Crypto Glossary

Bitcoin – a peer-to-peer electronic cash system invented by Satoshi Nakamoto in 2008. Bitcoin – with capitalization, is used when describing the concept of Bitcoin, or the entire network itself, e.g., “I was learning about the Bitcoin protocol today.” bitcoin – without capitalization, is used to describe bitcoins as a unit of account, e.g., “I sent ten bitcoins today.” It is also often abbreviated BTC.

Blockchain – a specific type of database, which differs from a typical database in the way it stores information; blockchains store data in blocks that are then chained together. Different types of information can be stored on a blockchain but the most common use so far has been as a ledger for transactions. Decentralized blockchains are immutable, which means that the data entered is irreversible.

Centralized Exchange (CEX) – a type of cryptocurrency exchange that is operated by a company that owns it in a centralized manner, and that facilitate trades between users by maintaining an order book. CEX users do not actually exchange crypto or fiat currencies with each other. Instead, when they deposit their funds onto an exchange, the latter takes over the custody of those assets and issues a corresponding amount of IOUs to the trader. The exchange tracks every user’s IOUs internally as they change hands in trades and only converts them into actual currency at the moment of withdrawal of funds.

Cryptoasset – any digital asset that uses cryptographic technologies to function as a store of value, medium of exchange, unit of account, or decentralized application. The four most common types of cryptoassets are cryptocurrencies, utility tokens, security tokens and stablecoins.

Cryptocurrency – digital currencies that use cryptographic technologies to secure their operation.

Decentralized – refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal.

Decentralized Apps (DApps) – a type of application that runs on a decentralized network, avoiding a single point of failure. The concept of a decentralized application was enabled by blockchain platforms that support smart contracts, the first of which was Ethereum.

Decentralized Autonomous Organizations (DAOs) – member-owned communities without centralized leadership. The organization is represented by rules encoded as a computer program that is transparent and controlled by the organization members. Decisions are governed by proposals and voting. A DAO’s financial transaction record and program rules are maintained on a blockchain

Decentralized Exchanges (DEX) – a peer-to-peer exchange allowing users to trade cryptocurrency without the need for an intermediary.

Decentralized Finance (DeFi) – an experimental form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilized smart contracts on blockchains, the most common being Ethereum.

Ethereum – is a decentralized, open-source and programmable blockchain, on which developers can build financial services, games, and apps.

Ether – the native cryptocurrency of the Ethereum platform. It is often abbreviated ETH.

Exchange – a business that allows customers to trade cryptocurrencies for fiat money or other cryptocurrencies. Cryptocurrency exchanges for consumers in Africa include Binance, BuyCoins, Luno, Paxful, Quidax, Yellow Card, and more.

Liquidity – how easily an asset, e.g., cryptocurrency, can be bought and sold without impacting the overall market price.

Medium of Exchange – an intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties. For a system to function as a medium of exchange, it must represent a standard of value. Further, all parties must accept that standard. In modern economies, the medium of exchange is currency.

Non-Fungible Tokens (NFTs) – cryptocurrencies that do not possess the property of fungibility. Traditionally, cryptocurrencies like Bitoin are fungible, meaning that every one unit of BTC is exactly the same as another unit of BTC and they can be exchanged for one another with no further considerations. Fungibility is one of the fundamental properties of traditional currencies too, like the USD. But in some use cases, tokens might be non-fungible, most commonly when they are used as digital proof-of-ownership of underlying assets. For example, NFTs can be used to represent digital art: at one point, an extremely popular Ethereum-based blockchain game CryptoKitties associated its tokens with unique images of cartoon cats and allowed users to trade those cats by exchanging the corresponding tokens. Another prominent example is the tokenization of real-world assets like equity or commodities to make them tradable digitally — in this case, tokens represent unique assets and are thus non-fungible.

Protocol – the set of rules that define interactions on a network, usually involving consensus, transaction validation, and network participation on a blockchain.

Security Tokens – a digital form of traditional securities. Security tokens are not the same thing as cryptocurrencies, which run on their own blockchains. Security tokens run on an existing blockchain, meaning that a security token could run on the Ethereum blockchain.

Smart Contract – a self-executing computer protocol intended to facilitate, verify or enforce a contract on the blockchain without third parties, and in which the terms of the buyer’s and seller’s agreement are directly embedded into lines of code. Smart contracts enable transactions and agreements to be anonymously executed among two or more parties that do not trust each other, without the need for a third-party authority, justice system or another external mechanism.

Stablecoin – a cryptocurrency with extremely low volatility, such as gold-backed cryptocurrency or fiat-pegged cryptocurrency.

Store of Value – an asset, commodity, or currency that maintains its value without depreciating. Gold and other metals are stores of value.

Token – a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. It does not have a store of value on its own, but is made so that software can be developed around it.

Tokenize – the process by which real-world assets are turned into something of digital value called a token, often subsequently able to offer ownership of parts of this asset to different owners.

Unit of Accounts – a standard monetary unit of measurement of value/cost of goods, services or assets.

Utility Tokens – tokens that are designed specifically to be able to help people use something. The use of utility tokens is limited to the particular ecosystem that the utility token is designed for. For example, one day, Uber could have its own utility token which people use to pay for rides on the Uber network. Utility tokens are not designed as investment vehicles.

Wallet – a cryptocurrency wallet is a secure digital wallet used to store, send and receive digital currency, and are divided into two categories: hosted wallets and cold wallets. The former is managed by a third-party service, whereas the latter is a wallet that is in cold storage, i.e., not connected to the internet.

Sources: CoinMarketCap,, Investopedia,, Wikipedia