Crypto Terms in Plain English, in the Order You Meet Them

These are the words you meet in the first fortnight, in roughly the order you meet them. Each one gets a sentence about what it means and a sentence about where it bites you.

The words on the sign-up screen

KYC — proving who you are with a photo of an ID document and a face scan. Most exchanges will not let you deposit or withdraw money until it clears.

2FA — a second code on top of your password. From an authenticator app it is generated on your device; by SMS it depends on your phone number, which is why SIM-swap fraud exists.

Recovery key — the string an authenticator app shows you once, when you set it up. Written on paper it turns a lost phone into a two-minute problem. Not written down, it turns into weeks.

Anti-phishing code — a word you choose that then appears in every genuine email the exchange sends you. Mail without it is fake.

Whitelist — a list of withdrawal addresses you approved in advance. Once it is on, a stolen password cannot move your coins anywhere new.

The words on the trading screen

Spot — you buy it, you hold it. The price can fall, but nothing closes your position for you.

Futures / margin / leverage — borrowed size. Move against you far enough and the position is closed automatically, at a loss you did not choose. This is where beginners lose everything in an afternoon.

Liquidation — that automatic close. Not "a bad day"; the position is simply gone.

Market order — fills immediately at whatever the book is offering. Simple, and occasionally expensive.

Limit order — waits at the price you set. Might never fill, but the price is yours.

Maker / taker — you are a maker when your order sits and waits, a taker when it eats an order that was already sitting there. Exchanges usually charge takers slightly more.

Order book — the live list of what people are offering to buy and sell at.

Liquidity / depth — how thick that list is. Thick means your order barely moves the price; thin means it does.

Spread — the gap between the best buy price and the best sell price. Buy and sell in the same breath and you lose that gap even with zero fees.

Slippage — the difference between the price you saw and the price you got. On obscure coins this is usually your largest cost.

The words about moving money

Stablecoin (USDT, USDC) — a token that tries to hold a fixed value against a currency, usually the dollar. It is the cash layer of the crypto world. The peg rests on the issuer's reserves, not on physics.

Fiat — ordinary government money. "Fiat on-ramp" means turning it into crypto.

P2P — buying from another person with the exchange holding the coins in escrow until payment is confirmed. The main funding route in much of the world.

Wallet address — a long string that receives funds. Public, shareable, and worth checking character by character before you send anything.

Private key / seed phrase — the thing that actually controls the coins. Anyone who has it has the money. Lose it and no institution on earth can restore it for you — that is the real difference between crypto and a bank.

Network / chain — Ethereum, BNB Chain, Tron and the rest are separate systems. The same coin often exists on several.

Choosing the network on a withdrawal — the single most common way beginners lose funds permanently. Send on a chain the receiving side does not support and the money usually cannot be retrieved.

Gas / network fee — paid to the blockchain, not to the exchange. Varies enormously between chains, and rises when a chain is busy.

Confirmations — blocks added after your transaction was recorded. More confirmations, less reversible. This is why transfers take minutes rather than seconds.

Three you will see in scam messages

Token approval — permission you grant a contract to move a token on your behalf. Granted carelessly, it is how wallets get emptied by tokens you never bought.

Proof of reserves — an exchange publishing what it holds. Better than nothing, but it speaks to assets and says little about liabilities. Treat it as one input, not a guarantee.

Airdrop — free tokens, sometimes genuine, often bait. An unfamiliar token arriving in your wallet is a reason to ignore it, not to investigate it.

Words you can safely postpone

DeFi, NFTs, liquidity mining, Layer 2, bridges, restaking. All real; none of them belong in your first month. Every one of them adds a way to make an expensive mistake, and none of them helps you with the thing you are actually doing right now, which is getting money in, buying something ordinary, and getting money back out.

Come back to them when the basic loop no longer requires any thought.

Read next

• What a $1,000 trade actually costs you — spread and slippage in practice
• Signing up for Binance — where the security settings above actually live
• Seven messages that take money from beginners — the scam vocabulary in context