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25 crypto terms you need to know to understand the jargon

22.09.2025

Cryptocurrencies have long been much more than buzzwords, and most people have some idea what they are. Anyone trying to gain a more in-depth understanding will inevitably come across technical jargon. We sum up the 25 key terms you’ll need to navigate the crypto scene.

At a glance

  • More and more people are interested in cryptocurrencies and want to understand how they work.
  • The technology behind cryptocurrencies represents technological change that goes far beyond finance: decentralized, transparent and global.
  • This glossary explains 25 key terms relating to the world of crypto and blockchain and makes it easier to get started.

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Cryptocurrencies have been attracting a great deal of attention for a number of years now, because they are fundamentally changing the way we store, transfer and trade assets digitally. For the first time, the underlying blockchain technology makes it possible to transfer digital assets directly from person to person – without the involvement of intermediaries. Well over 500 million people worldwide are now investing in cryptocurrencies. According to a study carried out by the Lucerne University of Applied Sciences and Arts on behalf of PostFinance in 2024, the figure is around 11 percent of the population in Switzerland. There are already thousands of different cryptocurrencies – and the number continues to grow. This development shows how much the topic is gaining in importance and also arouses the interest of investors who have had little contact with it so far. If you’re one of them, the following 25 terms will help you to find your way around the crypto world, which is often a technical one.

Crypto terms

  • An airdrop distributes new cryptocurrencies to specific users free of charge, as a way for projects to raise their profile or reward their community. For example, those who register or get on board early can receive such coins, often automatically via the wallet. Fun fact: the name airdrop comes from aviation: just as goods were parachuted in the past, the coins end up directly in the digital wallet.

  • This term comes from the name “alternative cryptocurrency”. As Bitcoin is the oldest cryptocurrency, “altcoin” refers generally to all cryptos other than Bitcoin.

  • Altcoin season means that alternative cryptocurrencies are performing better than Bitcoin. Altcoin indices, such as the Altcoin Season Index, show whether this phase has begun. This measures how many altcoins have risen more sharply than Bitcoin over the past 90 days. If over 75 percent of altcoins perform better, experts call this an altcoin season.

  • Bitcoin is the best-known cryptocurrency and was the first digital currency to operate without a central bank or supervisory authority. It was introduced in 2009 and is now regarded as a pioneer in the field of digital assets. Originally ridiculed as a niche project, Bitcoin has now developed into a recognized asset class. An important milestone was the launch of the first Bitcoin ETFs in the USA at the beginning of 2024. These are among the most successful ETF launches of all time and make investing in Bitcoin much easier – even for institutional investors. More and more companies are also using Bitcoin as a strategic reserve on their balance sheet.

  • Blockchain is a database solution that holds information in a form that makes it difficult to change, hack or deceive the system. Blockchain is a sub-type of distributed ledger technology in which interactions are logged with an unalterable cryptographic signature, known as a hash. Blockchain stores transactions in the order they were executed in and creates an unalterable transaction history. That prevents data from being edited or manipulated at a later point.

  • These two terms are often used synonymously, even though they aren’t the same thing. What they do have in common is that they both represent a particular value, enable payments and can be exchanged. The main difference is that coins are independent cryptocurrencies that don’t require any other platform. Instead they have their own blockchain. Bitcoin, for example, works on the Bitcoin blockchain. In contrast, tokens are based on an existing blockchain and use this technology to provide certain applications. For example, there are tokens that are based on the Ethereum blockchain and provide DeFi services.

  • DeFi is an abbreviation of decentralized finance and has started playing a much more significant role in recent years. It refers to financial applications that use Web 3.0 and are based on blockchain technology and smart contract programs. As the name implies, the focus is on decentralization, and users manage their transactions themselves. This means that functions previously performed by financial service providers are now partly or fully replaced by smart contracts. Smart contract protocols are used to execute transactions.

    More information about Web 3.0 can be found in our article “From Web 1.0 to Web 3.0: the fascinating evolution of the Internet.”

  • The ledger is a register where executed transactions are logged. Distributed ledger technology (DLT) is a database located in several places simultaneously. The opposite to a DLT is a centralized database. Distributed ledger technology manages transactions through decentralization across various people and locations. This means that no central authority or central server are needed to validate transactions or check for any manipulation. That’s revolutionary as, for the first time, no intermediary is needed, such as a bank when making payments. 

