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Crypto Terminology

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Need more detailed explanations? Check out Coinbase Learn for comprehensive crypto education.

Gas​

Think of gas like fuel for transactions on the network. Every transaction (buying, selling, or swapping) needs gas to process:

  • Prices vary based on network demand
  • Higher gas prices mean faster transactions
  • Lower gas prices mean slower transactions
  • Gas can range from $5 to $100+ depending on network traffic

Seed Phrase​

A seed phrase is a list of 12-24 words that gives access to your crypto wallet. Think of it like the master key to your digital vault.

danger

Never share your seed phrase or store it digitally. Anyone with these words can take your funds!

Slippage​

Price changes that happen between placing an order and when it completes. For example: you place an order for $100 worth of tokens at $1 each. If the price moves to $1.10 before your order completes, you'll get fewer tokens than expected.

tip

Use lower slippage settings for better prices, but not so low that your transactions fail.

Centralized Exchange (CEX)​

Platforms like Coinbase where you can:

  • Buy crypto with regular money
  • Trade different cryptocurrencies
  • Set specific buy/sell prices (limit orders)
  • Requires identity verification

Decentralized Exchange (DEX)​

Trading platforms like Uniswap where:

  • You trade directly through smart contracts
  • No company controls your assets
  • No identity verification needed
  • You maintain control of your funds

KYC (Know Your Customer)​

Identity verification required by centralized exchanges. You'll need:

  • To be 18 or older
  • Government-issued ID
  • Proof of address This allows you to convert crypto back to regular money

Smart Contract​

An automatic digital agreement that executes when certain conditions are met. Once deployed, it can't be changed. Smart contracts power many features like:

  • Trading platforms
  • Staking pools
  • Voting systems

Liquidity​

The amount of crypto available for trading. More liquidity typically means:

  • Easier to buy and sell
  • More stable prices
  • Better trade execution

Staking​

Locking up your crypto to earn rewards, similar to earning interest. Two main types:

  1. Single-asset staking: Lock up one type of token
  2. Liquidity staking: Lock up two different tokens

Each type has different risks and rewards.

Audit​

A security review of smart contracts by expert teams. Audits check for:

  • Security vulnerabilities
  • Proper functionality
  • Potential risks This helps ensure the safety of crypto projects.

Dusting​

A scam where attackers send tiny amounts of crypto to wallets, hoping to track and target valuable accounts.

warning

If you receive unexpected tokens, don't touch them. Either ignore them or use a new wallet for your main assets.

Governance​

The process of making decisions in crypto projects through voting. Token holders can:

  • Vote on proposals
  • Suggest changes
  • Shape the project's future

Whitepaper​

A detailed document explaining:

  • What a crypto project does
  • How it works
  • Its goals and plans
  • Technical details