A compilation of words you should know relating to crypto, Web3, the metaverse, and more.
We are moving into a new digital age — one that has brought unto the masses a new lexicon of technical terms that are easy to confuse, conflate, or just misunderstand.
It’s important we educate ourselves now because we’re all learning as we go. While cryptocurrency has been around for quite some time, the industry is growing tremendously, right along with NFTs and the metaverse.
In an effort to foster more understanding, we compiled these terms and their definitions. Think of this as a cheat sheet to Web3.
Crypto, Metaverse, and Web3 Terms to Know
Airdrop: an unsolicited marketing tactic in the blockchain where crypto projects send free coins to their community.
Altcoin: shorthand for alternative coin, altcoin is a term used to describe other types of cryptocurrencies outside of Bitcoin.
ApeCoin: the token associated with the Bored Ape Yacht Club. The crypto is owned and operated by the ApeCoin DAO, which is supported by a legal steward organization called the Ape Foundation.
Bitcoin: a decentralized digital currency that relies on peer-to-peer technology to carry out instant transactions.
Bitcoin halving: the process of halving the payout for mining a new block of Bitcoin after each set of 210,000 blocks is mined.
Block: a record in the blockchain where information, like the most recent transactions, is stored and encrypted. Think of each block as the page of a book.
Blockchain technology: a decentralized public ledger that facilitates transactions and records the origin and lifespan of digital assets. Records are duplicated and distributed across the entire network on the given blockchain the transactions take place on.
Cryptocurrency: a digital peer-to-peer payment system where transactions are recorded in a public ledger. Often called crypto for short, cryptocurrency is any currency that exists digitally and is based on blockchain technology.
Crypto mining: the process of creating new crypto coins and verifying new transactions. Mining is essential to keeping cryptocurrencies secure since it verifies the blockchain, allows cryptocurrencies to function on decentralized networks, and adds each new coin to a distributed ledger.
Crypto wallet: a software program or physical medium to safely store the public and private keys you need to make cryptocurrency transactions.
Custody: a concept of holding and guarding assets. Crypto custody focuses on the holding of your private keys. Side note: public and private keys are kind of like two-part passwords used to unlock and access your crypto wallet assets.
DAO: short for Decentralized Autonomous Organization, a DAO is an entity that’s not controlled by the government, an institution, central bank, or any other form of leadership. DAOs use computer programs to enforce their rules, which are maintained on a blockchain along with their financial transactions.
dApps: short for decentralized applications, dApps are digital applications and programs that run on a blockchain network as opposed to being hosted on a centralized server.
Decentralization: a structure that allows something to operate outside of the control of any entity or person. In crypto, control is transferred to a distributed network.
DeFi: short for decentralized finance, DeFi is a blanket term that describes the rising peer-to-peer financial services being used on blockchains.
Distributed ledger: a digital system for recording the transactions of assets. Distributed ledgers usually use independent computers to record, share, and synchronize transactions.
Ethereum: a decentralized blockchain platform powered by its native cryptocurrency, ether. Smart contracts originated on the Ethereum platform, which also supports decentralized apps.
Gas: a transaction fee on the Ethereum blockchain. Developers have to pay this fee in the native crypto, ether, to the network to use the system.
Hard fork: a significant change to a blockchain network’s protocol that results in two branches: the new version and the old protocol.
Hosted/custodial wallet: involves entrusting another party to control your public and private keys. Every centralized crypto exchange automatically provides you with one of these.
Know Your Customer (KYC): a set of guidelines that companies use to identify and verify a customer’s identity prior to carrying out any financial services with them.
Market cap: the total value of a cryptocurrency that’s calculated by multiplying the price of the crypto with the number of coins in circulation.
Metaverse: a virtual space where users can interact in digital environments.
NFT: short for non-fungible token, an NFT is a unique unit of data that uses technology to log and authenticate digital content like videos, audio files, and images on a blockchain. NFTs are often sold and traded with Ethereum.
NFT staking: a method where holders lock up their NFT assets on a platform or protocol in exchange for earning rewards and passive income.
NFT sniping: a strategy of acquiring underpriced NFTs when rarity value is revealed. This often happens with PFP NFT projects and the tactic is often used by NFT investors close to the projects.
Node: a participant in a blockchain network which is typically a computer.
PFP NFTs: profile picture NFTs that mainly feature a character with distinctive, varying traits.
Private key: this is typically a string of letters and numbers that is never to be shared with anyone. Your private key is what you’ll use to sign and agree to transactions.
Proof of Work: a decentralized consensus mechanism that requires members of a network to expend effort solving an arbitrary mathematical puzzle to prevent anybody from gaming the system. This method requires a lot of electricity.
Proof of Stake: a consensus mechanism that requires blockchain networks to employ validators who stake their own crypto assets in exchange for the chance to validate new transactions on the blockchain. An initial winner is selected to validate a new block, and other validators can attest to its accuracy.
Public key: a numerical value that allows you to receive cryptocurrency transactions. Think of this as your crypto email address that you can safely share with folks to send and receive funds.
Public ledger: a record-keeping system that maintains crypto balances and transactions between a network’s participants.
Rug pull: in the crypto industry, a rug pull happens when developers abandon a project and liquidate their assets unexpectedly.
Self-custody wallet: individuals take sole responsibility for protecting their keys in whichever way they see fit. The advantage of these wallets is that you control your keys and funds entirely.
Smart contracts: an agreement between two parties where the terms are coded into the blockchain. Once those terms are met, the contract is automatically executed.
Soft fork: a significant change to a blockchain network’s protocol that results in the use of only the new version.
Stablecoin: a digital currency whose value is pegged to another asset or currency.
Staked ether: or stETH, a token that’s supposed to carry the same value as ETH that’s locked up in the Ethereum blockchain network.
Tokenomics: the study of the economics of crypto tokens. The term is derived from the words token and economics.
Web3: the new iteration of the World Wide Web based on blockchain technologies.
I will be updating this list regularly so if there are terms missing, don’t be afraid to shoot me an email at firstname.lastname@example.org