Cryptocurrency Glossary
Essential cryptocurrency terms and definitions for Australian investors.
AUSTRAC
Australia's financial intelligence agency responsible for anti-money laundering and counter-terrorism financing regulation. Crypto exchanges operating in Australia must be AUSTRAC-registered.
Bitcoin (BTC)
The first and most well-known cryptocurrency, created in 2009. Often used as a digital store of value and referred to as "digital gold".
Cold Wallet
A cryptocurrency wallet that is not connected to the internet, providing enhanced security for storing crypto assets. Examples include hardware wallets like BitBox02 or Ledger.
Hot Wallet
A cryptocurrency wallet that is connected to the internet, typically provided by exchanges or mobile apps. More convenient but less secure than cold wallets.
KYC (Know Your Customer)
Identity verification process required by regulated exchanges. Typically involves submitting ID documents, proof of address, and sometimes a selfie.
PayID
An Australian payment addressing service that allows instant bank transfers using an email address or phone number. Commonly used to fund crypto exchange accounts.
Osko
An Australian fast payment service enabling real-time transfers between bank accounts. Used as an alternative to PayID for funding crypto exchanges.
Trading Pair
Two currencies that can be traded against each other. For example, BTC/AUD allows you to buy Bitcoin with Australian Dollars.
Market Order
An order to buy or sell cryptocurrency immediately at the current market price. Executes quickly but may have higher fees and price slippage.
Limit Order
An order to buy or sell cryptocurrency at a specific price or better. May not execute immediately but typically has lower fees than market orders.
Spread
The difference between the buy (ask) price and sell (bid) price of a cryptocurrency. Exchanges make money from the spread.
ACCC
Australian Competition and Consumer Commission - protects consumer rights and enforces fair trading practices, including in the cryptocurrency industry.
ASIC
Australian Securities and Investments Commission - regulates financial services in Australia, including some aspects of cryptocurrency trading.
AFCA
Australian Financial Complaints Authority - independent dispute resolution service for financial services. Note: not all crypto exchanges are AFCA-registered.
ATO
Australian Taxation Office - Australia's tax authority. Crypto transactions are taxable events in Australia and must be reported to the ATO.
Capital Gains Tax (CGT)
Tax on the profit made from selling or trading cryptocurrency. Applied when you dispose of crypto assets in Australia.
DCA (Dollar Cost Averaging)
Investment strategy of buying a fixed dollar amount of cryptocurrency at regular intervals, regardless of price. Reduces the impact of volatility.
HODL
Slang term meaning "Hold On for Dear Life" - a strategy of buying and holding cryptocurrency long-term rather than trading frequently.
Altcoin
Any cryptocurrency other than Bitcoin. Examples include Ethereum, Cardano, Solana, etc.
Exchange
A platform where users can buy, sell, and trade cryptocurrencies. Australian examples include Kraken, Swyftx, Cointree, and Bitcoin.com.au.
Referral Bonus
Promotional incentive where both the referrer and new user (referee) receive rewards (usually cryptocurrency) when the new user signs up and completes qualifying trades.
Stablecoin
A cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like the US Dollar (e.g., USDT, USDC).
Blockchain
A distributed digital ledger that records all cryptocurrency transactions across a network of computers. Forms the underlying technology of cryptocurrencies.
Private Key
A secret cryptographic code that proves ownership of cryptocurrency. Must be kept secure - if lost, access to funds is permanently lost.
Seed Phrase
A series of 12-24 words that can be used to recover a cryptocurrency wallet. Must be stored securely offline and never shared.
2FA (Two-Factor Authentication)
Security feature requiring two forms of verification (e.g., password + SMS code or authenticator app) to access an account.
Withdrawal
The process of moving cryptocurrency from an exchange to another wallet or converting it to fiat currency and transferring to a bank account.
Deposit
The process of adding funds (fiat currency or cryptocurrency) to your exchange account.
Fiat Currency
Government-issued currency like Australian Dollars (AUD), US Dollars (USD), or Euros. Not backed by physical commodities.
Volatility
The degree of price variation over time. Cryptocurrencies are known for high volatility with significant price swings.
30 cryptocurrency terms defined