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CryptoTaxAudit Glossary

Common Terms and Definitions: Crypto, Trading, and Tax Terms Explained

Dealing with an IRS tax audit or notification can be overwhelming, especially when it comes to cryptocurrency taxation. To help you understand tax audits, IRS notices, and defense strategies related to cryptocurrency taxation. It's perfect for beginners and experienced crypto enthusiasts to understand tax-related matters easily.

1099 Forms: A series of tax forms used by the IRS to report various types of income other than wages, salaries, and tips. Each document in the 1099 series reports different kinds of income.


1099-B: This form reports proceeds from broker and barter exchange transactions. It covers the sale of stocks, bonds, mutual funds, and other securities, detailing the gains or losses incurred necessary for capital gains tax calculations.


1099-DA (Digital Assets): Though yet to be finalized, this anticipated form is expected to be used for reporting transactions involving digital assets, such as cryptocurrencies. It will likely detail gains, losses, and other income from crypto-related activities, aligning with the IRS's increasing focus on digital asset taxation.


1099-DIV: This form reports dividends and distributions received during the year. It includes information on qualified dividends, total capital gains, federal income tax withheld, and foreign taxes paid, which are crucial for accurate tax reporting on investment income.


1099-INT: Used for reporting interest income, this form details the amount of interest, typically from banks or financial institutions, earned during the tax year. It includes taxable and tax-exempt interest, aiding in accurately reporting income from interest.


1099-K: This form reports payment card and third-party network transactions. It's issued by payment settlement entities to report payments received through card transactions or third-party payment networks, often used by freelancers, small business owners, and those engaged in e-commerce.


1099-MISC: This versatile form reports various types of miscellaneous income, such as rents, royalties, medical and health care payments, crop insurance proceeds, cash payments for fish, and payments to an attorney. It's a catch-all for income that doesn't fit other 1099 categories.


51% Attack: This term refers to a situation in cryptocurrency networks where a single entity or group gains control of more than 50% of the network's mining power or hash rate. This dominance allows them to manipulate the blockchain by double-spending coins or preventing new transactions from being confirmed.

Abatement of Penalties: In tax terminology, this refers to the reduction or elimination of penalties imposed by the IRS for reasons such as failing to file or pay taxes on time. Taxpayers can request a reduction if they have reasonable cause, such as natural disasters, serious illness, or undue hardship.


Accountable Plan: Reimbursement or allowance arrangement that meets IRS criteria for tax-free treatment. It requires that business expenses be substantiated within a reasonable time and any excess advance be returned in a timely manner. This plan prevents reimbursements from being taxed as income.


Adjusted Basis: This is the original cost of a property (like stocks, bonds, or real estate) for tax purposes, adjusted for factors such as depreciation, improvements, or damages. It is used to calculate capital gains or losses when the property is sold or disposed of.


Adjusted Gross Income (AGI): This key tax term represents an individual's total gross income minus specific deductions, such as student loan interest, alimony payments, or contributions to a retirement account. AGI is crucial in determining eligibility for various tax credits and deductions.


Adjustment to Income: These are specific deductions that reduce your gross income to arrive at your AGI. Unlike itemized deductions, adjustments to income can be made even if a taxpayer takes the standard deduction. Common examples include educator expenses, student loan interest, and contributions to retirement accounts.


Airdrop: In cryptocurrency, an airdrop refers to the free distribution of new coins or tokens directly into the digital wallets of existing holders of a specific blockchain currency. Often used as a promotional or reward mechanism, airdrops are also a way for new cryptocurrencies to gain attention and holders.


Algorithm: In the context of cryptocurrencies, an algorithm is a set of mathematical rules and procedures that dictate how a particular cryptocurrency functions. This includes how transactions are processed and verified and how new coins are created or mined. Each cryptocurrency operates on its own unique algorithm.


All-Time High (ATH): In the context of financial markets, including cryptocurrencies, this term refers to the highest price ever reached by a security, index, or cryptocurrency. For individual cryptocurrencies, tracking the ATH is important for understanding market sentiment and historical performance.


Alpha: In finance, alpha is a measure of an investment's performance relative to a benchmark index. It represents the excess return of an investment compared to the return of a benchmark index. A positive alpha indicates outperformance, while a negative alpha indicates underperformance.


