all leverage the Synthetix platform and its synthetic assets within their applications.
The native cryptocurrency of the Ethereum blockchain.
Also abbreviated as ETH or its symbol Ξ (the Greek uppercase Xi character).
The second largest cryptocurrency by trade volume, Ethereum is a crypto network and software platform that developers can use to create new applications, and has an associated currency called ether.
When a blockchain’s users make changes to its protocol (the rules that govern the blockchain), a fork can result. This results in two blockchains, one that follows the old rules, and a new blockchain that splits off from the previous one. (Example: a fork of Bitcoin resulted in Bitcoin Cash).
A perpetual contract's funding rate is based on two components:
- The interest rate - a function of interest rates between the base currency and the quote currency.
- The premium - varies according to the price difference between futures and spot markets.
In general, when a perpetual futures contract is trading on a premium (higher than the spot markets), long positions have to pay shorts due to a positive funding rate. Such a situation is expected to drive the price down, as longs close their positions and new shorts are opened. In contrast, when a perpetual futures contract is trading on a discount, short positions pay longs.
The unit that measures the computational effort required to execute specific operations on the Ethereum network. Gas is paid in ether (ETH), the native cryptocurrency of Ethereum.
The first block of a cryptocurrency ever mined.
An abbreviation of gigawei, which is the denomination of ether (ETH) that is commonly used to price gas.
- 1 gwei = 109 wei
- 109 gwei = 1 ether
Stands for “Hold On for Dear Life” though the term originated from a user typo of "hold" on a Bitcoin forum in 2013. It refers to a passive investment strategy in which people buy and hold onto cryptocurrency — instead of trading it — in the hopes that it increases in value.
A feature written into Bitcoin’s code in which after a certain number of blocks are mined (typically every four years) the amount of new Bitcoin entering circulation gets halved. The halving impacts Bitcoin’s inflation rate.
A unique string of numbers and letters produced by a hash function after a piece of data is input.
A unit of measurement for the speed at which a computer is able to perform hashing computations (measured as hash computations performed per second).
A software-based cryptocurrency wallet connected to the Internet. While more convenient for quickly accessing your crypto, these wallets are more susceptible to hacking and cybersecurity attacks than offline wallets — just as files you store in the cloud may be more easily hacked than those locked in a safe in your home.
Initial Coin Offering (ICO)
A public fundraising method for new cryptocurrency projects. ICOs are similar to Initial Public Offerings (IPOs) of stocks.
Initial margin is the minimum value required to open a leveraged trade position. For example, an initial margin of 1 BTC can be used to purchase 10 BTC (at 10x leverage). This initial margin acts as the collateral for a leveraged position.
Refers to the price risk taken by users who deposit assets into liquidity pools such as those utilised by UniSwap. Users earn fees for providing liquidity, but can lose value if there are adverse price moves whilst their assets are in the liquidity pool.
In the decentralised ecosystem, a layer 1 network refers to a base level blockchain (e.g. Bitcoin, Ethereum or Solana)
A network or technology that operates on top of an underlying blockchain protocol, typically to improve its functionality, scalability and efficiency.
This category of scaling solutions entails shifting a portion of a blockchain protocol’s transactional burden to an adjacent system architecture, which then handles the brunt of the network’s processing and only subsequently reports back to the main blockchain to finalise its results.
A liquidity pool is a collection of crypto assets locked within a smart contract.
Liquidity pools have been one of the foundational technological innovations in DeFi and have been used to facilitate decentralised trading, lending, and many more functions.
The total value of all the coins that have been mined. You can calculate a crypto’s market cap by multiplying the current number of coins by the current value of the coins.
A 'fully diluted' market capitalisation uses the total number of coins that will be mined for tokens with a hard cap limit, e.g. Bitcoin at 21 million.
Maximum Extractable Value (MEV)
Maximal extractable value (MEV) describes the process miners or validators conduct in order to maximise the value that they can extract from producing a block in excess of the standard block reward and gas fees. Miners and validators can extract the additional value by including, excluding, or changing the order of transactions in a block.
The merge refers to Ethereum's original execution layer (which utilised a Proof of Work consensus algorithm) merging with the new execution layer (which utilises a Proof of Stake consensus algorithm) called the Beacon Chain.
Also known as the "transaction pool," the "transaction queue," or "pre-chain,". The mempool is the waiting room for all unconfirmed/pending transactions. It's like an organised waiting list for storing and sorting blocks before they are added to the blockchain.
The cryptographic process whereby new cryptocurrency coins are made available and the log of transactions between users is maintained under Proof of Work protocols (e.g. Bitcoin)
The reward for successfully adding a block to the end of a blockchain often sees the proposer of the block credited with its native token. In Bitcoins case for example Miners get a BTC reward for each block they add, this is the only way new BTC is issued.
A computer that connects to a blockchain network, staking service, block validator or any other computerised service to blockchains.
Non Fungible Token (NFT)
Cryptographic token used to represent the ownership of unique digital items, for example art or collectibles.
Peer to Peer
Two users interacting directly without a third party or intermediary.
