Crypto glossary

The glossary now has 33 terms, those of the published lessons. It does not show up in search results yet (search engines will not index it) and we are not adding it to the sitemap until it covers many more terms, around a hundred. We promise no date.

A

address

A short string of characters, derived, in its simplest form, from the public key, to which funds can be sent; it can be shared with others. Unlike a bank account, anyone who has the address can see all its transactions in the public ledger.Example: You give a friend your address so they can send to you; you never give them the private key.Lesson: Private key, public key and address

B

Bitcoin

The first crypto-asset, launched in 2009: a system of electronic payments between people, with no intermediary, based on a public blockchain.Example: "Bitcoin" with a capital usually means the network and its rules; "bitcoin" in lowercase, the unit.Lesson: Bitcoin in plain words

block

A group of verified transactions put together on one "page" of a blockchain's ledger, linked to the previous page.Example: A Bitcoin block holds many transactions, plus the hash of the block before it.Lesson: What a blockchain is

blockchain

A shared ledger, copied on many computers, where transactions are grouped into blocks linked by hashes, so a change in the past is noticed at once.Example: Bitcoin uses a blockchain to keep track of every bitcoin transfer.Lesson: What a blockchain is

C

central bank

The public institution of a country (or currency area) that issues money, oversees the banking system and watches over price stability.Example: The National Bank of Romania is the central bank of Romania.Lesson: What money is and why trust matters

confirmation

The fact that a transaction has entered a block of the blockchain; the more blocks are added after it, the harder it is to undo.Example: A merchant may wait for one or more confirmations before treating a payment as received.Lesson: Bitcoin in plain words

crypto-asset

A digital asset that uses cryptography and a distributed ledger; central banks prefer the term "crypto-asset" to "cryptocurrency".Example: Bitcoin is a crypto-asset, like many others that exist.Lesson: What can go wrong

custody

Who keeps the keys to an asset: you (self-custody) or a company on your behalf (third-party custody).Example: Whoever has the keys has control; that is why it matters where they are kept.Lesson: What can go wrong

D

decentralised

Without a single centre of control: the rules are applied by many independent computers, not by one company or institution.Example: A network of nodes that check transactions themselves, with no bank in the middle, is decentralised.Lesson: Bitcoin in plain words

digital money

Money that exists only as electronic records, for example the balance in a bank account, not as banknotes or coins.Example: When you pay by card, your bank subtracts the amount from your account and adds it to the merchant's.Lesson: What money is and why trust matters

digital signature

A mathematical proof made with the private key, showing that the message comes from the holder and was not altered.Example: The wallet signs the transaction; anyone can check the signature with the public key.Lesson: Private key, public key and address

double spending

Trying to spend the same money twice; with digital money it is possible unless a shared record shows what has already been spent.Example: A file can be copied, but a spent bitcoin shows as spent in the shared ledger and cannot be spent again.Lesson: Bitcoin in plain words

F

fiat money

Money whose value does not come from the material it is made of but from trust in whoever issues it and in how the economy is managed.Example: Banknotes and the money in a bank account are fiat money; a banknote cannot be exchanged for a fixed amount of gold.Lesson: What money is and why trust matters

fraud

Deception by which someone tricks you into giving them money, data or access, usually through false promises or impersonation.Example: A message promising guaranteed gains if you send money first is a classic sign of fraud.Lesson: What can go wrong

H

hash

A fixed-length fingerprint computed from any text or data: the same data always gives the same fingerprint, and a tiny change gives a completely different one.Example: SHA-256 turns "Hello" into a string of 64 characters; "hello" (lowercase) gives an entirely different one.Lesson: What a blockchain is

I

inflation

A general rise in prices over time, which makes the same sum of money buy less.Example: If a basket of groceries costs more than last year, prices have risen in general.Lesson: What money is and why trust matters

L

ledger

A record where it is written down who owns what and what happened, in the order it happened.Example: A bank statement is a part of a ledger kept by the bank.Lesson: What a blockchain is

leverage

Using borrowed money to take a position larger than your own money; it enlarges both gains and losses.Example: Hypothetical example: with 10x leverage, a 10% fall in the price can wipe out all of your own money in the position.Lesson: Why the price moves so much

limited supply

A rule in the protocol that fixes the maximum number of units that will ever exist, instead of anyone being able to create as many as they like.Example: Bitcoin has a limit written in its rules: 21 million units. That says nothing about the price.Lesson: Bitcoin in plain words

M

MiCA

The European Union regulation on markets in crypto-assets: it sets uniform rules for issuers and service providers. It does not remove the risks.Example: A firm offering crypto-asset services in the EU has to follow MiCA rules, but the investment stays risky.Lesson: What can go wrong

mining

The process by which computers in the Bitcoin network compete to add the next block of valid transactions and are rewarded for it.Example: Mining makes it very expensive for anyone to rewrite old blocks.Lesson: Bitcoin in plain words

money

What people commonly accept to pay for goods and services, to keep value over time and to compare prices.Example: You pay for bread with leu, and you compare its price with other products in the same unit.Lesson: What money is and why trust matters

N

node

A computer that is part of a blockchain network, keeps a copy of the ledger and checks that transactions follow the rules.Example: Thousands of nodes can independently check the same new block.Lesson: What a blockchain is

P

phishing

A fraud where someone pretends to be a known company or service, through a message or a fake site, to steal your data or access.Example: An "urgent" email with a link to a site that looks like a real service and asks for your recovery phrase.Lesson: What can go wrong

private key

A secret number that gives you control over the funds at an address and with which you sign transactions. It is never given to anyone.Example: Whoever gets your private key can move the funds, and whoever loses it can no longer use them.Lesson: Private key, public key and address

public key

The part that can be shown to anyone, computed from the private key; it checks signatures made with the private key without revealing it.Example: The network uses the public key to see that a transaction was signed by the owner.Lesson: Private key, public key and address

R

recovery phrase (seed phrase)

A string of words from which a wallet can rebuild its keys; whoever has it controls the funds, so it is as secret as a private key.Example: No legitimate service asks for your recovery phrase, neither on a site nor in messages.Lesson: Private key, public key and address

risk of total loss

The possibility that the amount put into an asset is lost entirely, not just in part.Example: With crypto-assets the value can fall to zero: the amount put in can be lost entirely.Lesson: What can go wrong

S

supply and demand

How many want to buy (demand) compared with how much is offered for sale (supply); the balance between them moves the price.Example: If many want to sell and few want to buy, the price tends to fall.Lesson: Why the price moves so much

T

trading platform

An online service through which people buy, sell or hold crypto-assets; usually the company running it keeps the keys.Example: If a platform that holds your funds runs into trouble, your access to them can be affected.Lesson: What can go wrong

transaction

A transfer of value between two addresses, recorded in the ledger once it has been checked.Example: You send an amount to a friend's address; the transaction shows up in the blockchain once confirmed.Lesson: Bitcoin in plain words

V

volatility

How much and how fast a price changes up and down over a period of time.Example: A price that rises and falls sharply in a day is volatile, whatever direction it ends up in.Lesson: Why the price moves so much

W

wallet

A program or device that keeps the keys with which you can use funds on a blockchain; it does not "hold" coins, it holds keys.Example: A wallet app shows your balance by reading the blockchain and signs transactions with your private key.Lesson: Private key, public key and address