Altcoin: Short for "alternative coin," this term refers to any cryptocurrency other than Bitcoin. Altcoins often present as improved or modified versions of Bitcoin with different underlying algorithms, features, or capabilities.


Alternative Minimum Tax (AMT): A parallel tax system designed to ensure that certain taxpayers pay at least a minimum amount of tax. AMT recalculates income tax after adding certain tax preference items back into adjusted gross income. It is designed to prevent high-income taxpayers from using special tax benefits to pay little or no tax.


Amended Tax Return: This is a form filed in order to make corrections to a previously filed tax return. Taxpayers may need to amend a return to report additional income, correct reported income or deductions, or change filing status, among other reasons.


Amount Due: This refers to the total amount of tax, penalties, and interest that a taxpayer owes to the IRS or a state tax authority. It is the balance owed after subtracting credits and payments made against the total tax liability.


Anti Money Laundering (AML): These are regulations, laws, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. In the context of cryptocurrency, AML measures are increasingly important as digital currencies can be used to circumvent traditional financial systems.


Appeal: In tax terminology, this is the process by which a taxpayer disputes an IRS decision or action. The taxpayer can request an independent review of the case if they disagree with the IRS’s findings or penalties.


Appeals Officer (AO): This is an IRS employee who handles appeals from taxpayers disputing IRS decisions. The Appeals Officer reviews cases, conducts hearings, and aims to settle disputes between the IRS and taxpayers in an unbiased and independent manner.


Application Programming Interface (API): An API is a set of protocols and tools for building software and applications. In the context of finance and cryptocurrencies, it allows different software systems to communicate with each other, enabling tasks like price checks, automated trading, and access to real-time financial data.


Application-Specific Integrated Circuit (ASIC): This is a type of integrated circuit chip designed for a very specific purpose. In the world of cryptocurrency, ASICs are used for efficient and effective mining, as they are specifically designed to process the cryptographic algorithms used in mining certain cryptocurrencies.


Arbitrage: In finance, arbitrage involves buying and selling an asset simultaneously in different markets to profit from price differences. In the cryptocurrency market, traders exploit price differences across exchanges to earn a profit.


Artificial Intelligence (AI): AI refers to the simulation of human intelligence in machines programmed to think and learn like humans. In the context of finance, AI can be used for a variety of purposes, including predictive analysis, automated trading systems, fraud detection, and customer service.


Ask Price: This is the minimum price that a seller is willing to accept for an asset. In the stock and cryptocurrency markets, it refers to the lowest price a seller is willing to accept for stock, currency, or crypto coin.


Assessment: In taxation, an assessment is the determination of the amount of tax owed. An assessment can occur when a tax return is filed or following an audit where the IRS recalculates the tax based on findings.


Atomic Swap: This term refers to a technology that enables the exchange of one cryptocurrency for another without the need for a trusted third party or centralized exchange. Atomic swaps can be done directly between separate blockchains and are considered a key advancement in the field of decentralized finance.


Audit: In a tax context, an audit is a review of a taxpayer's accounts and financial information to ensure that information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.


Audit Letter: This is a letter from the IRS or other tax authorities notifying a taxpayer that their tax return is being examined or audited. The letter typically explains the reasons for the audit and the documents required for review.


Audit Reconsideration: This is a process in the United States where a taxpayer can request the IRS to reevaluate the results of a prior audit in which they have new information or documentation that was not considered during the original audit.


Audit Representation: Also known as tax representation, this involves a tax professional representing a taxpayer during an IRS audit. Professionals such as CPAs, attorneys, or enrolled agents use their knowledge of tax law to advocate on behalf of the taxpayer.


Automated Market Maker (AMM): An AMM is a type of decentralized exchange protocol that relies on a mathematical formula to price assets instead of using an order book like traditional exchanges. In the context of cryptocurrencies, it allows digital assets to be traded automatically by using liquidity pools rather than a traditional market of buyers and sellers.


Automated Under Reporter (AUR): This is an IRS program that matches information reported by taxpayers on their tax returns with information reported by third parties, like employers or financial institutions. If discrepancies are found, the AUR program flags these for potential underreporting of income.

Back Taxes: This term refers to taxes that were owed in a previous year but were not paid. Back taxes can accrue interest and penalties, and dealing with them often requires navigating complex IRS processes.


