Cryptocurrency Dictionary

This article is intended to be updated periodically to keep up with new features and development in the cryptocurrency industry. At TapCrypto our goal has always been to help people understand cryptocurrency better and to find ways to earn a little on the side. The following are common terms and definitions that will help new users gain a small understanding of crypto.

Crypto Terms

Brief descriptions of common crypto terms for those new to the cryptocurrency space.

Private Keys

Private keys are a unique set of numbers used to sign transactions and prove who owns the cryptocurrency address and funds. Without private keys you would be unable to send/interact with the specific address/your funds. It is critical that private keys are kept secret, as anyone with access to them can move crypto assets. Private keys are foundational and important to how cryptocurrency and more generally cryptography work.

Seed Phrase

Also known as a Recovery Phrase, is essentially a password that can be used to recover a crypto wallet if the device you are using is destroyed or lost. You can use the Seed Phrase to regain access to your funds. A recovery phrase is a series of random words, usually from 8 to 24 words, that are generated when first setting up a crypto wallet that is unique to your wallet and all associated wallet addresses. Like private keys, though different, it is critical that these remain private and secure as anyone with access or knowledge of them can transact with the funds in the wallet.

Cold Wallet

A wallet where the private keys are stored completely air-gaped and offline. Only connecting to the internet when necessary to move funds.

Hardware Wallet

A Type of cold wallet. These are specific hardware devices designed to run wallet applications. The benefit is that the private keys never leave the device and are always contained within the hardware wallet, even if you computer is infected with malware you can still send cryptocurrency securely without risk of your funds being stolen. It is advised to use a hardware wallet for long term secure storage. It is recommended to only purchase hardware wallets directly from the company and not via third party sellers such as Amazon, as the more touches in the supply chain the higher risk of device tampering.

Paper Wallet

A paper wallet is a way to store cryptocurrency offline without the use of a dedicated hardware device. Generally not recommended by the crypto community anymore, but it is a way to print out your private and public keys on a piece of paper for storage offline. It comes with increased risk of loss if you lose the paper or it’s destroyed.

Hot Wallet

A wallet that is connected to the internet. The need to move funds quickly requires an active internet connection. This comes with additional risks such as malware or viruses that can more easily penetrate a users security and potentially steal funds. Hot wallets are not bad per say, but it is not recommended for long term storage of crypto assets or for large amount of funds.

Software Wallet

A Type of hot wallet, software application that you can download on your computer or mobile device.

Centralized Exchange (CEX)

Also known as a Custodial Exchange. This is a company or service that enables users to trade one asset for another, including fiat currencies such as USD or EUR. The downside of these services is that they take possession or custody of your funds while they are on a platform. This introduces users to the risk of hacks or other generalized liquidity problems that can lead to complete loss in the case of insolvency of the company. Examples include but are not limited to Mt. Gox, Celsius, and Voyager. CEXs however, are the easiest way to on-ramp fiat currencies and for beginners just starting their crypto journey to store funds while they learn how self-custody wallets work. It is generally not recommended to keep funds long term of a custodial exchange service.

Decentralized Exchange (DEX)

A DEX is a peer-to-peer exchange or market where you can trade your crypto assets directly without ever providing custody of your funds to a centralized service. These trades are executed via smart contracts. DEXs tend to have less liquidity than CEXs, however that is changing rapidly with the rise of UniSwap or Osmosis and many others. Generally speaking, how a DEX works is a user puts funds into a liquidity pool (LP) to earn yield/interest in the form of trading fees from parties that use the DEX. Other users then can trade from one asset to the other using the liquidity provided to the network in that liquidity pool and the trading fees are distributed among those liquidity providers for the swap they enable.

Faucet Specific Terms

Crypto Terms and brief definitions specific to cryptocurrency faucets that users should know.

Faucet

A cryptocurrency faucet can take many shapes and forms, but generally speaking it is a website or an app that pays users a small amount of money in exchange for completing tasks and activities on the service. Read our Are Faucets Worth It? article for the ins and out of how crypto faucets work. Visit Faucet Tips to Live By for more insight and advice.

Captcha

Captcha is a mechanism for websites to prove you are not a bot to reduce abuse and spam. Captcha is used everywhere online, not just in crypto. Its a test, sometimes in the form of pictures or words, that a user must complete before being given access or in the case of crypto faucets, being credited with funds. Common types are Captcha are ReCaptcha, hCaptcha, SolveMedia, or RainCaptcha.

Claim

A claim is a general term for completing a task of a faucet, in exchange you receive a small amount of cryptocurrency. This can take various forms, such as completing a captcha, watching an advertisement, doing a shortlink, etc.

Paid to Click

There are a few different terms used to describe, such as PTC, sometimes also referred to as Get Paid To, GPT or Surf Ads. This is a type of faucet claim that consists of the user watching an advertisement or video for a set amount of time. PTC campaigns are used to promote websites, services and products and in exchange the user gets paid a small amount of crypto for their attention. This is outlined in more detail in our Are Faucets Worth It? article. Our favorite PTC/GPT sites are listed below, but you can also visit our list of Paid to Click Sites.

Shortlink

Shortlinks are another way users can earn cryptocurrencies on faucets, outlined in more detail on our Are Faucets Worth It? post. Essentially, users go through a series of challenges such as captcha and timers to complete a claim, viewing advertisements throughout.

Offerwall

Sometimes called Task Walls, are a monetization tool for many sites and applications. Visit How Do Offerwalls Work? for more details. In short, these are advertisements and product offerings users can watch or complete such as surveys, videos, playing games, etc. In return, you receive a varying amount of crypto.

Autofaucet

An autofaucet is a type of cryptocurrency faucet that enables users to claim automatically by leaving the screen/tab unattended. This allows users to go about their daily business while earning small amounts of crypto.

Microwallet

A microwallet is a service that provides users a custodial place to pool or collect funds, often earned from faucets. This service enables faucet site operators to pay their users while minimizing transaction fees and the users benefit by reducing the amount of unspent transaction outputs (UTXOs), thus reducing their fees when they wish to withdraw or spend the money. Most of the faucets available either pay only direct to a microwallet or contain the option to do so. The most widely used and trusted microwallet is FaucetPay. Microwallets are a custodial wallet solution, do not keep large amounts of funds on platform for a long period of time.

Loyalty Bonus

Loyalty bonuses are rewards are earned by users for repeated visits or activities. Most cryptocurrency faucets contain some element of reward bonuses to provide an incentive for the user to return. Oftentimes it’s a daily visit, where the user gets slightly higher faucet claim amounts as a reward.

Withdrawal limit

In an effort to reduce transaction fees, most faucet sites institute a withdrawal limit. A user must reach or exceed this defined balance limit in order to withdraw the cryptocurrency.

Payment Proof

Like almost everything online, there are risks that sites and service are acting with a disregard for integrity. This is especially true in the cryptocurrency space, and thus crypto faucets. Often users look to prove that a site will pay if they reach a withdrawal limit. This provides users some confidence that the site is a legit opportunity to earn cryptocurrency. These can also be faked by bad actors. This is why TapCrypto only publishes payment proofs that we ourselves have completed (no outside source proofs), watermarked and dated to show users that a site pays out. We update most sites payment proofs around once a month and inform users if a site halts payment. We want to ensure our readers use only legit sites and are not wasting time on scams.

Scam

Despite our best effort to prove sites payout via payment proofs, scams certainly still exist. A scam faucet is a dishonest site that generates ad revenue and never pays any portion to its users. This is why regularly updated payment proofs are necessary. Visit Scam Faucets & Sites to read more details on known running faucet scams and sites to avoid.

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