Crypto Glossary
40 terms explained in plain language — from blockchain fundamentals to the global regulatory concepts (VASP, the Travel Rule, Proof of Reserves) worth knowing before you use any exchange.
A
B
C
CARF (Crypto-Asset Reporting Framework)
A global OECD standard for the automatic exchange of tax information about crypto transactions between countries.
Cold wallet vs. hot wallet (offline and online wallets)
A hot wallet is connected to the internet and convenient for everyday use; a cold wallet stores keys offline and is safer for larger amounts.
Crypto Tax Reporting
The general concept that crypto disposals (selling, trading, sometimes spending) are usually taxable events — the specific rates, forms, and rules vary enormously by country.
Crypto wallet
A tool for storing the private keys you use to manage the cryptocurrencies recorded on the blockchain.
D
DeFi (Decentralized Finance)
An ecosystem of financial applications running on blockchain via smart contracts, without banks or other central intermediaries.
DEX vs. CEX (decentralized vs. centralized exchange)
A DEX is an exchange running on smart contracts with no intermediary; a CEX is a traditional exchange run by a company, such as Binance or Kraken.
G
Gas fee (transaction fee)
A fee paid to the blockchain network for processing a transaction or executing a smart contract, e.g., on Ethereum.
Global Stablecoin (GSC)
A term used by international financial regulators for a stablecoin with a user base and transaction volume large enough to pose systemic risk.
H
M
Market Capitalization (Market Cap)
The total value of all units of a given cryptocurrency in circulation, calculated as price multiplied by circulating supply.
Money Transmitter License / Exchange Licensing
The general concept of the government authorization an exchange needs to legally move customer funds — the specific license required varies enormously by country.
P
Private key
A secret cryptographic code that gives full and exclusive control over the funds recorded at a given blockchain address.
Proof of Reserves
A cryptographic or audit-based demonstration that an exchange actually holds the customer funds it claims to, published to build trust after high-profile collapses.
Proof of Stake (PoS)
A consensus mechanism in which the right to validate transactions depends on the amount of coins locked (staked), not computing power.
Proof of Work (PoW)
A consensus mechanism in which computers (miners) compete to solve cryptographic puzzles in order to validate a new block of transactions.
R
Regulatory Arbitrage
The practice of a company structuring its operations or choosing its home jurisdiction specifically to benefit from a more favorable regulatory regime elsewhere.
Rug Pull
A scam in which the creators of a crypto project suddenly withdraw all liquidity or investor funds and disappear.
S
Sanctions Screening
The process exchanges use to check customers and transactions against government sanctions lists, blocking access for flagged individuals, entities, or countries.
Security Token vs. Utility Token
A security token represents an investment contract subject to securities law; a utility token grants access to a product or service.
Seed phrase (recovery phrase)
A sequence of 12-24 random words from which all of a wallet's private keys can be restored.
Slippage
The difference between the expected and actually executed price of a transaction, resulting from a price change or low market liquidity.
Smart contract
A program recorded on the blockchain that automatically executes programmed conditions without an intermediary.
Smart Contract Audit
An independent security review of a protocol's code, checking for bugs or vulnerabilities before (or after) it goes live with real user funds.
Stablecoin
A cryptocurrency designed to maintain a stable value, most often pegged 1:1 to the US dollar.
Staking
Locking up cryptocurrency you hold on a Proof of Stake network in exchange for rewards, usually paid in the same cryptocurrency.
Systemic Risk (Contagion)
The risk that the failure of one crypto company or protocol triggers cascading losses across others it was financially connected to.
Frequently asked questions
How is this glossary different from others?
Beyond basic technical terms (Bitcoin, blockchain, staking), we also cover global regulatory-literacy concepts — VASP, the Travel Rule, Proof of Reserves, FATF — that most general crypto glossaries skip, since regulation is a real part of using crypto safely regardless of what country you're in.
Are the definitions kept up to date?
Yes, we try to keep them current as the underlying concepts and regulations evolve. If you have doubts about a specific legal or tax situation, consult a professional — our entries are general information, not advice for your specific circumstances.