Bags: In cryptocurrency slang, "bags" refer to large quantities of a specific cryptocurrency or token that an investor is holding. The term is often used in the context of holding an asset through periods of volatility in the hope of future profit.


Bankruptcy: A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (or on behalf of creditors) and results in the evaluation of the debtor's assets and liabilities.


Basis: In tax terms, basis refers to the amount of investment in something for tax purposes. For assets, it typically includes the purchase price plus any fees or commissions. It's used to calculate capital gains or losses when the asset is sold.


Beacon Chain: In the context of Ethereum, a cryptocurrency and blockchain platform, the Beacon Chain refers to a part of its major upgrade (Ethereum 2.0). It introduces proof-of-stake to the network, a more energy-efficient consensus mechanism than the previous proof-of-work system.


Bear Market: A term used in investing to describe a market condition in which prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. In a bear market, investors may anticipate losses as pessimism and selling increase.


Benchmark: In finance and investing, a benchmark is a standard or point of reference against which the performance of a security, mutual fund, investment manager, or investment strategy can be measured. For instance, stock market indexes like the S&P 500 are often used as benchmarks for assessing the performance of an investment portfolio.


BEP-2: This is a token standard on Binance Chain, the blockchain developed by the Binance cryptocurrency exchange. BEP-2 tokens are designed to provide a consistent set of rules and requirements for issuing tokens on the Binance Chain network, ensuring compatibility and ease of use.


BEP-20: A token standard for Binance Smart Chain (BSC), which is a parallel blockchain to Binance Chain. BEP-20 extends ERC-20, the most common Ethereum token standard, and is compatible with both Binance Chain and Binance Smart Chain, providing flexibility and functionality for token development.


BEP-721: A token standard used on Binance Smart Chain for NFTs, similar to the ERC-721 standard on Ethereum. It allows for the creation of unique tokens, each with distinct attributes and properties, commonly used in digital art, collectibles, and gaming.


BEP-95: This is a proposal on Binance Smart Chain aimed at implementing a real-time burning mechanism for a portion of gas fees. It's designed to reduce the overall supply of the native BSC token (BNB), potentially increasing its scarcity and value.


Beta: In finance, beta is a measure of the volatility—or systematic risk—of a security or a portfolio compared to the whole market. A beta greater than one indicates that the security's price is theoretically more volatile than the market.


Bid Price: The bid price is the highest price that a buyer is willing to pay for an asset in the financial markets. In the context of the stock and cryptocurrency markets, it's the opposite of the ask price, the lowest price a seller is willing to accept.


Bid-Ask Spread: This term refers to the difference between the bid price and the ask price in the market for an asset. It represents the cost of trading and is a crucial indicator of the liquidity and efficiency of the market.


Bitcoin: The first and most well-known cryptocurrency, Bitcoin, was created in 2009 by an unknown person (or persons) using the pseudonym Satoshi Nakamoto. It operates on a decentralized network of computers and was established as an alternative to traditional currencies controlled by governments and central banks.


Bitcoin Core: Bitcoin Core refers to the open-source software that is used to participate in the Bitcoin network, especially as a full node. It is essential for validating transactions and blocks on the Bitcoin blockchain.


Bitcoin Dominance: This is a metric that measures Bitcoin's market capitalization relative to the total market cap of all cryptocurrencies. It is used to gauge Bitcoin's market share and is an indicator of its market strength and influence.


Bitcoin Maximalists: This term refers to people who believe that Bitcoin, among all cryptocurrencies, is superior and will ultimately be the most widely used and dominant digital currency. They often argue that other cryptocurrencies are unnecessary or inferior to Bitcoin.


Bitcoin Pizza: Referring to a famous event in the early history of Bitcoin, where on May 22, 2010, a programmer named Laszlo Hanyecz bought two pizzas for 10,000 Bitcoins. This purchase is celebrated as 'Bitcoin Pizza Day' and is notable for being one of the first real-world transactions using Bitcoin.


Black Swan Event: A term used in finance to describe an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black Swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.


Block: In the context of blockchain technology, a block is a digital record of transactions. Each block contains a list of transactions and is linked to the previous block, forming a chain of blocks, hence the term "blockchain."


Block Explorer: A block explorer is an online tool to view all transactions, past and current, on a blockchain. It provides information such as transaction growth, network hashing power, and transaction history of a specific blockchain in a user-friendly manner.


