Cryptocurrency Terms to Know Before You Invest

Here is a quick guide to cryptocurrency terms. We define technical terms, slang, acronyms, and other jargon related to cryptocurrency.



  • PAPER WALLET

    A physical piece of paper containing a private key, a public key, and often corresponding QR codes.

  • PASS PHRASE

    Similar to a password but often longer. Where a password is generally a single word -- a pass phrase can be a combination of words.

  • PDL

    Short for Price Down Limit. PDL is a price set by DeFi platforms. If the collateral crypto price decreases below the PDL set , customers' collateral's will be sold.

  • PEER COIN

    A cryptocurrency that uses both PoW and PoS in its consensus mechanism to offer increased security.

  • PERMISSION LESS

    Permission less refers to public block chains (like Bitcoin) - anyone can generate an address and transact BTC.

  • POL

    PoI stands for Proof-of-Importance. It is a new consensus algorithm that requires users to stake currency to participate in the consensus. Compared to PoS, it adds importance to staking. Thus, it takes into account one’s involvement in the network. PoI was introduced by NEM.

  • POS

    Proof of Stake. A consensus mechanism in which individuals use their holdings of a cryptocurrency to secure the platform in exchange for rewards.

  • POST

    Proof of Stake and Trust. A consensus mechanism used by Waltonchain that relies on token holders (nodes) to verify transactions while retaining information about nodes' past performance to give higher rewards to the most reliable nodes.

  • POW

    Proof of Work. A consensus mechanism for verifying transactions with computing power that creates new coins in the process.

  • PREMINE

    A portion of the total supply of a cryptocurrency reserved for its founders. These funds are often marked as funds to pay developers or fund future ventures, but cryptocurencies with premines are generally viewed as less legitimate and fair those without premines.

  • PRESALE

    A public or private offering of tokens to interested investors, generally offering a cheaper price than the coin’s ICO price. Pre-sales are commonly seen as marketing gimmicks.

  • PRIVACY COIN

    Any cryptocurrency that focuses on maintaining private transactions between users. Examples are Dash, ZCash, and Monero.

  • PRIVATE KEY

    Private keys are used to spend cryptocurrencies.

  • PROOF OF BURN

    A consensus mechanism for verifying a block chain in which miners send coins to an unspendable address

  • PROOF OF EXISTENCE

    A process of storing information that cannot be changed or deleted.

  • PROOF OF IMPORTANCE

    Proof-of-Importance is a consensus algorithm similar to PoS. Nodes "vest" currency to participate in the creation of blocks. Unlike PoS, Proof-of-Importance quantifies a person’s support of the network. NEM is using Proof-of-Importance.

  • PROOF OF PROVENANCE

    PoP for short. A consensus mechanism used by DigixDAO to track the movements of physical assets, identify their ownership, and ensure their security.

  • PROOF OF STATE

    PoS. A method of minting new coins and securing a platform by allowing users to stake their coins and receive more coins as a reward. Introduced as an energy efficient alternative to PoW (Proof of Work).

  • PROOF OF WORK

    The consensus algorithm introduced by Bitcoin. PoW requires miners to compete against each other to add new block and earn rewards