Where Canadians Learn All About Crypto

Common Crypto Terms Explained

Crypto terms to know

The Crypto and Web3 community has a lot of jargon and terms that might seem overwhelming and technical to a newcomer. It’s a space that’s constantly changing and developing, a space that’s looking to improve all the time. Even experienced individuals will always have something new to learn, so don’t worry about feeling intimidated by all the words being thrown around. This list we’ve compiled explains some terms used when talking about the crypto market and terms you’ll come across when making transactions. It’s not an exhaustive list by any means, otherwise we’d be here forever!

Bear market

During a bear market, there is low demand for supply, low confidence in the market, and decreasing prices. These prolonged periods are more difficult to trade in, especially for people new to the crypto market. It’s hard to know when this period is over and when prices have reached their lowest and are on the rise.


Bull market

A bull market on the other hand, also called a bull run, is a long period of time where the demand outweighs the supply. People are buying and are confident in the market and market prices also increase during this time. As people buy more and have a positive outlook about the market, the prices will keep going up. 

These periods don’t last forever, and usually the end of a bull market is usually marked by a sharp downward trend of prices. This is where a loss of confidence in the market leads to more people selling, dragging down the price.



Burning crypto means a certain amount of tokens are permanently taken out of circulation. This reduces the overall supply of the token by sending them to a wallet address that can receive coins but can’t send them, permanently storing them away. As the total supply decreases, there is a chance that the value of remaining tokens may rise, though not always. 



A bridge, as you can imagine, connects different blockchain networks. Each network exists individually and tokens are not always compatible with each other, so bridges allow these tokens to be moved from one network to another. 



Defi is the short form for decentralized finance. This is a term for financial services and products on public blockchains. They are peer-to-peer, open to anyone, and can be done anywhere in the world with internet connection. Defi essentially has the same services traditional banks offer, but with more competitive fees, no paperwork, and with more transparency. Defi moves away from the centralized finance model where it’s tightly controlled by institutions and records are not transparent to the public.



A crypto exchange is where people can buy and sell cryptocurrencies. These exchanges may also offer services like storage for your assets or learning tools about crypto, and the bigger exchanges will likely have more variety of cryptocurrencies to trade. Exchanges can be broken down into centralized and decentralized.

Centralized exchanges (CEX) have an intermediary between buyer and seller to make sure transactions run smoothly, which means there may be an additional fee to pay to the intermediary. Centralized exchanges also have custodial wallets, meaning they have a record of the crypto you hold and you don’t have complete control over your funds. 

Decentralized exchanges (DEX) cut out the third-party and conduct transactions in a trustless environment. These are peer-to-peer transactions where funds are not held by anyone in the middle, giving users complete control over their funds. 


Gas fee

Gas fees are something you’ll see across all networks, which is a cost that’s required when doing transactions. This fee goes to miners who validate these transactions and include them in the block. Gas fees depend on a few factors, such as network traffic, which can cause it to fluctuate. You can usually save a bit of money if you time your purchases during times of lower gas fees.



Liquidity refers to how easily a crypto asset can be traded for another asset or fiat currency without affecting the price too much. Good liquidity means the asset is easily and quickly bought or sold while the price remains stable. Bad/low liquidity means the asset can still be traded, but it will drastically change the price, or trading can’t be done easily.



As you can tell by the terms, mainnet (main network) is where a crypto protocol is developed and deployed, and transactions are recorded on a blockchain. This version of a network is usually final and fully functional for public use.

On the other hand, testnet (test network) is when a network is not at full capacity yet. It is still in the testing phase for developers and programmers to work out details and troubleshoot before launching it to the public. Testnet provides a controlled environment for tests without disrupting the whole blockchain should issues come up.



Crypto mining follows the Proof of Work mechanism, and is the process where different cryptocurrencies generate new coins for circulation and verify new transactions. It involves a huge network of computers to secure and verify blockchains, and the reward for the processing is new coins. Miners earn cryptocurrency without having to pay money for it, because they work for it instead. It’s a complicated process with a lot of code, data, electricity, and time. But it is essential to keep blockchains secured and verified, which ensures it continues as a decentralized network.



Minting follows the Proof of Stake mechanism, where new coins are created through data verification, new blocks are created through staking, and documenting information on the blockchain. The difference between minting and mining is that in minting, the Proof of Stake mechanism means new coins are created by users stake their existing assets to validate transactions, and Proof of Work mechanism creates coins through complex computer work. 



NFTs are non-fungible tokens that represent a unique asset on the blockchain and can’t be replicated once owned. They can represent digital or real-world items like art or real-estate, although the majority of NFTs come in the form of collectibles, such as digital artwork. The value of some NFTs can be worth millions of dollars because the scarcity drives up the value, or the creators of them are highly popular. Pretty much anything can be minted into an NFT.


On/off ramp

Crypto on/off ramps lets users trade between cryptocurrencies and fiat, acting as a gateway into and out of the crypto world. Think of a highway ramp, where going on the ramp means you’re purchasing a cryptocurrency with fiat currency to enter the crypto ecosystem. When you want to sell the crypto for fiat, you are leaving the ecosystem, or off-ramping. Some services may only be for on- or off-ramping, while some bigger exchanges will also allow fiat purchases of crypto. These are great for new users, who will have to buy crypto first to get into the market.



Staking in crypto is when a user uses their existing cryptocurrency to secure a network on a blockchain. Their funds are put to work to verify and secure transactions, and the reward comes in the form of new coins. Usually the higher the amount is staked, the more chance there is to earn new coins. This method of securing networks holds participants accountable, where in the case of malicious activity or dishonest actions, they could lose their staked crypto or have other penalties.



Withdrawing your crypto usually means moving the funds from one place to another. You can be moving it from one wallet to another, or withdraw crypto for fiat currency. If you are exchanging your funds for fiat, this is also referred to as “selling” or “cashing out” for fiat. Many people use these terms interchangeably.


Smart contract

Smart contracts are self-executing contracts that are automated agreements between buyer and seller written directly in code, making them final and irreversible. These agreements work like digital “if-then” statements, where if certain conditions are met then the agreement is complete. Smart contracts eliminate the need for third-party intermediaries, who would otherwise need to manage and approve transactions. Smart contracts also power decentralized apps, varying from finance tools to game experiences.

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