Block Header: In blockchain technology, a block header is a portion of a block that includes essential metadata about the block. It contains references to the previous block (thus creating the chain), a timestamp, and other critical information used in the blockchain's functioning.


Block Height: The term refers to the number of blocks connected in the blockchain. Specifically, it's the position of a particular block in the entire blockchain. The first block, or genesis block, is at height 0.


Block Reward: This is the incentive given to blockchain miners for successfully validating a new block and adding it to the blockchain. The reward typically consists of newly created cryptocurrency and transaction fees.


Blockchain: A decentralized, distributed ledger technology that records transactions across many computers so that the recorded transactions cannot be altered retroactively. It underpins various cryptocurrencies and has applications in various fields like finance, supply chain, and healthcare.


Blockchain Address: In the realm of cryptocurrencies, an address is a unique string of characters that represents a destination for a cryptocurrency transfer. Similar to a bank account number, it is used to receive and send digital currency transactions on the network.


Blue-Chip Token: Similar to blue-chip stocks in traditional finance, these are cryptocurrencies that are considered relatively safer investments with a history of performance and a larger market capitalization. They are generally well-established within the cryptocurrency market.


Bollinger Bands: A technical analysis tool defined by a set of lines plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of a security's price. Bollinger Bands can help identify market volatility and price trends.


Bond: A fixed-income instrument representing a loan made by an investor to a borrower. It is a way for companies or governments to raise funds by borrowing from investors.



Bonus Depreciation: In tax, this refers to an additional amount of depreciation that can be claimed by a taxpayer for the cost of qualifying property in the year it is put into service. It is typically used to incentivize investment in new or improved business assets.


Bounty: In the context of cryptocurrencies, a bounty is a reward offered to incentivize certain tasks performed by users, developers, or members of the community. These tasks can range from software development to marketing activities.


BRC-20 Tokens: This term likely refers to a standard for issuing tokens, similar to Ethereum's ERC-20 standard, but it's not widely recognized or established. If you meant "BEP-20" for Binance Smart Chain or "ERC-20" for Ethereum, these are well-established standards for creating and issuing tokens on their blockchains.


Breakout: In financial markets, a breakout refers to a security's price moving outside a defined support or resistance level with increased volume. A breakout can be upward or downward and is often considered a signal for traders to enter a position in the direction of the breakout.


Bull Market: This term describes a financial market in which prices are rising or are expected to rise. The term is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.


Burden of Proof: In the context of taxation, this refers to the obligation to prove entries, deductions, and statements made on tax returns. In an audit, the burden of proof is usually on the taxpayer to substantiate the validity of their tax claims.


Business Income: This is the income that is received from the operation of a business or other enterprise. It typically includes payments received for goods or services, and it may be reduced by business expenses and deductions to determine taxable income.


C Corporation (C Corp): A C Corporation is a business entity in which the owners, or shareholders, are taxed separately from the entity, and their liability is limited to capital contributed to the corporation. C Corps are subject to corporate income tax and can also be subject to double taxation if corporate profits are distributed to shareholders through dividends.



Calls: In options trading, a call option is a financial contract that gives the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.


Candidate Block: In cryptocurrency mining, a candidate block is a potential block that miners work to add to the blockchain. It contains transactions that are yet to be confirmed and a solution to a cryptographic puzzle. Successfully solving this puzzle allows the miner to add the candidate block to the blockchain.


Candlestick: A candlestick is a type of price chart used in technical analysis that displays the high, low, opening, and closing prices of a security for a specific period. Originating from Japan, candlesticks are a popular tool among traders for identifying market trends and patterns.


Capital Asset: In taxation, a capital asset is any kind of property held by an individual or a business, regardless of whether it's connected to the business's activity. This includes stocks, bonds, homes, and cars. The gain or loss from its sale or exchange is considered a capital gain or loss for tax purposes.


Capital Gain: A capital gain is the profit realized when a capital asset is sold for a price higher than the purchase price. Capital gains are subject to capital gains tax, which can vary based on how long the asset was held before being sold.


Capital Loss: This occurs when a capital asset is sold for less than its purchase price. Capital losses can offset capital gains and reduce taxable income, subject to certain rules and limits.




