London Daily

Focus on the big picture.
Friday, Aug 08, 2025

Cryptocurrency key terms: A guide to making sense of digital money

Cryptocurrency key terms: A guide to making sense of digital money

What's the difference between altcoins and stablecoins? What's hashing and mining? Sometimes the jargon around cryptocurrencies can make your head spin. Here's how to make sense of it all.

As with any new technology, cryptocurrency comes with its own jargon. For the uninitiated, this can be confusing, even intimidating, at first glance.

If you’re looking to buy, invest or trade in cryptos, a grasp of the most commonly used terms will go a long way to help you understand how blockchain and cryptocurrencies work.

Here are just some of the key terms you will come across:

Bitcoin


Bitcoin was invented in 2008 by a mysterious person or group named Satoshi Nakamoto. While it is now one of thousands of cryptocurrencies, it continues to hog the limelight as the first ever crypto.

Altcoin


"Alt" being short for alternative, altcoin is a term which applies to cryptocurrencies that aren’t Bitcoin and which followed in the wake of its launch.

Stablecoin


While Bitcoin and other altcoins are decentralised, stablecoins are pegged to something else of value, be it an existing currency like the US dollar, or a commodity, in order to make them less volatile.

Ethereum


Ethereum is an open-source, blockchain-based software platform that has its own cryptocurrency called ether. Much like Bitcoin, there are terms that are specific to dealing with Ethereum, including Solidarity, a coding language invented by the platform which is similar to JavaScript.

Non-fungible token (NFT)


While cryptos are fungible, meaning they can be exchanged on a one-to-one basis, NFTs are not interchangeable as they are of different values. NFTs are a form of cryptocurrency which hold assets like music and art rather than money.

Cryptography


The study of secure communications in which the sender and recipient are the only ones who are able to see a message. It’s the basis for blockchain technology used in cryptocurrency transactions.

Fiat currency


Fiat currencies are ones that are issued by governments or banks, but are not backed by a commodity, such as gold. Most modern paper currencies we use today are fiat currencies.

Commodity currency


Unlike fiat currencies, commodity currencies are linked to commodities such as gold, and fluctuate based on the world market value of those products or materials.

An employee inspects machines for the production of bitcoins at a mining centre.


Decentralised finance


Also known as DeFi, decentralised finance is the notion that crypto entrepreneurs can recreate a financial system outside the control of the government and traditional financial institutions like banks and brokerages using blockchain technology.

Blockchain


A block is one record of transaction data. Once a transaction is completed, it goes into the blockchain, which is a network of blocks that act as a public ledger that keeps a record of transactions, much as a bank would.

For every transaction, a new block is generated and added to the blockchain. Each block contains a mathematical puzzle with a unique answer which needs to be solved before it can be added to the blockchain. The more blocks that are added, the more secure the blockchain becomes.

Hashing


Hashing is the process of using a function or algorithm to encrypt and decrypt the data in each block. The hash code - or simply hash - can be used as a way of narrowing down the search for data when trying to validate each new block, known as mining.

Mining


The process of finding new coins and validating them for rewards, mining involves supercomputers to unlock blocks by solving - or "hashing" - the complicated mathematical puzzles within each one.

Mining rig


A rig is a computer specifically designed and used to mine for blocks.

Public key


This is the publicly available code that you share with people to receive cryptocurrency into your account.

Private key


This is the confidential code which you use to access your wallet where your cryptos are stored. Only you should have access to this. If someone else finds this key, your stored cryptos are vulnerable to theft.

Whale


As the name suggests, whales are players in the cryptocurrency pond who own large amounts of cryptos. By moving large amounts of cryptos in a sale or purchase, whales have the ability to significantly impact the market, so traders try to keep track of their activities.

Wallet


As with other terms, this is borrowed from our everyday financial vocabulary. Just as with fiat currencies, cryptos are stored in a virtual wallet to keep them safe.

Cold storage


Often regarded as more secure than a wallet, cold storage entails storing bitcoins offline in a device known as a hardware wallet. Owners tend to use both - a wallet for regular spending and cold storage for savings.