  • Ethereum is a blockchain platform that enables developers to create and implement decentralized applications using smart contracts. Since its creation, the Ethereum blockchain has attracted a growing community of developers and offers a wide range of possible applications. Measured by market capitalization, it’s the biggest smart contract blockchain. Ethereum has its own cryptocurrency called Ether (ETH), which is required to execute smart contracts and transactions on the platform. Ether can also be used as a digital payment method and is traded on the major crypto exchanges.

  • The Fear & Greed Index shows whether fear or greed is currently shaping the crypto market. It operates on a scale of 0 to 100 – the higher the value, the greater the greed. A low value indicates uncertainty or fear. The data comes from sources such as social media, search queries or market volumes. The index can help to better assess current market sentiment. However, it does not replace a personal analysis, but rather serves as additional guidance.

  • Fiat money is a payment method issued by central banks and other banks. Fiat currencies such as Swiss francs, euros and US dollars are not tied to the price of commodities (such as gold), but are based on trust in the value of money. They differ from commodity money, which has an intrinsic value, such as precious metals (gold and silver), salt or mussels. These goods don’t just have an exchange value, but also value in the form of the items themselves. Although cryptocurrencies, just like fiat currencies, can be used as a payment method and a form of investment, there’s a clear difference: cryptocurrencies aren’t issued by a central authority, but are instead based on a consensus algorithm and cryptography to ensure secure transactions.

    Go to the article “What is fiat money?”. 

  • A hash is a fixed sequence consisting of letters and numbers. It is generated by using a mathematical algorithm on data sets (e.g. data, messages or files). A key aspect of hashes is their uniqueness. Even a minor modification to the data set results in a change to the hash value. Hashes can be used to verify that data sets have remained unchanged during transmission or storage. In the world of cryptos, they play a key role in storing transactions and creating the blocks in a blockchain.

  • Hodl was originally created by a typo from a drunken user on a Bitcoin platform. It was meant to be “hold”. Hodl is now a household name in the crypto world. It advocates not selling cryptocurrencies, even when prices fluctuate sharply, but instead keeping them long-term – in the hope that their value will increase over time. This approach is similar to the traditional buy and hold strategy from the financial world.

  • ICO is the crypto equivalent of an initial public offering (IPO), where the shares of a private company go on sale for the first time. In an ICO, however, new coins rather than shares go on sale. An initial coin offering is a way of raising capital for companies, foundations or projects wishing to provide products or services related to cryptocurrencies. Investors are interested in ICOs because they obtain a new cryptocoin through their participation – with the hope that its value will rise in future. Initial coin offerings should generally be treated with caution – they are largely unregulated, and many have turned out to be fraudulent. As ICO participation entails high risks, advance research, a basic understanding of cryptocurrencies and sufficient risk capacity are all key requirements that should be fulfilled before deciding to invest.

  • Meme coins are when cryptocurrencies are developed in connection with memes circulating online. One example is Dogecoin, whose logo features a Shiba Inu, a popular Japanese dog breed. Influencers and communities can give a boost to these cryptocurrencies, which may seem worthless at first glance. This support gives them the potential to gain in value. Due to their lack of functions, meme coins are sometimes also seen as “shitcoins”, but they don’t necessarily have to be if the meme character is of good quality and has subjective value.

    Shitcoins are altcoins that are regarded as worthless due to a deficiency. These deficiencies may concern a feature or the blockchain behind the development.

  • In the case of cryptocurrencies with the proof of work procedure, new transactions are confirmed by a consensus mechanism that requires a lot of computing power. This process is also known as mining. Participants who make their hardware available for this purpose are called “miners”. New coins are mined when the computers available complete computational tasks. As there’s no formula for working out the correct solution, it has to be guessed. It generally takes several rounds of guessing and verification before the correct number is found. New coins in the relevant cryptocurrency are issued as a reward for successfully completed tasks. However, the entire process requires vast computing capacity due to the high level of complexity.

  • NFTs enable the clear identification and trading of both digital and physical assets, such as works of art, music or plots of land. “Non-fungible” means not replaceable, so NFTs are unique assets – in contrast to tokens or coins, for example, which can exist multiple times in the same format. NFTs use blockchain technology to verify the rights of ownership and authenticity of the token and, in turn, the corresponding assets.