Capitalization Rules: In accounting, these rules determine whether a cost is a current expense or a capital expense. Costs that are expected to benefit the business for more than one year are usually capitalized, meaning they are depreciated or amortized over multiple years.


Capitulation: In financial markets, capitulation refers to the point when investors give up any previous gains in any security or market by selling their positions during declining prices. It is often seen as a sign of panic selling and can indicate a market bottom.


Carryback: A tax provision that allows a business or individual to apply a current year’s net operating losses to previous years' tax returns. This results in a tax refund, as the taxpayer effectively pays less tax in the past due to the current loss.


Carryforward: Opposite of carryback, this allows businesses or individuals to use a current year’s net operating losses to reduce taxable income in future years. This is particularly useful in smoothing out earnings and tax liabilities over time.


Central Bank: A central bank is a national bank that provides financial and banking services for its country's government and commercial banking system, as well as implements the government’s monetary policy and issues currency.


Central Bank Digital Currency (CBDC): This is a digital form of a country's fiat currency issued and regulated by the nation's central bank. CBDCs are electronic records or digital tokens of the official currency intended to replace or complement traditional physical currency.


Centralized: In the context of finance and cryptocurrencies, this term refers to systems or structures where a single entity or a group of entities maintains control. This contrasts with decentralized systems, where control is distributed among many users or nodes.


Centralized Exchange (CEX): A centralized exchange in the cryptocurrency world is an exchange that is operated by a company that owns and manages it. These exchanges serve as a third-party between buyers and sellers and are responsible for maintaining the exchange’s liquidity and security.


CeFi (Centralized Finance): Refers to the traditional finance system where services are offered through centralized institutions such as banks and regulated financial entities.



Certified Public Accountant (CPA): A CPA is a professional accountant who has met certain educational and licensing requirements and passed the CPA exam. They are able to offer a range of services, including auditing, tax preparation, and financial planning.



Chad: In internet slang, a "Chad" typically refers to an individual characterized by confidence and assertiveness, often exaggerated. In trading contexts, it implies boldness in investment decisions.



Charitable Giving: This refers to the act of donating money, goods, or time to charitable organizations or causes. Charitable giving can often be tax-deductible, reducing the taxable income of the donor.


Charity (Recognized): A recognized charity refers to a nonprofit organization that is officially acknowledged by the government or relevant authorities, allowing it to receive tax-deductible charitable contributions and offer tax receipts to donors.


Circulating Supply: This refers to the number of coins or tokens that are publicly available and circulating in the market. It is different from total supply, which includes coins that are not yet available for public use.


Circuit Court: Courts below the Supreme Court in the United States, these courts are the regional appellate courts in the federal court system that review decisions of the district courts within their circuit.


Coin: In cryptocurrency, a coin is a digital asset that is native to its own blockchain, like Bitcoin or Ethereum. This differentiates it from a token, which is a digital asset built on another blockchain.


Collateral: Collateral refers to an asset that a borrower offers to a lender as security for a loan. If the borrower fails to repay the loan, the lender has the right to seize the collateral to recoup their losses.


Combined 1099: This is a consolidated tax form that includes all of the various types of income a person might receive other than a salary. It combines information from forms 1099-INT, 1099-DIV, 1099-B, and other 1099 forms into one document.


Commodity Futures Trading Commission (CFTC): The CFTC is a U.S. federal agency that regulates the U.S. derivatives markets, which include futures, swaps, and certain kinds of options.


Community Property: In certain states, this form of joint property ownership is considered standard between married couples. It means that most property acquired during the marriage is owned jointly by both spouses and is divided upon divorce, annulment, or death.


Compound Interest: This is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.


Computer Paragraph: This term is often used in the context of IRS notices and refers to a standardized explanation or description embedded in automated IRS notices or letters.


Confirmation Time: In cryptocurrencies, this is the time it takes for a transaction to be confirmed or verified on the blockchain. This time can vary based on the network’s traffic and the transaction fees paid.



Congress: The national legislative body of the United States, consisting of two chambers: the House of Representatives and the Senate.



Constructive Receipt: A tax concept implying that income is taxable when made available to a taxpayer, even if not physically in their possession. For example, a check received but not cashed is still considered income at the time of receipt.


Consumer Price Index (CPI): The CPI is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is used as an economic indicator to assess changes in the cost of living.


