Glossary of terms

Blockchain

A shared ledger where transactions are permanently recorded by appending blocks. Once completed, the transactions are trackable and irreversible. The blockchain serves as a historical record of all transactions that ever occurred, from the genesis block to the latest block, hence the name blockchain.

Cryptocurrency

Sometimes called crypto, it refers to a digital or virtual currency secured by cryptography, which makes it nearly impossible to counterfeit. Cryptocurrencies exist solely in electronic form and operate on decentralized networks using blockchain technology.

Digital Asset

The tax definition of a digital asset is any digital representation of value recorded on a cryptographically secured, distributed ledger (blockchain) or similar technology. There are many types of digital assets, including cryptocurrencies, non-fungible tokens (NFTs), stablecoins, and security tokens.

Wallet

A wallet lets you manage and use your cryptocurrencies and other blockchain-based assets by securely generating and storing private keys and creating new public addresses. The private key is like your secret password, authorizing transfers and proving ownership of digital assets. The public address is like your bank account number — safe to share but doesn't allow others to access your funds.

Block Explorer

A tool used to view all transactions, past and current, on the blockchain. Block explorers provide useful information and can be used to verify wallet addresses or track activity.

Public Address

A public address in crypto is a unique, shareable alphanumeric code (like a bank account number) used to receive digital assets. It is generated from a private key using cryptography, allowing anyone to send funds to it while only the owner with the private key can withdraw.

Smart Contract

Digital contracts (or code) stored on a blockchain that are automatically executed when predetermined terms and conditions are met. Once completed, the transactions are trackable and irreversible.

KYC / AML

KYC (Know Your Customer) is a fundamental component of AML (Anti-Money Laundering) regulations, which requires financial institutions to verify the identity, suitability, and risks associated with customers to help prevent illegal activities such as money laundering and terrorism financing.

Stablecoin

A type of cryptocurrency designed to maintain a stable value, usually by pegging its price to a stable external asset like a fiat currency (e.g., the U.S. dollar), a commodity (like gold), or a basket of assets — offering the stability of traditional money with the benefits of blockchain.

USDC — Issued by Circle Internet. The world's largest regulated stablecoin.

Tether (USDT) — Launched by Tether Limited Inc. in 2014.

Bitcoin

Launched in 2009, Bitcoin was the first practical implementation of a blockchain and the first cryptocurrency. Bitcoin describes a networking protocol, a payment network, and a digital asset that can be bought, sold, or transferred directly without an intermediary like a bank or credit card provider.

Ethereum

Launched in 2015, Ethereum is a decentralized platform for building applications and tokens using smart contracts. Unlike Bitcoin's focus on digital money, Ethereum enables developers to create decentralized apps (dApps) that operate without downtime or intermediaries. Users pay for transactions using its native cryptocurrency, ether (ETH), the second-largest by market cap.

Fiat Currency

Fiat money is a type of currency issued by governments that isn't tied to a physical commodity like gold or silver. Its value comes from the authority of the issuing government and the balance between supply and demand. The U.S. dollar is one of the most well-known examples of fiat currency.