In 2025 and beyond
A
Address: A crypto asset address is a unique identifier that serves as a virtual location where a crypto asset can be sent. It can be freely shared with others to facilitate transactions.
Alphanumeric: Alphanumeric data contains both numbers and letters. A Bitcoin address is an example of alphanumeric data.
Altcoin: The term “altcoin” typically refers to any cryptocurrencies other than Bitcoin.
Anonymity: This is the condition of being anonymous, so your identity and/or actions are not publicly known.
Anti-Money Laundering (AML): Criminals use money laundering to conceal their crimes and the money derived from them. Anti-money laundering (AML) seeks to deter criminals by making it harder for them to hide ill-gotten money. AML regulations require financial institutions to monitor customers’ transactions and report on suspicious financial activity. In jurisdictions regulating cryptocurrency service providers, the AML and compliance standards for traditional finance also apply to cryptocurrency.
B
VAP Group presents Global Blockchain Show in DubaiBank Secrecy Act (BSA): The Bank Secrecy Act of 1970 (BSA) – also known as the Currency and Foreign Transactions Reporting Act – is a US law requiring financial institutions in the United States to assist government agencies in detecting and preventing money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, file reports if the daily aggregate exceeds $10,000, and report suspicious activity that may signify money laundering, tax evasion or other criminal activities. In October 2019, FinCEN issued a joint statement with the US Securities and Exchange Commission (SEC) and US Commodity Futures Trading Commission (CFTC) to provide a united anti-money laundering and combating the financing of terrorism (AML/CFT) front and explain how they define and regulate crypto assets. The three leading US financial regulators remind persons engaged in activities involving crypto assets of their AML/CFT duties and that they should ensure they stay compliant with the Bank Secrecy Act (BSA).
Binance Chain: Binance Chain is a protocol launched by the crypto exchange Binance. Its native cryptocurrency is BNB, which was first released on the Ethereum blockchain and has since been swapped. This function-rich blockchain allows users to create their tokens, utilise an integrated decentralised exchange, and use the Binance Smart Chain, a parallel blockchain allowing smart contract functionality.
Bitcoin: Bitcoin (BTC) is a peer-to-peer (P2P) version of electronic cash that allows online payments to be sent directly from one party to another without going through a financial institution. All Bitcoin transactions are visible on a public ledger called a blockchain, which anyone can download a copy to verify and process transactions. The total supply is limited to just under 21 million and a whole bitcoin can be divided up to 8 decimal places, the smallest of which is called a ‘satoshi’ after the anonymous creator of the network, Satoshi Nakamoto.
Bitcoin ATM: A Bitcoin ATM (Automated Teller Machine) is a kiosk that allows a person to purchase Bitcoin using cash or a debit card. Some Bitcoin ATMs offer bidirectional functionality, enabling both the purchase of Bitcoin and the sale of Bitcoin for cash. Bitcoin ATMs do not connect to a bank account; instead, they connect the user directly to a Bitcoin wallet or cryptocurrency exchange.
Blockchain: A blockchain is the transaction database shared by all nodes participating in a specific crypto asset network. A full copy of a network’s blockchain contains every transaction ever executed in the asset. It was first introduced in the Bitcoin whitepaper published in October 2008 as the underlying protocol for peer-to-peer transactions.
Blockchain Analysis/Blockchain Analytics: Blockchain analysis combines transaction information from the blockchain with other data to gain insights into the flow of crypto assets between actors. This information can be used to identify financial crime and meet regulatory requirements.
Blocks: Each block in the blockchain is a collection of transactions linked to the previous block in the chain using a cryptographic hash to ensure it is valid and legitimately connected to the last block. After a block is added to the blockchain, the mining process begins to build and validate the next block.
BNB: BNB – or Binance Coin – started as a utility token available on the Binance exchange. Unlike mainstream cryptocurrencies, it is meant to be used within the eponymous ecosystem.
C
Cold Storage: When cryptocurrency is referred to as being held in cold storage, the associated private key for the address is held offline. The most common forms of this are a hardware wallet or being written down physically, such as on paper.
Crypto Custodian: A Crypto custodian stores digital assets on behalf of retail and institutional customers. Often, a crypto exchange also performs this role.
Crypto asset: A crypto asset is a digital asset secured with cryptography. Transactions are distributed and validated by a decentralised set of participants and recorded on a public ledger known as a blockchain.
