Crypto Glossary

A collection of easy-to-understand definitions of crypto terms.

Cryptocurrency

A digital currency whose transactions are secured by cryptography.

Cryptography

A method of securing information using codes that no third-party can access.

Transaction

A transfer of cryptocurrency from one wallet to the other.

Wallet

A wallet is like your bank account. It is used to store, send and receive cryptocurrency.

Wallet Address

A wallet address is very similar to your account number. It is a unique string of numbers and letters that you use to receive cryptocurrency. It can be shared publicly in the form of text or QR code to those who want to send you cryptocurrency. It is a shortened version of the public key.

Public Key

A unique string of letters that you can share with anyone to send or receive cryptocurrency. It is usually used in non-custodial wallets in place of the wallet address.

Private Key

A secret combination of numbers and letters that enables you to authorize the transfer of coins out of your wallet securely. Think of it like a very complicated password.

Your private key must never be shared with anyone else because whoever has your private keys can access your coins. It is also important to ensure that it is stored in a safe place because if you lose it, you lose access to your coins and it cannot be recovered.

Seed

The seed (or seed phrase) of any wallet, is a secret 12-word phrase generated from the private key of your wallet. In some non-custodial wallets, it can be used in place of the private key.

Just like the private key, it is important to store your seed phrase securely in a place that no one else has access to.

Custodial Wallet

A wallet that is managed by a third-party service provider on your behalf. In most cases the wallet provider stores your private keys and allows you to manage your transactions using a login password that can be recovered.

The provider is responsible for the security of your coins and handles transactions on your behalf. This is similar to a bank holding funds on your behalf - they are responsible for holding your money securely and handle transactions that you initiate.

Non-custodial Wallet

A wallet in which you have total control and bear full responsibility for the security and management of your coins.

In a non-custodial wallet, you have access to your private keys or a seed to authorize transactions.

Blockchain

A large spreadsheet that records and stores all records of transactions for a particular cryptocurrency. It contains details of every transaction that has ever happened. You can search for specific transactions on the blockchain using your transaction hash.

Transaction hash

A unique combination of letters and numbers used to identify a particular transaction on the blockchain. It is also referred to as the Transaction ID.

Block

A collection of transactions on the blockchain that occur within a period.

Confirmation

A transaction is confirmed when it has been successfully verified and recorded on the blockchain.

Blockchain Explorer

A tool that allows you to search the blockchain to find the details of transactions. This is not the blockchain itself, it is simply a tool to access the information on the blockchain.

Bitcoin

A cryptocurrency created in 2009. It is the largest by volume and market value. It is called BTC for short. Bitcoin can also be used to refer to the Bitcoin Blockchain.

Satoshis

A satoshi is the smallest unit of Bitcoin. Think about it as what the kobo is to the Naira. 1 Satoshi = 0.0000001 Bitcoin

Mining

This is the process by which new bitcoin is created. When a miner successfully completes the complex process of verifing transactions and adding them to the blockchain, new bitcoin is created and the miner is rewarded with it.

Network Fees

These are fees charged for verifying and recording a transaction. They are typically paid for by the person who is sending cryptocurrency and received by miners. Higher network fees can sometimes guarantee that your transaction will be processed faster.

Mempool

This is where all the valid transactions wait to be confirmed by the Bitcoin network.

Block Reward

The newly created coins that miners are rewarded with for helping to verify transactions.The block reward is a fixed amount that is halved every four years.

Halving/Halvening

This refers to the event where the block reward that miners get is cut in half. It happens automatically after 210,000 new blocks are added to the blockchain which is approximately every four years. It helps to maintain the value of Bitcoin.

Stablecoin

A cryptocurrency that is backed by another stable asset like fiat or gold. It combines the stability of the asset with the functionality of cryptocurrencies.

NGNT

A stablecoin backed 1:1 to the Naira. It is managed by Token Mint Centre.

USDC

A stablecoin backed 1:1 to the USD. It is minted and managed by Circle.

Ether

The second largest cryptocurrency by market capitalization, behind Bitcoin. It is also called Ethereum or ETH for short.

Ethereum

The blockchain on which Ether runs. It can also refer to the Ether cryptocurrency.

Litecoin

A cryptocurrency - LTC for short.

Peer-to-peer trading

A form of trading in which you directly buy from or sell to other cryptocurrency holders. You decide on what price you want to buy at and try to reach a deal with another trader who is willing to sell at that price and vice versa. BuyCoins has a peer-to-peer platform that makes it easy for you to buy and sell from others.

Cryptocurrency Exchange

A platform for buying and selling cryptocurrencies.

Escrow

An arrangement in which a third party holds and disburses assets for the parties in a transaction based on agreed-upon terms.

Fiat

A form of money whose value is created and maintained by the government. E.g Nigerian Naira, US Dollars.

Limit Order

An order to buy or sell cryptocurrency at a specific price. BuyCoins has the limit order feature that enables you to automatically buy/sell when the price of Bitcoin reaches your preferred price.

Volatility

The rate at which the value of an asset rises and falls.

Asset

A resource that has monetary value.


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