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Explore approved Crypto definitions, everyday examples and related lessons.
Showing 12 of 15 matching terms
Optional extra text, chosen by you, that is combined with the seed phrase to create a separate wallet. Without the exact passphrase, the seed phrase alone opens a different wallet.
Example: The same BIP 39 recovery words with different passphrases derive different wallets. A device PIN is a separate feature; a forgotten passphrase cannot be replaced by remembering the PIN.
A system where participants deal with each other directly, instead of routing everything through one central organisation.
Example: Two neighbours exchange information directly while still following agreed rules. A peer network can avoid one central organiser without removing every trust or security assumption.
An off-chain signed message that, when someone submits it, creates a token approval without you sending the approval transaction yourself.
Example: A signed permission slip authorises a specified party to act later. A token permit can grant spending allowance even before you send an on chain transaction yourself; inspect the spender and amount.
Keep in mind: A signature can have spending consequences even without an immediate transaction from your wallet. Read the spender, allowance and expiry.
A rule you write in advance that pauses your decisions when a named trigger appears, such as a price spike, a "last chance" message or a loss.
Example: You decide in advance to pause whenever a last chance message appears. The pause creates time to check facts and budget instead of responding to pressure.
An attempt to trick you into revealing a secret, visiting a fake site, installing harmful software or approving a transaction, by pretending to be someone you trust.
Example: An email imitates your delivery company and asks for a password on a copied site. A fake crypto support message may instead ask for recovery words or a harmful signature.
A fraud that uses money from new investors to pay purported returns to earlier investors, rather than the genuine earnings it claims. It becomes unsustainable when new money cannot meet payments or investors seek withdrawals.
Example: A club pays earlier members using money from new arrivals while pretending it earned investment profit. An attractive payout does not establish that a genuine income source exists.
Making a decision in advance, usually in writing, so that your future self in a heated moment has a clear rule to follow instead of deciding from scratch.
Example: Before shopping, you write a spending limit and a waiting rule for expensive items. A learning plan can use the same idea to reduce decisions made under excitement or fear.
The change in available price associated with the size of your own trade relative to available liquidity. A larger trade in a shallow pool can have a larger effect.
Example: Buying all the cheap items at a stall leaves only higher priced stock for the rest of the order.
Keep in mind: Separate the effect of your own size from market movement between quote and execution.
Secret cryptographic data used to create signatures for the associated account or spending condition. Someone who obtains the necessary signing keys may gain control of the assets.
Example: An office signing credential can approve requests without being sent to the recipient. A crypto key similarly signs without needing to be revealed.
Keep in mind: A private key is not a receiving address, account password or public key.
A check or report concerning selected assets controlled by a provider at a stated time. Its scope varies and may omit liabilities or other obligations; it does not by itself establish solvency.
Example: A photo shows cash in a shop's till, but not its unpaid supplier bills. A reserves snapshot also cannot by itself reveal all liabilities or prove continuing solvency.
Keep in mind: A snapshot is different from a financial statement audit and is not a guarantee of future withdrawal access.
A consensus approach in which validators commit stake and follow rules for proposing and voting on blocks. Rewards and penalties encourage correct participation; details differ between networks.
Example: A participant commits security before taking a checking role. This illustrates incentives, not a promise that every network has the same design.
Keep in mind: Holding a token is not automatically the same as operating a validator.
A mechanism requiring demonstrable computational work. In Bitcoin, miners search for a qualifying block header hash and nodes verify the block against the protocol rules.
Example: A qualifying number is costly to find through repeated attempts but simple to check against the threshold.
Keep in mind: A qualifying hash alone cannot make invalid transactions valid.
Acting under a persistent identifier, such as a wallet address, that is not your name but can be linked to you if other information connects them.
Example: An online username is not a legal name, but a public profile may connect the two. An address can similarly become linked to a person through other information.
Cryptographic data associated with a private key and used to verify its signatures. An address may be derived from keys or other spending information, depending on the network.
Example: A public verification tool can check a signed message without revealing the secret that signed it.
Keep in mind: A public key and a receiving address are not interchangeable in every system.
A scheme in which insiders buy a token cheaply, hype it to attract buyers, and sell their holdings into the rising price, leaving later buyers with losses.
Example: A promoter praises a collectible while secretly selling a large stock into the new demand. Later buyers may be left with an item few people want at the promoted price.