Cryptocurrency: The term “cryptocurrency” can be used as an umbrella term for virtual forms of money. However, it is used when discussing assets supported by a blockchain like Bitcoin and Ethereum. Cryptocurrencies are not issued or controlled by any government or other central authority. They exist on peer-to-peer networks of computers running free, open-source software. Anyone who wants to participate by owning, sending or spending can do so. The abbreviation “crypto” is often used when speaking and writing.
Cryptocurrency Exchange: A cryptocurrency exchange is a business that allows customers to buy or sell digital assets using fiat or cryptocurrencies. Examples include Coinbase and Kraken.
Cryptography: Cryptography uses mathematics—specifically encryption—to secure computer networks and digital data, ensuring that only the intended recipient can access information or systems.
D
Dark Web: The dark web is a subset of the deep web, a part of the internet that is not indexed by search engines such as Google. It requires the use of anonymising browsers like Tor to access. Most dark web marketplaces conduct transactions in Bitcoin or other cryptocurrencies. The inherent anonymity of the dark web attracts scammers and criminals, but not everything there is nefarious or illegal. The Tor network began as an anonymous communications channel, and it still serves a valuable purpose in helping people communicate in environments that are hostile to free speech.
Decentralised Application (dApp): Decentralised Applications (dApps) are computer applications running on a decentralised computing system like Ethereum.
Decentralised Autonomous Organisation (DAO): A Decentralized Autonomous Organisation (DAO) is a computer program with no manager or leader running on a peer-to-peer network with a series of smart contracts encoded into the blockchain. Hence, there is no need for any human intervention, as the DAO runs entirely autonomously on the blockchain. A DAO intends that it is an organisation which can run with decentralised governance. DAOs have been formed to try to collectively buy a copy of the US constitution, to be creator-led communities, and work as investment firms.
Decentralised Exchange (DEX): A decentralised exchange (DEX) is a combination of smart contracts that enables users to swap crypto assets peer-to-peer without needing a trusted intermediary. This differs from a traditional centralised exchange, where there is an off-chain order book and users must deposit crypto assets into the exchange’s custody to transact.
Decryption: Decryption is decoding information and the opposite process from encryption. It converts the cipher text back into plain text to reveal the original message.
Decentralised Finance (DeFi): Decentralized finance (DeFi) is a peer-to-peer, decentralised, censorship-resistant financial system. Common DeFi applications include crypto wallets, lending, borrowing, spot trading, margin trading, interest-earning, market-making, derivatives, options and more.
Digital Signature: A digital signature is a mathematical scheme for verifying the authenticity of digital messages or documents. A valid digital signature – where the prerequisites are satisfied – gives a recipient powerful reason to believe that a known sender (authentication) created the message, and that the message was not altered in transit (integrity).
Distributed Ledger Technology (DLT): Distributed Ledger Technology – also known as shared ledger or DLT – refers to peer-to-peer networks that reach consensus to ensure that replication across nodes is undertaken. Unlike distributed databases or centralised services, there is no central administrator, and participants and nodes can be found across multiple sites, countries, or institutions. The most well-known example of Distributed Ledger Technology is a blockchain.
E
Encryption: Encryption is the process of encoding information. This process converts the original representation of the information – plaintext – into an alternative form known as ciphertext. The opposite process is decryption.
Ethereum: The Ethereum blockchain is a network that aims to be a decentralised world computer. As such, it offers a more function-rich protocol than the Bitcoin blockchain and allows users to transfer the native asset Ether (ETH), create smart contracts and tokens, or create more complex decentralised applications (dApps). Ethereum was launched in 2015, and its co-creator Vitalik Buterin is a well-known individual in the blockchain world—often speaking at conferences and being active in the space.
F
FATF Travel Rule: The FATF Travel rule states that virtual asset providers (VASPs) must identify the senders (originators) and receivers (beneficiaries) of cryptocurrency transactions initiated by their users once it goes above a certain amount, which varies by country or jurisdiction. Authorities can take freezing action and prohibit conducting transactions which are the subject of UN Security Council resolutions relating to preventing and suppressing terrorism and terrorist financing.
Fiat Currency: A fiat currency is a national currency—often established as legal tender by government regulation—that is not pegged to the price of a commodity such as gold or silver.
