Glossary of Crypto Terms

Glossary of Cryptocurrency Terms for North Cyprus (TRNC) Residents

Cryptocurrency terminology can be confusing, particularly for residents of North Cyprus (TRNC) who often encounter crypto out of practical necessity rather than technical interest. Many problems—financial loss, compliance issues, or security mistakes—stem from misunderstandings of basic terms rather than deliberate risk-taking.

This glossary provides clear, plain-English definitions of the most commonly encountered cryptocurrency terms, with explanations tailored to how crypto is actually used in the TRNC. It is designed as a reference page to support all other crypto-related guides on this site.
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Address (Wallet Address)

A wallet address is a public identifier used to send or receive cryptocurrency. It is similar to a bank account number.

Important points:
• Addresses are public and visible on the blockchain
• Sending funds to the wrong address is usually irreversible
• Addresses are network-specific
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AML (Anti–Money Laundering)

AML refers to laws and procedures designed to prevent financial crime.

In practice for TRNC residents:
• AML checks are enforced by foreign exchanges and banks
• Users may be asked to explain the source of funds
• AML applies regardless of local regulation
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Blockchain

A blockchain is a distributed, public ledger that records cryptocurrency transactions.

Key characteristics:
• Transactions are permanent
• Data is transparent and traceable
• No central authority controls the ledger
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Centralised Exchange (CEX)

A centralised exchange is a crypto trading platform operated by a company.
Examples include large international exchanges commonly used by TRNC residents.

Key points:
• Funds are held by the exchange
• KYC is required
• Accounts can be frozen or restricted
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Cold Storage

Cold storage refers to keeping cryptocurrency private keys completely offline.
Common forms:
• Hardware wallets
• Offline backups of recovery phrases

Cold storage is the safest method for long-term holdings.
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Custodial Wallet

A custodial wallet is a wallet where a third party controls the private keys.

Examples:
• Exchange wallets
• Some online wallet services

Users do not have full control of funds in custodial wallets.
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Decentralised Exchange (DEX)

A decentralised exchange allows users to trade crypto directly from their own wallets.

Key features:
• No custody of funds
• No customer support
• Higher technical complexity

DEXs are usually used by experienced users.
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Fiat Currency

Fiat currency is government-issued money, such as:
• Turkish Lira
• British Pound
• Euro
• US Dollar

Crypto is not fiat currency and is not legal tender in the TRNC.
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Gas Fee / Network Fee

A gas fee is the cost paid to process a transaction on a blockchain.

Important considerations:
• Fees vary by network
• High congestion increases fees
• Fees are non-refundable
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Hardware Wallet

A hardware wallet is a physical device that stores private keys offline.
Benefits:
• Strong protection against hacking
• Suitable for long-term storage

Loss of the recovery phrase means permanent loss of funds.
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Hash / Transaction Hash (TXID)

A transaction hash is a unique identifier for a blockchain transaction.

It is used to:
• Track payments
• Prove transactions occurred
• Investigate issues
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Hot Wallet

A hot wallet is a wallet connected to the internet.

Examples:
• Mobile wallets
• Desktop wallets

Hot wallets are convenient but less secure than cold storage.
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KYC (Know Your Customer)

KYC is the identity verification process used by exchanges.

Typically requires:
• Photo ID
• Proof of address
• Selfie or video verification

KYC is unavoidable when using reputable platforms.
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Liquidity

Liquidity refers to how easily an asset can be bought or sold without affecting its price.

High liquidity:
• Faster trades
• Better pricing

Major cryptocurrencies and stablecoins usually have higher liquidity.
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Multi-Signature (Multi-Sig) Wallet

A multi-signature wallet requires multiple approvals to authorise a transaction.

Used for:
• Businesses
• Shared ownership
• Enhanced security

Multi-sig reduces single-point-of-failure risk.
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Network (Blockchain Network)

A network is the blockchain on which a cryptocurrency operates.

Examples:
• Different networks may support the same token
• Sending on the wrong network can result in loss

Always confirm network compatibility.
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Non-Custodial Wallet

A non-custodial wallet gives the user full control over private keys.

Key features:
• No third-party control
• Full responsibility lies with the user

Most personal wallets are non-custodial.
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Peer-to-Peer (P2P)

Peer-to-peer refers to direct transactions between individuals.

Common in the TRNC due to banking limitations.
Risks include:
• Fraud
• Lack of documentation
• Counterparty disputes
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Private Key

A private key is the secret cryptographic code that controls access to crypto funds.

Critical rules:
• Never share it
• Loss means permanent loss of funds
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Public Key

A public key is mathematically linked to a private key and is used to generate wallet addresses.
It does not give access to funds on its own.
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Recovery Phrase / Seed Phrase

A recovery phrase is a set of words used to restore access to a wallet.
Best practices:
• Store offline
• Never share
• Never store digitally

This is the single most important backup.
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Stablecoin

A stablecoin is a cryptocurrency designed to maintain a stable value.
Common examples:
• USDT
• USDC

Widely used in the TRNC for payments and value storage.
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Token

A token is a crypto asset built on an existing blockchain.
Not all tokens are currencies; many represent utility or access.
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Transaction Confirmation

A confirmation is a block added to the blockchain confirming a transaction.
More confirmations:
• Greater security
• Higher certainty
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Volatility

Volatility refers to how much a price fluctuates.
Crypto volatility can be:
• Extreme
• Rapid

Stablecoins are used to reduce volatility risk.
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Wallet

A wallet stores private keys and allows users to send and receive crypto.
Wallets do not store coins themselves—they control access.
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Whitelist

A whitelist is a list of approved wallet addresses.
Used to:
• Prevent unauthorised transfers
• Improve security
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Summary

Understanding cryptocurrency terminology is essential for using crypto safely in North Cyprus. Many of the risks associated with crypto—loss, fraud, compliance issues—arise from misunderstanding rather than complexity itself.

This glossary is intended as a living reference to support all other crypto guides on whatsonintrnc.com. Residents are encouraged to refer back to it regularly as they navigate the crypto landscape in the TRNC.
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Informational Notice

This article is provided for general informational purposes only and does not constitute legal, financial, or investment advice.