20 Basic Crypto Terms Every Finance Should Know:
- Wallet Address (Bank Account Number)
Used to send and receive transactions on a blockchain network. An address is an alphanumeric character string, which can also be represented as a scannable QR code. An address can hold different token and exist on different chain.
- Airdrop
A token distribution method used to send tokens to wallet addresses. Sometimes airdrops are used for marketing purposes in exchange for simple tasks like reshares, referrals, or app downloads.
- Altcoin
As Bitcoin was the first cryptocurrency, the term ‘altcoin’ was created to refer to ‘any cryptocurrency other than Bitcoin’.
- Bitcoin (BTC)
Token with the largest market cap. The first cryptocurrency based on a Proof of Work (PoW) blockchain. Bitcoin was created in 2009 by Satoshi Nakomoto “Bitcoin: A Peer-to-Peer Electronic Cash System.”
- Blockchain
Technology for crypto. Records are immutable. Data is recorded in blocks. Each block is ‘chained’ to the next block using a cryptographic signature.
- Bridge
A bridge connects two chains and allows NFT and tokens to be transferred between them.
- Cold Wallet / Cold Storage
An offline wallet that is never connected to the internet. These wallets protect cryptocurrencies from getting hacked online. These are usually physical devices
- Cryptoassets
A useful blanket term that covers on-chain assets: cryptocurrencies, NFTs, and other, still emerging, products.
- Decentralized Exchange (DEX)
A decentralized exchange is a public platform for exchanging cryptocurrencies based on codes programmed on the blockchain (i.e., in smart contracts).
- Gas (Bank Charges)
The cost associated with computational effort required to perform a transaction on a blockchain.
- Hot Wallet / Hot Storage
A wallet that is directly connected to the internet at all times; for example, one that is held on a centralized exchange. Hot wallets are considered to have lower security than cold storage systems or hardware wallets.
- Mining
Increase the amount of tokens by spending computing power.
- NFT
A non-fungible token is a type of token that is a unique digital asset and has no equal token. Eg. digital art like Bored Ape. This is in contrast to cryptocurrencies like ether that are fungible in nature.
- Private key (Password)
A private key is a secret code that is used in cryptography, similar to a password. In cryptocurrency, private keys are also used to sign transactions and prove ownership of a blockchain address.
- Smart Contracts
On-chain programs with pre-defined rules to govern how users and tokens interact with program when certain conditions are met.
- Stablecoin
A cryptocurrency whose value has been ‘pegged’ to that of another asset, like fiat currency or gold. USDT and USDC are examples of stablecoins that are pegged to USD
- Staking(Interest Income)
The process of locking digital assets on-chain, usually in exchange for earning some type of incentive (e.g. interest, token yield, etc.). Staking often comes with some type of risk–in proof-of-stake, validators’ stake is at risk if the validator confirms illegitimate transactions.
- Blockchain Explorers
A blockchain explorer is a website or tool that lets users view all the transactions, addresses, smart contracts, and blocks recorded on a blockchain — similar to how a banking dashboard shows your transaction history, but for a public, decentralized ledger. Eg. oklink, ethscan
- Crypto Subledger (Accounting Software)
Accounting System for crypto entities. Eg. KoinX
- Whitepaper
Prospectus for a new financial product or an offering memorandum in private equity — but more open-source and community-oriented.
Basic Finance Forms, please refer to the attachment.
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