Reference
Cryptocurrency Glossary
Key terms and concepts every crypto investor should know.
Learn the Language of Digital Assets
Use this glossary as a quick reference for the cryptocurrency, blockchain, retirement-account, and custody terms used across the Coin IRA site.
A-C
Altcoin: Any cryptocurrency other than Bitcoin. Examples include Ethereum, Litecoin, and Solana.
Blockchain: A distributed, immutable digital ledger that records all transactions across a network of computers. Each "block" contains a group of transactions linked to the previous block.
Cold Storage: Storing cryptocurrency offline (disconnected from the internet) to protect it from hacking. Hardware wallets and air-gapped computers are common cold storage methods.
Custodian: A financial institution that holds and safeguards assets on behalf of clients. IRS regulations require IRA assets to be held by a qualified custodian.
D-H
DeFi (Decentralized Finance): Financial services built on blockchain technology that operate without traditional intermediaries like banks. Includes lending, borrowing, and trading platforms.
Exchange: A platform where you can buy, sell, and trade cryptocurrencies. Centralized exchanges (CEX) are operated by companies; decentralized exchanges (DEX) run on smart contracts.
Gas Fee: A fee paid to process transactions on a blockchain network, particularly Ethereum. Gas fees fluctuate based on network congestion.
HODL: Crypto slang for "hold" - the strategy of holding cryptocurrency long-term regardless of price volatility. Originated from a misspelling in a 2013 Bitcoin forum post.
Hot Wallet: A cryptocurrency wallet connected to the internet. Convenient for frequent trading but more vulnerable to hacking than cold storage.
I-P
IRA (Individual Retirement Account): A tax-advantaged account for retirement savings. Traditional IRAs offer tax-deferred growth; Roth IRAs offer tax-free growth on qualified withdrawals.
KYC (Know Your Customer): Identity verification procedures required by financial regulations. Includes verifying name, address, and government-issued ID.
Mining: The process of validating transactions and adding new blocks to a blockchain. Miners use computational power to solve complex mathematical problems and are rewarded with cryptocurrency.
Private Key: A cryptographic key that proves ownership of cryptocurrency and allows you to sign transactions. Must be kept secret - anyone with your private key can access your funds.
Public Key: A cryptographic key derived from your private key that serves as your wallet address. Safe to share - others use it to send cryptocurrency to you.
R-Z
Rollover: Moving funds from one retirement account (like a 401(k)) to another (like an IRA) without triggering taxes. Direct rollovers are transferred institution-to-institution.
Smart Contract: Self-executing code stored on a blockchain that automatically enforces the terms of an agreement. The foundation of DeFi and many blockchain applications.
Staking: Locking up cryptocurrency to support a blockchain network's operations (validating transactions) in exchange for rewards. Similar to earning interest.
Token: A digital asset created on an existing blockchain (like Ethereum). Tokens can represent anything from utility access to governance rights.
Wallet: Software or hardware that stores your cryptocurrency private keys and allows you to send and receive digital assets. Types include hot wallets, cold wallets, and hardware wallets.
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