A non-exhaustive list of some of the frequently-used terms  and phrases in the cryptocurrency space.


Accelerating returns

Where continually-increasing innovation and disruption results from exponential technological improvement



Where a system does not simply resist attacks, but owing to feedback loops becomes more resilient following each attack


Asymmetric payoff

An investment where the potential upside is orders of magnitude higher than the risk of downside


Byzantine General’s Problem

Referring to the difficulty in communications between military commanders in the field and a rapidly-changing imperial powerbase in the later Roman Empire. This a game theory problem, setting out the difficulties that decentralised parties will have in reaching consensus without the authority of a trusted central entity


Cantillon Effect

The principle that newly-created money creates disproportionate price inflation when injected into an economy, benefiting the early recipients of the new money and unfairly exposing those who receive money at a later date, since price inflation has set in by the time they receive it


Category Error

The fallacy that a single property of something is representative of its whole


Commodity Money

Money that is not a liability of another party and has value in and of itself without counterparty risk. Gold, silver and Bitcoin have been cited as examples of commodity money. There will typically be a cost associated with the production of commodity money, whether in terms of mining or the expenditure of electricity. See also ‘Fiat Money’


Consensus Protocol

A means of achieving consensus between participants as to what the ledger should contain at a specific time. Proof of work and proof of stake are the most widely used consensus protocols


Double Spending Problem

A flaw in digital cash systems where a single digital token could be spent more than once. Solved by Satoshi Nakamoto in the implementation of the Bitcoin protocol


Feedback Loop

Created when a system reacts to its environment, and new outputs are incorporated as fresh inputs, repeating ad infinitum


Fiat Money

Money that is issued by a government or central bank (or created by commercial banks via their lending activities). Fiat money exists largely as a liability of the central bank or its issuer, and its value is derived from trust in that issuer. There is typically zero cost to the creation of additional fiat money


First Conclusion Bias

The tendency to accept and adopt the first answer provided, without incorporating further debate, and whether or not such answer is provably correct


Gall’s law

The principle that making incremental changes to a system is preferable to building a new complex system from the ground up


Game Theory

 A branch of mathematics dealing with situations in which the outcome of a ‘player’s’ choice depends on the decisions of other ‘players’


Gartner Hype Cycle

A model to assess the maturity and adoption of new technologies over time


Gresham’s Law

Where two forms of commodity money have equivalent face value, the more valuable commodity will be saved by users and removed from circulation


Higher order effects

The consequences of actions will themselves have further consequences, frequently unforeseen at the outset


Impossible Trinity

The concept that a sovereign nation cannot simultaneously have a fixed exchange rate, an independent monetary policy, and free capital flows


Jevons Paradox

Consumption of a resource can increase in cases where using that resource actually increases efficiency


Lindy Effect

Also known as Lindy’s law, the proposal that the lifespan of non-perishable goods is proportionate to the current age of such goods



A misallocation of capital investment towards unproductive or misguided targets



Bitcoin miners participate in the process of creating new blocks that add transaction records to Bitcoin’s distributed ledger. In doing so, they maintain an immutable record of past transactions and are rewarded with bitcoins in the first transaction of each new block (known as the ‘coinbase’)


Moore’s law

Relating to improvements in computer science and chip speed, where it is observed that the number of transistors on a computer chip doubles roughly every two years


Moral Hazard

Where a party or institution that should prioritise the interests of those to whom it owes a duty of care is instead incentivised to prioritise its own interests.


Network effect

Where each new user to a network disproportionally improves the utility and value of the network



A computer connected to one or more other computers which follows protocol rules and shares information with other computers in its network. In Bitcoin, a ‘full node’ retains a complete copy of all historic transactions on the blockchain and continuously synchronises this with all other nodes in the network


Opportunity cost

Where taking one action means that another action cannot be taken instead



A basis set of rules, written in code, allowing data to be shared between computers in a particular way


Power Laws

Correlations between two quantities where a change in one leads to a proportional relative change in another, related quantity


Public Key Cryptography

The cryptographic system underlying many cryptocurrencies, including Bitcoin. The system uses related key pairs, consisting of a private key from which one or more public keys are derived. The public key can be openly disclosed and used to ‘receive’ transactions. Messages can only be sent, and value only transferred, by a transaction signed with a user’s private key


Prisoner’s dilemma

A thought experiment to explore whether it is better to cooperate or compete


Schelling Point

A default solution that people tend to choose in the absence of communication between them


Streisand Effect

Where an attempt to suppress or censor a thing actually has the opposite effect and results in further publication and dissemination of information relating to that thing


Unit Bias

A fallacious proposition that a single unit of an asset is the relevant amount to use when making comparisons and assessment


Veblen Good

The demand for a Veblen good increases as the price of the good goes up



A wallet is a program or device that holds your private keys and allows you to sign transact