From the rapidly rising and falling values of Bitcoin to high-profile heists like the hacking of Binance, the world of cryptocurrencies is often in the headlines.

The world’s biggest crypto exchange said hackers had gained access to $6.3bn (£4.7bn) worth of digital assets, and while it has frozen about half, many remained in the hands of the thieves.

These stories are full of specialist language that people outside the industry struggle to understand.

So if you’re unsure what the blockchain or a crypto echange or even a cryptocurrency itself are, here are some key terms and what they mean.

While many may struggle with the finer points of crypto, pretty much everyone has heard of its most famous product: Bitcoin. But what actually is it?

Bitcoin is a cryptocurrency, which is to say a type of digital currency. Unlike traditional currencies, Bitcoin is not controlled by centralised financial institutions.

This makes it popular for people who think decentralisation can bring financial freedom, but it also makes it extremely volatile with it rising and falling in value at the whim of Bitcoin buyers and sellers.

Donald Trump has pledged to make the US the “crypto capital of the world” – backtracking on his previous claim that Bitcoin was a “scam”.

Its price topped a much-awaited threshold of $100,000 in December 2024, then rose to $120,000 in July 2025 as US politicians prepared to debate bills to regulate digital assets.

In October 2025, Bitcoin hit an all-time high of around $126,000, buoyed by a continued wave of institutional investment and positive market sentiment. But it has been known to plummet in value just as quickly as it spikes.

In early February 2026, its price dipped below $65,000 to effectively wipe out gains achieved under President Trump.

Against the backdrop of these frequent price fluctuations, speculation continues about the true identity of Bitcoin’s mysterious inventor known only as Satoshi Nakamoto.

Blockchain is the technology underpinning all cryptocurrencies, and many related products like non-fungible tokens (NFTs). In essence, it is a virtual spreadsheet on which all the buying and selling of crypto is recorded. They are arranged in blocks linked together in a giant chain – hence the name.

Every cryptocurrency transaction is individually recorded onto the blockchain by a huge network of volunteers verifying its authenticity by using computer programmes.

The incentive to do this for Bitcoin’s network is that the first person to validate transactions is rewarded in Bitcoin. This potentially lucrative process, known as mining, is also controversial because of the incredible amount of energy, external used as people the world over race to be the first to successfully update the blockchain.

A crypto exchange is the digital platform where investors can buy, sell and trade cryptocurrencies.

Similar to traditional investing, a crypto exchange acts as a brokerage where people can transfer traditional money, like pounds or dollars, in exchange for cryptocurrencies like Bitcoin or Ethereum. Most transactions are accompanied by fees.

Binance is the world’s biggest, which is part of what makes the hack so monumental.

A crypto wallet is a place where investors hold their cryptocurrency. There are two types, a hot wallet and a cold wallet.

Hot wallets are connected to the internet, and thus more accessible for quick transfers and easy access.

Cold wallets are physical devices like specially designed USB sticks that store crypto offline typically for safer and longer term storage.

Ethereum is used to describe both the second largest cryptocurrency after Bitcoin, represented by the Ether token, and the blockchain underpinning it. This supports an array of different applications and digital assets, such as non-fungible tokens.

It functions in a similar way to Bitcoin and other cryptocurrencies, but in 2022 switched to a greener operating system requiring less computers and energy.

ETFs are portfolios that let investors bet on multiple assets without having to buy any themselves. Traded on stock exchanges like shares, their value depends on how the overall portfolio performs in real time. They can comprise a combination of gold and silver bullion, for example, or a mix of shares in both technology and insurance companies.

A spot Bitcoin ETF buys the cryptocurrency directly, “on the spot”, at its current price, throughout the day.

While some ETFs already contained Bitcoin indirectly, the US approved several spot Bitcoin ETFs in January 2024. This allowed new investors, such as investment management firms like Blackrock and Fidelity, to enter the speculative world of Bitcoin without having to worry about digital wallets or navigating crypto exchanges.

Meme coins are a form of cryptocurrency used for fun and speculation.

They are typically created to capitalise on social media trends or viral memes – such as for internet-famous pygmy hippo Moo Deng.

But meme coins are heavily criticised for their speculative nature and the risk involved for investors, as they often have little prospect of accumulating value over time.

They can also be susceptible to “rug pulls” – where promoters of a cryptocurrency draw in buyers to raise the price of their coin, only to stop trading activity and make off with the money raised from sales.

Some celebrities have faced backlash after launching meme coins.

“Stable” is the key word here – this cryptocurrency differs from others as it is intends to be less volatile in value.

This typically works by the price being linked to an existing asset, for instance currencies like the US dollar or pound sterling, which in theory should make them more stable in price than cryptocurrencies that are not backed by assets.

Stablecoins themselves are usually controlled by companies that provide them, with transactions recorded on digital ledgers. While held up by some as the future of finance, high profile price collapses of stablecoins have alerted regulators to risks for investors and prompted scrutiny over their supposed stability.

XRP is a cryptocurrency used by a platform called the XRP Ledger. It was created by the co-founders of financial services company Ripple Labs in 2012 as a cheaper, faster alternative to Bitcoin.

The cryptocurrency has a fixed supply of 100 billion coins, which were created when it launched. Much of it is held by Ripple and periodically released into circulation.

Unlike cryptocurrencies such as Bitcoin, transactions made using XRP are verified through consensus – whereby the majority of validators on its peer-to-peer network must agree whether or not a transaction is valid before it is added to its blockchain.

This has been credited with allowing many transactions to take place simultaneously, at high speed and low cost – making it appealing to financial institutions or for processes like cross-border payments. But as with other cryptocurrencies, XRP has received regulatory scrutiny and seen sudden, sharp declines in value.

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