Perpetual Futures Contract
A perpetual futures contract is a special type of futures contract invented by Bitmex. Unlike traditional futures contracts, perpetual contracts have a few key differences:
- There is no expiry or settlement
- Perpetual Contracts mimic a margin-based spot market and hence trade close to the underlying reference Index Price. A funding mechanism is used to tether contracts to their underlying spot price.
Thus, unlike conventional futures, perpetual contracts are often traded at a price that is equal or very similar to spot markets.
Price to Fees (P/F)
A valuation multiple calculated as Market Capitalisation divided by Fees. Where fees refers to the total, annualised fees generated by the protocol.
Price to Sales (P/S)
A valuation multiple calculated as Market Capitalisation divided by revenue. Where revenue refers to the total, annualised revenue generated by the protocol, that are distributed to token holders
A basic set of rules that allow data to be shared between computers. For cryptocurrencies, they establish the structure of the blockchain - the distributed database that allows digital money to be securely exchanged on the internet.
Your wallet’s address, this can be thought of as your bank account number for receiving funds. You can share your public wallet key with people or institutions so that they can send you digital assets.
The encrypted code that allows direct access to your cryptocurrency. Like your bank account password, you should never share your private key. Whoever knows the private key has full control of your crypto assets.
Proof of Reserves
An independent audit conducted by a third party, seeking to ensure that a custodian holds the assets it claims to on behalf of its clients.
Proof of Stake (PoS)
Proof of Stake is an alternative consensus mechanism to Proof of Work. Rather than requiring miners to conduct high computational activity, validators must stake coins into the network, and in doing so, provide a financial bond.
This significantly reduces the energy consumption requirements of a blockchain that utilises POS, as opposed to POW.
Proof of Work (PoW)
Proof of work is the original crypto consensus mechanism utilised by Bitcoin. It is the process of miners conducting high computational activity (the work) to become the first to solve a cryptographic puzzle. The winner gets the rights to process the latest set of transactions and update the blockchain, for which they receive a predefined reward.
The cost and energy required to solve these puzzles are what gives security and immutability to the Blockchain.
Real yield is the share of a protocol’s revenue distributed to a protocol's governance token holders that stake or lock their assets. Real yield can either be denominated in the protocol's governance token or a mainstream asset like ETH or USDC.
Real yield is captured from paying users of a protocol, thus represents 'rea' revenue, in contrast to the revenue attain from inflationary token emissions.
A rebasing token is one in which the circulating supply adjusts automatically in response to a smart contract. For example Lido staked ETH (stETH) increases supply to account for staking rewards, and decreases supply if a validator is slashed
Protocols that batch transactions, and then post the data to a layer 1 blockchain (e.g. Ethereum) when consensus is reached in order to enable improved transaction throughput.
Optimistic and Zero-knowledge are the two primary forms of rollup currently in use.
The pseudonymous creator of Bitcoin. No one knows the true identity of Nakomoto — or if it’s more than one person.
The smallest denomination of bitcoin (BTC).
- 1010 sats = 1 bitcoin
A self-executing code or protocol that carries out a set of instructions that is verified on the blockchain.
Smart contracts are trustless, autonomous, decentralised, and transparent; they are irreversible and unmodifiable once deployed.
While they have several use cases, some of the most popular are financial contracts (loans, derivatives, trading). They can also be used for legal contracts, identity management, and numerous other use cases.
A digital currency created with the intent of holding a stable value. The value of most existing stablecoins is tied directly to a predetermined fiat currency or tangible commodity and pegged 1:1 to the US dollar for example.
Stablecoins typically maintain their value through a collateral backing, which can be anything from US treasuries to commodities or even other crypto assets.
The largest stablecoins are USD denominated USDC and Tether.
Staking is the process through which a blockchain network user 'stakes' or locks their cryptocurrency assets on a network as part of the consensus mechanism, thus ensuring the security and functionality of the chain.
Staked assets are usually held in a validator node, crypto wallet or smart contract, and in order to encourage staking most projects reward the holders of staked tokens with annualised financial returns, which are typically paid out on a regular basis.
Staking is a core feature of Proof-of-Stake (PoS) blockchain protocols.
Tooling are the systems and tools built to develop maintain and utilise Digital Assets, examples of tooling include;
- Exchanges - centralised and decentralised exchanges provide liquidity and trading services
- Marketplaces - Opensea for example provides an auction house for NFTs
- Explorers - easily view blockchain specific information - Etherscan allows you to view transactions, stats and wallets on the Ethereum network
- Wallets - help manage and store your Crypto Assets
- Smart contract builders - allow you to create a smart contract with little or no code or experience
- Graphical User Interfaces (GUIs) - manage products and assets in a user friendly interface so to not require command line interactions (coding)
- Libraries - pre-existing code that can be pulled in to speed up development
- Tutorials/courses - education and awareness for everyone
Total Value Locked
The value (usually denominated in USD) of all assets locked into a DeFi protocol or ecosystem.
The smallest denomination of ether (ETH).
- 1018 wei = 1 ether