  • Private keys and public keys act as a two-key system: the public key is used to receive transactions in encrypted format, while the private key is needed to decrypt them. The public key is in the public domain and is a bit like an IBAN. Using the same analogy, the private key is like the PIN, which is why it mustn’t be disclosed under any circumstances. Together, the private and public keys provide access to the holdings in the blockchain – in other words, the cryptocurrencies, tokens and other digital assets purchased. Public and private keys are stored in a wallet.

    Go to the article "Crypto custody: everything you need to know".

  • Proof of stake is a consensus mechanism used by lots of blockchains to validate transactions on the blockchain. In a process called staking, validators use the blockchain’s own coins as a security deposit to generate new coins. In return, they get a reward. The validators then bet on the blocks they think will be the next ones to be added to the blockchain. Whoever bets correctly receives a reward, called the block reward, which varies depending on the bet. Using this mechanism, the proof of stake requires less computing power than the proof of work.

    Go to the article “Proof of work and proof of stake: a comparison”. 

  • Like the proof of stake, the proof of work is a consensus mechanism. But the proof of work functions in a different way. It is the consensus algorithm behind the mining – in other words, a method for validating the blockchain by providing computing capacity. It proves that the miners have undertaken the computing work and guessed the 64-character hash required to add a new block to the blockchain. By sharing the solution, other nodes can check if the hash is correct and whether the work required to obtain it has been done.

    Go to the article “Proof of work and proof of stake: a comparison”. 

  • Smart contracts are self-executing programmes that are stored on a blockchain. You automatically execute one or more transactions as soon as predefined conditions are met. This is based on simple if-then instructions: if a certain precondition is met, then a predefined action is triggered. Once executed, these transactions are traceable and can no longer be reversed. The conditions remain transparent and understandable for all parties involved. This enables trustworthy transactions and agreements between different parties without the need for a central authority.

    Go to the article “Smart contracts: more than digital contracts”

  • A stablecoin is a cryptocurrency whose value is linked to a stable reference. This can be a national currency such as the US dollar, a basket of currencies or another asset. A well-known example is the USDC, which is worth about the same as a US dollar. Stablecoins fluctuate only as much as the underlying value and are therefore considered much more stable than traditional cryptocurrencies. This stability makes them particularly useful for payments or as an interim solution for storing digital assets.

    Go to the article “What is a stablecoin?”. 

  • Staking is when users receive a reward for making their cryptocurrencies available for a certain period of time. In doing so, they help to secure a network and confirm transactions. This works for blockchains based on the proof-of-stake procedure. During the staked time, the coins are blocked and cannot be traded. The reward amount depends on the project and the quantity deployed. Staking can yield regular returns, but is not without risk.

    Go to the article "Crypto staking – an easy-to-follow explanation"

  • Total value locked (TVL) shows how many cryptocurrencies are currently tied up in DeFi protocols. This includes, for example, coins that users have staked or provided as liquidity. A high TVL can be a sign that many trust a protocol and actively use it. It gives a rough indication of the size or popularity of a DeFi service. Nevertheless, it does not say anything about the security or quality of a project.

  • A wallet is required to manage cryptocurrencies and other tokens. The wallet is a storage space for addresses and public and/or private keys. This means that the cryptocurrencies are not in the wallet, but the wallet contains the details for accessing the cryptocurrencies, which are in turn found on the blockchain. Various access details can be stored in a wallet. However, crypto holders tend to opt for several wallets for security reasons. There are various types of wallet, the two most common are:

    Cold Wallets

    A cold wallet is a physical storage medium that is not connected to the Internet. Examples include USB sticks, flash drives, hard drives, paper wallets and solid state drives. While offline storage provides better protection against hacker attacks, it isn’t without risks. If the cold wallet gets lost, there’s no back-up, and the stored keys saved in the wallet are also gone forever.

    Hot Wallets

    With hot wallets, the access details are stored online, which means that the wallet is permanently connected to the Internet. There are different types of hot wallet, all of which are easy and convenient to use. Digital storage and password-protected access make hot wallets a popular target for cybercriminals. Users must be aware of the risks involved and always be cautious when using their keys.

    Go to the article “Crypto custody: everything you need to know”

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