FinCEN: The Financial Crimes Network (FinCEN) is a United States Department of the Treasury bureau. It is tasked with safeguarding the financial system from illicit use, combating money laundering, and promoting national security by collecting, analysing, and disseminating financial intelligence and strategically using monetary authorities.
Fork: A fork in a blockchain represents a split where two competing chains are formed from the same history. It can happen unintentionally—where two miners find a successful block simultaneously. Alternatively, developers can initiate a fork for several reasons, like offering more functionality or helping to resolve a significant hack. Examples include Bitcoin in 2017, which led to the creation of Bitcoin Cash, and Ethereum in 2021, known as the London fork, which helped reduce transaction fee volatility.
FUD: FUD is an acronym often used in the crypto world. It stands for “fear, uncertainty, and doubt.” The term is often used on social media and can lead to a cryptocurrency price drop.
Fungible Token: A fungible token means that any unit of the asset is interchangeable with any other. This is the same property coins in a purse have – a $1 coin has the same value as any other $1 coin. The opposite of this is non-fungible tokens.
G
Genesis Block: The genesis block is the term for the first block created on a blockchain. It has a height of 0 and contains the first transactions processed on the network.
H
Hacking: Hacking is an attempt to gain unauthorised access to a computer system or network.
Halving: The initial reward for a Bitcoin block being mined was 50 BTC. This amount halves after every 210,000 blocks so that, on current forecasts, it is estimated that there will be no further BTC created in or near the year 2140, as by then the halving process will have exceeded the eight decimal places by which a bitcoin can be subdivided. As such, only a little under 21 million BTC will ever be created. Halving refers to the process. The current halving rate and countdown can be viewed here.
Hardware Wallet: A hardware wallet is a physical device for storing a user’s private key, which is used to facilitate cryptocurrency transactions.
Hash Rate: A hash rate measures the combined computational power used to mine and process crypto asset transactions at any time.
HODL: HODL is a term in the industry for holding onto your crypto and not selling it—even in a turbulent market. The term is sometimes misattributed as an acronym for “hold on for dear life,” but it is actually from a Bitcointalk forum post from 2013 in which a user misspelled “hold.”
Hyperledger: In December 2015, the Linux Foundation created Hyperledger, a global enterprise blockchain project. Participants include Samsung, IBM, and Microsoft. The project provides the necessary infrastructure, standards, guidelines, and tools to build open-source blockchains and related applications across various industries.
I
Initial Coin Offering (ICO): An initial coin offering (ICO) is a digital way to raise funds within a limited period by issuing a cryptocurrency related to a specific project, business model or idea. The cryptocurrency typically is created and disseminated using distributed ledger or blockchain technology and may be tradable on particular platforms. Between 2017 and 2018, there was a boom in ICOs, with the majority running on the Ethereum blockchain.
J
K
Know-Your-Customer (KYC): Know-your-customer (KYC) standards help protect the financial services industry against fraud, money laundering, corruption and terrorist financing. They involve the checking and verifying a client’s identity both at the onboarding stage and as part of continuing obligations.
L
Litecoin (LTC): Litecoin is one of the more successful alternative cryptocurrencies to Bitcoin. The former shares several characteristics with Bitcoin – including the codebase – but it has a far greater distribution potential of 84 million coins.
M
Mainnet: Mainnet is a term used to describe individual and independent blockchains running their protocol and utilising their technology. Examples include EOS, Polygon and VeChain.
Mining: Mining is the process of adding transactions to the blockchain. An associated mining function introduces new coins into the existing circulating supply as rewards for the individuals responsible for verifying the earlier transaction. Blockchains can use several mining methods, such as proof of work and stake.
Mixer: A mixer is a service where a user pools some crypto assets with other users’ funds and then receives some funds back from this pool. The aim is to make it difficult or impossible to trace the source of the funds since all the funds are mixed. Mixers are commonly used by those seeking financial privacy or criminals seeking to launder proceeds of crime.
Mixer First Funding: Mixer first funding refers to addresses that receive their first transaction from a mixer, coin swap service or a low know-your-customer (KYC) exchange.
N
Native Asset: A native asset – or sometimes seen as native cryptocurrency – is simply the cryptocurrency issued directly by the blockchain protocol on which it runs. Hence, for example, ETH is the native asset of Ethereum.
Neobank: A neobank is an institution that provides banking services exclusively online via apps and online platforms.