Correspondence Audit: This is a type of tax audit conducted by mail. The IRS sends a request for more information about certain parts of a tax return, and the taxpayer must respond with the necessary documentation.


Correspondence Examination: Similar to a correspondence audit, this is an examination of a taxpayer's return conducted by mail. It typically involves clarification or more information regarding specific items on the tax return.


Cost Segregation Study: This is a strategic tax planning tool that allows companies and individuals to increase their cash flow by accelerating depreciation deductions and deferring federal and state income taxes.


Counterparty Risk: This is the risk that the other party in an investment, trading, or financial transaction may not fulfill their obligations. In the context of cryptocurrencies, it refers to the risk that the individual or entity with whom you are transacting may default or fail.


Collection Process (CP): In the context of the IRS, "CP" usually refers to notices issued as part of the Collection Process. These notices, such as CP501 or CP503, inform taxpayers about a balance due and request payment or contact with the IRS.




Credit: In financial terms, credit refers to an agreement in which a borrower receives something of value now and agrees to repay the lender at a later date, generally with interest. In taxation, a credit is an amount that can be used to offset taxes owed.


Cross-Chain Bridges: In cryptocurrency, cross-chain bridges refer to technologies that allow for the transfer of assets and information between different blockchain networks. This enables interoperability and the ability to conduct transactions across various blockchains.


Crypto ETFs (Exchange-Traded Funds): These are exchange-traded funds that aim to track the performance of cryptocurrencies or a basket of different digital assets. They allow investors to invest in cryptocurrencies without purchasing and holding the assets directly.


Crypto Protocol: This is a set of rules that defines how data is transmitted and exchanged on a cryptocurrency network. Protocols are essential in governing the functioning of the underlying blockchain and ensuring secure and efficient transactions.


Crypto Winter: A term used to describe a prolonged period of stagnant or declining prices in the cryptocurrency market. It's similar to a bear market in traditional finance and can reflect widespread pessimism in the crypto industry.


Cryptocurrency: A digital or virtual currency that uses cryptography for security and operates on a decentralized system using blockchain technology, allowing for secure, transparent, and immutable transactions.



Cryptography: This is the practice and study of techniques for secure communication in the presence of third parties. In the context of cryptocurrencies, cryptography is used to secure transactions and control the creation of new units.


Custody: In the financial industry, custody refers to the holding and safety of financial assets by a financial institution. In cryptocurrencies, custody solutions refer to services that hold and protect the cryptographic keys to a user's cryptocurrency assets.

Danksharding: A term specific to the Ethereum blockchain, referring to a planned upgrade that aims to improve the network's scalability and transaction throughput. It's a form of sharding that includes various technical improvements.

Dead Cat Bounce: A term used in financial markets to describe a temporary recovery from a prolonged decline or a bear market, after which the market continues to decline.

Decentralized Application (DApp): A DApp is an application that runs on a decentralized network, avoiding a single point of failure. DApps are typically built on blockchain technology and are a key part of the DeFi (Decentralized Finance) movement.

Decentralized Autonomous Organization (DAO): A DAO is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members, and not influenced by a central government. DAOs are a form of investor-directed venture capital fund.

Decentralized Exchange (DEX): A DEX is a cryptocurrency exchange that operates without a central authority, allowing for direct peer-to-peer cryptocurrency transactions to take place online securely and without the need for an intermediary.

Decentralized Finance (DeFi): DeFi refers to financial services, including lending, borrowing, and trading, that are conducted on blockchain networks without the need for traditional financial intermediaries like banks. DeFi platforms aim to recreate traditional financial systems, such as banks and exchanges, with cryptocurrency.

Decision Documents: In the context of tax audits and disputes, decision documents are formal papers prepared by the IRS or a tax court summarizing the decision regarding the taxpayer’s case. They include conclusions on issues, amounts involved, and a summary of findings.

Deduction: A tax deduction reduces taxable income. It's subtracted from gross income when calculating taxable income. Deductions can be specific expenses incurred, such as business expenses or standardized amounts provided by tax law.

Degen: Short for "degenerate," in the cryptocurrency community, this term describes traders who take extremely high risks, often investing in highly speculative assets or engaging in risky trading strategies in the hope of high returns.

