Glossary
Plain-language crypto terms. Definitions are educational and simplified.
- Bridge
- A protocol that moves tokens, or representations of them, between blockchains.
- Capital Gains
- Profit from selling an asset for more than its cost basis; in the US taxed at short- or long-term rates.
- Cold Wallet
- A wallet whose keys are stored offline, often on a hardware device.
- Cost Basis
- What you originally paid for an asset, including fees, used to calculate gains or losses.
- Dollar-Cost Averaging (DCA)
- Buying or selling a fixed amount at regular intervals instead of all at once.
- FOMO
- Fear of missing out: the urge to act because others seem to be profiting.
- Gas Fee
- The fee paid to a blockchain network to process a transaction.
- Hardware Wallet
- A dedicated device that keeps private keys offline and signs transactions on the device itself.
- HODL
- Holding an asset long-term regardless of price swings.
- Hot Wallet
- A software wallet connected to the internet.
- Limit Order
- An order to buy or sell only at a specified price or better.
- Market Order
- An order to buy or sell immediately at the best available price.
- Moonbag
- A small leftover position kept after taking most profits.
- Phishing
- A scam that impersonates a trusted service to steal logins, seed phrases or signatures.
- Position Sizing
- Deciding how much of your portfolio to put into a single holding.
- Private Key
- A secret number that proves ownership of and authorizes spending from a blockchain address.
- Rebalancing
- Adjusting holdings back to target percentages after prices move.
- Seed Phrase
- A list of words (usually 12 or 24) that can restore a wallet's private keys.
- Self-Custody
- Holding your own private keys rather than leaving assets with an exchange or other custodian.
- Slippage
- The difference between the price you expect for a trade and the price you actually get.
- Stablecoin
- A token designed to track the value of another asset, often the US dollar.
- Taxable Event
- A transaction that can create a reportable gain or loss, such as selling or swapping crypto.
- Token Approval
- Permission you grant a smart contract to move a specific token from your wallet.
- Two-Factor Authentication (2FA)
- A second login check, such as an authenticator app code or security key, on top of a password.