Paper wallet


A form of cold storage, a paper wallet is the printed version of your public and private keys on paper in the form of QR codes.

Satoshi or "sat"


As with physical currencies, Bitcoin comes in denominations. A Satoshi - named after Bitcoin’s creator - is the smallest denomination of this particular crypto, equating to 100 billionth of one Bitcoin.

Newsletter

Related Articles

0:00
0:00
Close
US Justice Department Seeks Release of Epstein and Maxwell Grand Jury Exhibits Amid Legal and Victim Challenges
Scotland’s First Minister Meets Trump Amid Visit Highlighting Whisky Tariffs, Gaza Crisis and Heritage Links
Trump Administration Increases Reward for Arrest of Venezuelan President Maduro to Fifty Million Dollars
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
OpenAI Launches GPT‑5, Its Most Advanced AI Model Yet
Embarrassment in Britain: Homelessness Minister Evicted Tenants and Forced to Resign
President Trump nominated Stephen Miran, his top economic adviser and a critic of the Federal Reserve, to temporarily fill an open Fed seat
The AI-Powered Education Revolution: Market Potential and Transformative Impact
Chikungunya Virus Outbreak in Southern China: Over 7,000 Hospitalized
French wine makers have seen catastrophic damage to vines that were almost ready to be harvested after the worst fires in more than 70 years burned through the south of the country
US Lawmaker Probes Intel CEO’s China Ties Amid National Security Concerns
Brazilian President Lula says he’ll contact the leaders of BRICS states to propose a unified response to U.S. tariffs
Trump Open to Meeting Putin as Soon as Next Week, with Possible Trilateral Summit Including Zelenskiy
Katy Perry and Justin Trudeau spark dating rumors, joining high stakes world of celeb-politician romances
US envoy Steve Witkoff arrived in Moscow to seek a breakthrough in the Ukraine war ahead of President Trump’s peace deadline
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Karol Nawrocki Inaugurated as Poland’s President, Setting Stage for Clash with Tusk Government
Trump Signals JD Vance as ‘Most Likely’ MAGA Successor for 2028
US Charges Two Chinese Nationals for Illegal Nvidia AI Chip Exports
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
U.S. Tariff Policy Triggers Market Volatility Amid Growing Global Trade Tensions
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
Representative Greene Urges H-1B Visa Cuts Amid U.S.-India Trade Tensions
U.S. House Committee Subpoenas Clintons and Senior Officials in Epstein Investigation
Sydney Sweeney Registered as Republican as Controversial American Eagle Ad Sparks Debate
Trump Accuses Major Banks of Politically Motivated Account Denials and Prepares Executive Order
TikTok Removes Huda Kattan Video Over Anti-Israel Conspiracy Claims
Trump Threatens Tariffs on India Over Russian Oil Imports
German Finance Minister Criticizes Trump’s Attacks on Institutions
U.S. Proposes Visa Bond of Up to $15,000 for Some Applicants
U.S. Farmers Increase Lobbying Amid Immigration Crackdown
Elon Musk Receives $23.7 Billion Tesla Stock Award
Texas House Paralyzed After Democrats Walk Out Over Redistricting
Mexican Cartels Complicate Sheinbaum’s U.S. Security Talks
Mark Zuckerberg Declares War on the iPhone
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
Tesla Seeks Shareholder Approval for $29 Billion Compensation Package for Elon Musk
Nvidia is cutting prices on its RTX 50-series graphics cards after sales slowed and inventories piled up
Ghislaine Maxwell Transferred to Minimum-Security Prison Amid Ongoing DOJ Discussions
U.S. Tariffs Surge to Highest Levels in Nearly a Century Under Second Trump Term
Matt Taibbi Slams Media for Role in Russiagate Narrative
Pilots Call for Mental Health Support Without Stigma
All Five Trapped Miners Found Dead After El Teniente Mine Collapse
Ong Beng Seng Pleads Guilty in Corruption Case Linked to Former Singapore Transport Minister
×