Cryptocurrency glossary

New to crypto payments? This glossary covers the most important terms you'll encounter when spending, receiving, or learning about cryptocurrency. Entries are written for a practical audience — not traders — and explain the concepts you actually need to know to pay with Bitcoin, stablecoins, or a crypto debit card.

Each entry includes a clear definition, the context that matters for everyday use, and links to related terms and to the listings and cards in our directory that put the concept into practice.

Fundamentals

• Bitcoin — The first decentralized cryptocurrency, launched in 2009, and the most widely accepted digital currency for payments.
• Ethereum — A decentralized, open-source blockchain with smart contract functionality; the second-largest cryptocurrency by market cap.
• Satoshi — The smallest unit of Bitcoin, equal to one hundred millionth of a Bitcoin (0.00000001 BTC).
• Smart contract — A program stored on a blockchain that runs automatically when predefined conditions are met, without intermediaries.

Payments

• AML — Anti-Money Laundering — regulations that require financial institutions to detect and prevent money laundering and terrorist financing.
• Crypto debit card — A payment card that converts cryptocurrency to fiat at the point of sale, allowing crypto to be spent anywhere cards are accepted.
• KYC — Know Your Customer — identity verification procedures required by financial institutions to comply with anti-money-laundering regulations.
• Merchant adoption — The growing number of businesses that accept cryptocurrency as a method of payment for goods and services.
• Payment processor — A service that lets merchants accept cryptocurrency payments, handling conversion, settlement, and reconciliation.

Wallets & Security

• Custodial wallet — A cryptocurrency wallet where a third party holds the private keys on the user's behalf.
• Private key — A secret cryptographic string that proves ownership of cryptocurrency and authorizes transactions.
• Seed phrase — A sequence of 12 or 24 words that backs up and restores access to a cryptocurrency wallet.
• Wallet — Software or hardware that stores the cryptographic keys needed to send, receive, and manage cryptocurrency.

Networks & Scaling

• Blockchain — A distributed, append-only ledger that records transactions across a network of computers in linked blocks.
• Gas fee — The transaction fee paid to compensate network validators for processing a transaction on a blockchain.
• Layer 2 — A secondary framework or network built on top of an existing blockchain to improve speed and reduce transaction costs.
• Lightning Network — A second-layer payment network built on Bitcoin that enables near-instant, low-cost transactions.

Finance

• Crypto exchange — A platform where users can buy, sell, and trade cryptocurrency for fiat currency or other cryptocurrencies.
• Off-ramp — A service that converts cryptocurrency into traditional fiat currency, typically by depositing to a bank account.
• On-ramp — A service that allows users to convert traditional fiat currency into cryptocurrency.
• Stablecoin — A cryptocurrency pegged to a stable reference asset, usually the US dollar, to minimize price volatility.
• Tether — USDT — a US-dollar-pegged stablecoin issued by Tether Limited; the largest stablecoin by circulating supply and trading volume.
• USDC — USD Coin — a fully reserved, US-dollar-pegged stablecoin issued by Circle, available on multiple blockchains.