Glossary

The world of cryptocurrency is filled with new and unfamiliar terms. This glossary is here to help you understand the language of Web3.

A

Address A string of letters and numbers that represents a destination for a cryptocurrency transaction, similar to an email address. Each asset on each blockchain has its own unique address in your wallet.

Airdrop A method of distributing cryptocurrency tokens to the public, usually for free, to a large number of wallet addresses. While often legitimate, airdrops can also be used in scams.

B

Blockchain A distributed, immutable digital ledger that records transactions in a secure and transparent manner. It's the core technology underlying all cryptocurrencies.

Burn The act of permanently removing a number of tokens from circulation by sending them to an unusable address. This is often done to reduce the total supply and potentially increase the value of the remaining tokens.

C

Cold Wallet A cryptocurrency wallet that is not connected to the internet, such as a hardware wallet or a paper wallet. They are considered highly secure for long-term storage. (See also: Hot Wallet)

Custodial vs. Non-Custodial A custodial wallet is one where a third party (like a centralized exchange) holds your private keys. A non-custodial (or self-custody) wallet, like Salt Wallet, is one where you and only you control your private keys.

D

dApp (Decentralized Application) An application that runs on a decentralized network, such as a blockchain. They operate without a central authority.

DeFi (Decentralized Finance) An umbrella term for financial services built on blockchain technology that operate without a central intermediary, such as a bank. Examples include decentralized exchanges, lending protocols, and yield farming.

DEX (Decentralized Exchange) An exchange that allows users to swap cryptocurrencies directly with each other (peer-to-peer) without the need for a central intermediary.

DYOR (Do Your Own Research) A common piece of advice in the crypto community, encouraging individuals to study and understand a project for themselves before investing.

G

Gas Fee A fee paid by a user to perform a transaction or execute a smart contract on a blockchain, such as Ethereum. The fee compensates miners or validators for the computational energy required.

H

Hot Wallet A cryptocurrency wallet that is connected to the internet, such as a mobile wallet (like Salt Wallet) or a browser extension. They are convenient for daily use but are more susceptible to online threats than cold wallets.

M

Mainnet The main, live, and operational blockchain of a cryptocurrency project. (See also: Testnet)

Minting The process of creating a new token on a blockchain. This is most commonly associated with creating NFTs.

N

NFT (Non-Fungible Token) A unique digital asset that represents ownership of a specific item, such as a piece of art, a collectible, or a piece of in-game content. Each NFT is one-of-a-kind.

P

Private Key A secret, cryptographic key that proves ownership of a wallet and its funds. Your private keys are derived from your recovery phrase. They should never be shared.

R

Recovery Phrase (or Seed Phrase) The master key to your entire wallet, usually presented as a list of 12 or 24 words. Anyone with access to this phrase can access your funds. It is the single most important thing to keep secure.

S

Smart Contract A self-executing contract with the terms of the agreement directly written into code. They run on a blockchain and automatically execute when certain conditions are met.

T

Testnet A secondary blockchain used by developers for testing and experimentation without using real assets or value.

Tokenomics The study of the economics of a cryptocurrency. It includes factors like a token's total supply, its distribution model, and its utility.

W

Web3 The next evolution of the internet, focused on decentralization and powered by blockchain technology.