DeFi — short for decentralized finance — is a financial system based on peer-to-peer payments through blockchain technology. Via blockchain, DeFi lets users sidestep traditional financial middlemen like banks or brokers. DeFi can cover a wide range of financial activities, including payments, investments and lending.

Government-issued currency not backed by physical commodities, such as gold. The value of fiat currency is supported by the issuing government and its economic strength.

The cost required to perform a transaction or execute a smart contract on the Ethereum network.

A halving is a process that cuts the mining rewards in half roughly every four years to reduce the issuance rate of Bitcoin. (New Bitcoins are issued when high-powered computers called Bitcoin miners process complex math problems.)

Initial coin offering. Similar to an initial public offering (IPO) for stocks, an ICO is a fundraising method used by cryptocurrency projects.

A record of all cryptocurrency transactions on the blockchain.

A type of cryptocurrency inspired by internet memes, pop culture or social media trends. Unlike mainstream cryptocurrencies like Bitcoin or Ethereum, memecoins often lack a clear utility or technological innovation. Instead, their value is largely driven by online hype and humor. Examples include Dogecoin and Shiba Inu.

The process of verifying and adding transactions to a blockchain. Successfully Bitcoin mining rewards miners with a predetermined amount of Bitcoin.

Non-fungible token. Built on blockchain technology, NFTs provide a secure and transparent way to record ownership of digital assets. NFT transactions are permanently recorded, making it nearly impossible to counterfeit or dispute ownership. A NFT can represent various digital products, such as artwork, collectibles, video clips, in-game items or music albums.

In a proof-of-stake system, cryptocurrency holders can stake their coins to validate transactions and earn rewards. To become a validator, a minimum amount of coins is required. Validators ensure the security and integrity of the blockchain. Those who don’t meet the minimum staking requirement can delegate their coins to validators and earn rewards that way. While many popular cryptocurrencies, such as Ethereum, use proof-of-stake validation, not all do.

Proof of work uses a process known as mining to validate transactions and manage that coin’s blockchain. The first miner to solve a puzzle adds a new block of transactions to the blockchain and is rewarded with cryptocurrency. Bitcoin uses a proof-of-work system, a process that consumes significant energy and resources.

Self-executing contracts with the terms of the agreement directly written into code. Built on blockchain technology, smart contracts automatically fulfill their obligations once specific conditions are met. This transparency and automation eliminates the need for intermediaries, like banks, reducing the risk of errors or disputes.

A type of cryptocurrency designed to maintain a stable value, often pegged to a fiat currency like the U.S. dollar. To achieve this, stablecoins often rely on backing assets like U.S. dollars, or they use algorithmic mechanisms to adjust supply and demand. Unlike highly volatile cryptocurrencies, stablecoins are meant to offer a more predictable and reliable store of value.

The process of locking up funds in a cryptocurrency to support the network and earn rewards.

A digital asset representing ownership of a specific project or service.

A cryptocurrency wallet is a device used to store and manage crypto holdings. It safeguards private keys, which are essential for accessing and controlling your coins. These wallets can be either software-based or hardware-based. Hardware wallets (cold wallets) operate offline. They’re the most secure but carry the risk and responsibility of self-custody. Software wallets (hot wallets), are more accessible but are less secure and require strong security measures to protect against potential hacks.