Delisting: In the context of stock and cryptocurrency exchanges, delisting refers to the removal of a security or asset from the exchange. This can occur for various reasons, including regulatory issues, bankruptcy, or failure to meet financial standards.

Department of the Treasury: This is a U.S. government department responsible for managing federal finances, producing currency, collecting taxes, and administering federal finances. The IRS is a bureau within the Treasury Department.

Depeg: In finance, particularly with cryptocurrencies, this term refers to a situation where a stablecoin or other asset loses its intended parity with another asset, like a fiat currency or commodity. This can occur due to market pressures or loss of confidence in the asset.

Dependent: For tax purposes, a dependent is someone who entitles the taxpayer to claim dependent-related tax benefits like head of household filing status, child tax credits, and certain other deductions and credits.

Depletion: In tax terms, depletion is the use of natural resources by mining, quarrying, drilling, or felling. Regarding tax deductions, companies involved in natural resource extraction can use depletion as a form of depreciation.

Depreciation: This is an accounting method of allocating the cost of a tangible asset over its useful life. In tax, it allows a business to deduct a portion of the cost of an asset each year over the asset's lifespan.

Desk Audit: A desk audit is an examination of a taxpayer’s return conducted from the IRS office, often involving clarification or additional information regarding certain items on the tax return, but less comprehensive than a field audit.

Diamond Hands: A slang term popular in the cryptocurrency and investment communities, referring to an investor who holds on to their investments steadfastly, even in the face of market fluctuations and losses, showing a high level of resilience and conviction.

Difficulty: In cryptocurrency mining, difficulty is a measure of how hard it is to mine a new block on the blockchain. As more miners join the network and/or the technology improves, the difficulty adjusts to ensure that the rate of new block creation remains consistent.

Disregarded Entity: This is a business entity that is not separated from its owner for federal income tax purposes. The entity's income, losses, and deductions are reported on the owner's personal tax return. A common example is a single-member LLC.

District Court: The general trial courts in the U.S. federal court system, where civil and criminal cases are heard and tried.

Divergence: In technical analysis of financial markets, divergence occurs when the price of an asset and a related indicator (like an oscillator) move in opposite directions. It can indicate potential bullish or bearish market moves.

Diversification: This is an investment strategy that involves spreading investments across various financial instruments, industries, and other categories to reduce exposure to any one particular asset or risk. Diversification can help mitigate risk in a portfolio.

Do Your Own Research (DYOR): A common phrase in the investment and cryptocurrency communities, encouraging individuals to conduct thorough research and gain a comprehensive understanding of an investment before committing funds.

Dollar Cost Averaging (DCA): An investment strategy where an investor divides up the total amount to be invested across periodic purchases of a target asset in an effort to reduce the impact of volatility on the overall purchase. The purchases occur at regular intervals regardless of the asset's price.

Donation: Refers to a gift given by physical or legal persons, typically for charitable purposes and/or to benefit a cause. Donations are often tax-deductible for the donor.

Double Spending: In digital currency, there is a risk that a digital currency can be spent twice. It is a potential problem unique to digital currencies because digital information can be reproduced relatively easily. Cryptocurrencies use various mechanisms to prevent double-spending.

Due Date: In the context of taxation, this is the deadline for filing tax returns or making tax payments. Different types of taxes have different due dates, and these can vary by jurisdiction.

Eclipse Attack: In the context of computer networks and cryptocurrencies, this is a type of cyberattack where a network node is isolated by overtaking all of its connections to other nodes. This can potentially disrupt network functionality and compromise security.

Economic Substance Doctrine: A principle in U.S. tax law where transactions must have economic significance other than mere tax benefits to be considered valid for tax purposes. This doctrine prevents taxpayers from using legally correct but economically meaningless transactions to avoid taxes.

Employed: This refers to a person who works part-time or full-time under a contract of employment, whether oral or written, expressed or implied, and who has recognized rights and duties. Employed individuals typically receive regular payment from an employer.

Employee Business Expenses (EBE): These are expenses that an employee incurs in the course of performing their job. Under the Tax Cuts and Jobs Act of 2017, most of these expenses are no longer deductible on federal tax returns for 2018 through 2025.

Enrolled Agent (EA): An enrolled agent is a tax advisor who is a federally authorized tax practitioner empowered by the U.S. Department of the Treasury. EAs are authorized to represent taxpayers before the Internal Revenue Service for tax issues, including audits, collections, and appeals.