Node: Any computer that connects to a particular network is called a node. Nodes that thoroughly verify all of the consensus rules are called full nodes.
Non-fungible Token: A non-fungible token (NFT) is a crypto asset that records ownership of a digital item. Unlike crypto assets such as Ether (ETH) and Bitcoin (BTC), NFTs are not mutually interchangeable. Each NFT is a unique asset in the digital world and can be bought and sold like any other item.
NPRM: A notice of proposed rulemaking (NPRM) is a public notice issued by law when an independent agency of the US government wishes to add, remove or change a rule or regulation as part of the rulemaking process.
O
P
Paper Wallet: A paper wallet is an offline method for storing public and private keys. Different websites and apps are available to help cryptocurrency owners download their keys into a secure printed paper format. However, it could be as simple as a slip of paper with the private key details written on it.
Peer-to-Peer (P2P): Peer-to-peer describes the decentralised nature of the computer network that underpins much of the crypto industry. It allows each computer in a network to act as a server, removing the need for a central server.
Privacy Coin: A privacy coin is a crypto asset based on a blockchain that does not publicly reveal all details of transactions, making blockchain analytics difficult or impossible. Examples include Monero and ZCash.
Privacy Wallet: A privacy wallet is a wallet software providing additional functionality to enhance privacy.
Private Key: Every address has an associated private key that must be kept secret, since knowledge of it allows the owner to send or spend any cryptocurrency associated with it. It can be thought of as the password which allows someone to access their emails. A private key is created through a mathematical process and is a string of numbers and letters. As such, it can be kept online – referred to as hot storage – or offline, which is known as cold storage. The private key is generated from the public key, and this public-private pair of keys is required for anyone transacting cryptocurrencies. It is used when making a transaction to confirm that the appropriate person or entity is behind the transaction.
Protocol: A protocol is the language participants in a network must speak if they wish to participate. The Bitcoin Protocol is a communications specification. The protocol is defined by the rules for network communication, as opposed to the rules for transaction or block validity (consensus rules). There is currently no formal written standard for the Bitcoin Protocol; instead, there is a reference client, which is considered the correct protocol specification. Multiple networks could theoretically use the same protocol, but in practice, this is rare for public networks, and it usually only happens when there is a hard fork. A planned protocol change often accompanies these hard forks.
Pseudonymous: The nature of blockchain transactions, verified with a public key and the details stored on the blockchain, means that most blockchain transactions are not anonymous but pseudonymous, in that details of public addresses and data transfer to and from those addresses is readily available.
Public Key: A public and private key pair are created using a mathematical process. Then, using a series of hash functions, the public key is transformed into a more user-friendly format called an ‘address.’ This is used to send and receive cryptocurrency. Unlike the private key, the public key can be shared publicly without fear of losing funds; however, sharing this information can be used to connect the public key (and therefore address) to an entity using blockchain analytics.
Pump and Dump: Much like pump-and-dump scams affecting regular stocks and shares, this process occurs in crypto when malevolent individuals or entities spread misinformation about an asset to raise the price artificially. At this point, they will offload their investment.
Q
R
Ripple: Ripple is the company behind another popular eponymous crypto, XRP.
S
Sanctions: Sanctions are foreign policy instruments that countries or international organisations impose on other countries or entities and individuals within those nations. They are designed to penalise illegal activities, including financial crimes, humanitarian crimes, and terrorism, or to achieve diplomatic objectives. Economic sanctions prevent firms and individuals from doing business in or with countries named on a sanctions list.
Satoshi Nakamoto: Satoshi Nakamoto was the author of the original paper proposing a peer-to-peer electronic cash system that introduced the world to Bitcoin. Whilst Nakamoto’s identity has remained elusive, the Satoshi is officially recognised as the smallest unit of Bitcoin—equivalent to 100 millionth.
Security Token: A security token represents a stake in an asset, most often a company, but in digitised form. Most traditional securities like shares, bonds, and ETFs can be digitised—or tokenised—to become security tokens. While they use the underlying blockchain technology, these assets differ from cryptocurrencies.
Silk Road: Silk Road was the first modern darknet market. This online illegal market operated on the dark web, which was accessed through software allowing anonymous communication – such as Tor. Users could access the network and purchase illicit items and services using cryptocurrencies like Bitcoin. Silk Road was shut down in 2013, but several similar services have emerged.
Smart Contract: A smart contract is a computer program or transaction protocol intended to automatically execute, control or document legally relevant events and actions according to a contract’s or an agreement’s terms. Nick Szabo initially concepted it in 1998 and later implemented it on blockchains such as Ethereum.
Standard: A standard is a formalised written specification of rules. If something adheres to the rules, it can be considered standard-compliant, which may confer certain benefits. Examples include the ERC20 standard for fungible tokens in Ethereum, and the RFC821 standard for email over the internet using SMTP. A standard is often the formal definition of the rules that define a protocol, such as in the case of SMTP and RFC821.
T
Token: The term token refers to a programmable unit of value recorded and transferred on a blockchain. However, it is distinct from the native asset, the cryptocurrency created by the protocol and used to pay fees, designed as a block subsidy or used in the consensus protocol. The most popular token standard is ERC-20 on the Ethereum blockchain. Tether (USDT) is an example of a token on the Ethereum blockchain. Ether (ETH) is the native asset of Ethereum.
Token Swap: A token swap is when a blockchain migrates from having its token live on another blockchain, such as Ethereum, to its blockchain. This occurs when a project uses a pre-existing blockchain to develop and grow its community, and then once its main net is ready, it launches a native asset on this. Users can then swap their tokens on the other blockchain for native assets on the main net.
Tokenise: To tokenise an asset, one converts the ownership rights into a digital token and incorporates the asset onto a blockchain or other distributed ledger.
Transaction Fee: The transaction fee is applied to any transaction, for example, when converting fiat currencies into cryptocurrencies or one cryptocurrency to another. The charge is determined by the network capacity to entice the blockchain miner to include the transaction in an upcoming block, thereby processing the transaction. However, the principal of the transaction fee is the same as any other traditional transaction fee, such as converting sterling into dollars or vice versa.
U
Unbanked: Unbanked is a term used to describe those individuals who are either unable to or have chosen not to use traditional banks or similar entities for their financial transactions. Hence, they could rely on cryptocurrencies and distributed ledgers for any transaction that does not involve handing over fiat currencies.
Unregulated: Simply any aspect of crypto or regular financial services transactions outside an existing regulatory regime.
Utility Token: A utility token is a blockchain-based asset bought for a specific product, service, or application in the future. It is not used to provide a return, but, as the name suggests, the tokens are to be utilised in some form. Hence, they will have some inherent functionality. An example is Binance Coin.
V
Vanity Address: A vanity address is one in which a number of the alphanumeric characters in an address has been adapted to include a specific word or phrase. Millions of combinations may need to be generated before the particular phrase or word is generated. Still, the outcome will be an address that is personal and easily identifiable but retains security.
Virtual Asset Service Provider: The Financial Action Task Force (FATF) describes a virtual asset service provider (VASP) as an entity that facilitates any of these five business activities; the exchange between virtual assets and fiat currencies; the exchange between one or more forms of virtual assets; the transfer of virtual assets between crypto wallets; the safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; or the participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
W
Wallet: A wallet is a collection of crypto asset addresses and the corresponding private keys. They allow crypto assets to be stored, keeping them safe and accessible. They also allow you to send, receive, and spend crypto assets. Wallets can be self-hosted (where you retain control of the private keys) or hosted (where a custodian stores the private keys on your behalf).
Wei: Wei is the smallest denomination of Ether (ETH), the cryptocurrency used on the Ethereum network. 1 Ether = 1,000,000,000,000,000,000 Wei, and other denominations of Ether, such as Gwei—1 Gwei = 1 million Wei—may help describe small-value transactions, typically used for transaction fees or when setting the gas limit of a transaction on Ethereum.
Whales: A whale is an individual or entity holding significant amounts of cryptocurrency. Because of the magnitude of their ownership, there is potential to manipulate the valuation of the currency held.
Whitelist: Whitelist refers to a list of allowed and identified individuals, institutions, computer programs, or cryptocurrency addresses. In general, allowlists are related to a particular service, event, or information.
X
XRP: XRP is the ticker symbol for the Ripple cryptocurrency and digital payment network, which was first released in 2012. Ripple’s products are more akin to the services provided by SWIFT, in that they focus on providing a global payments network and currency exchange services.
Y
Z
Image: Credit: Ivan Babydov