Equities: Also known as stocks or shares, equities represent ownership interests in corporations. Investors who hold equities have rights to a portion of the company's assets and earnings.

ERC-1155: This is a token standard on the Ethereum blockchain. Unlike its predecessors, ERC-1155 allows for the creation of both fungible (currencies) and non-fungible tokens (like digital art) within a single contract. This multifunctionality provides increased efficiency and lower transaction costs.

ERC-20: ERC-20 is a standard used for creating and issuing smart contracts and tokens on the Ethereum blockchain. Many projects that launch on the Ethereum blockchain start out as ERC-20 tokens due to the ease of development and later on, migrate to native blockchains.

ERC-721: A token standard for NFTs on the Ethereum blockchain. Unlike ERC-20 tokens, ERC-721 tokens are unique and can represent different values and properties. They are commonly used for digital art, collectibles, and other unique digital items.

Estimated Tax Payments: These are periodic payments made towards expected tax liability for the year, typically by those who do not have taxes withheld from their earnings, such as self-employed individuals or investors. These payments are made quarterly in the U.S., and help avoid underpayment penalties.

ETF (Exchange-Traded Fund): An ETF is a type of investment fund and exchange-traded product, i.e., they are traded on stock exchanges. ETFs are similar to mutual funds but are listed on exchanges, and ETF shares trade throughout the day just like ordinary stock.

Ethereum: A decentralized, open-source blockchain system that features smart contract functionality. Ethereum is the blockchain on which Ether (ETH), its native cryptocurrency, is traded. It's known for its versatility and ability to execute complex operations, making it a popular platform for decentralized applications.

Ethereum Classic: This is a continuation of the original Ethereum blockchain following a split, or "hard fork," in 2016. The fork was in response to a major hack, and Ethereum Classic runs the original blockchain, maintaining the untampered history free from external interference.

Ethereum Virtual Machine (EVM): The EVM is the runtime environment for smart contracts in Ethereum. It's a powerful, sandboxed virtual stack embedded within each full Ethereum node, responsible for executing contract bytecode. Contracts are written in high-level languages, like Solidity, then compiled to EVM bytecode.

Examination: In the context of taxation, an examination (or audit) is the review of a taxpayer's accounts and financial information by the IRS or other tax authorities to ensure that income and expenses are reported accurately and comply with tax laws.

Exchange: This term has multiple meanings. In finance, it refers to a marketplace where securities, commodities, derivatives, and other financial instruments are traded. In cryptocurrency, a crypto exchange is a platform where digital currencies are traded.

Excise Taxes: These are taxes paid when purchases are made on a specific good, such as gasoline or tobacco. Excise taxes are often included in the price of the product and may also be levied on activities, such as wagering or on highway usage by trucks.

Fakeout: In trading, a fakeout is a false breakout that occurs when the price of a security or an index briefly moves above a resistance level or below a support level but then reverts, misleading traders who acted on the breakout signal.

Falling Knife: A term used in the investment world to describe a rapidly declining stock or market. The phrase implies danger in attempting to 'catch' the stock, as one might get hurt, similar to catching a literal falling knife.

Fan Tokens: These types of cryptocurrency allow holders to vote on mostly minor decisions related to their clubs. Popular in sports franchises, these tokens provide a new way to engage with a favorite team, offering fans some influence and access to exclusive experiences.

Fear Of Missing Out (FOMO): FOMO refers to the anxious feeling investors get of missing out on a potentially profitable investment or trading opportunity in finance and investing. It can often lead to making hasty decisions without thorough analysis.

Fear, Uncertainty, and Doubt (FUD): A term used to describe a strategy of spreading harmful, misleading, or false information about something, thereby creating a sentiment of fear and uncertainty among investors or the public.

Fiat: In finance, fiat money is a currency not backed by any physical commodity but rather by the government that issued it. Unlike cryptocurrencies or gold-backed money, its value is derived from the relationship between supply and demand.

FICA Taxes: These are taxes levied on both employees and employers to fund Social Security and Medicare in the United States. FICA stands for Federal Insurance Contributions Act and represents a payroll tax that is deducted from an employee's paycheck.

Field Audit: A more comprehensive type of tax audit conducted by the IRS. Unlike a desk audit, a field audit involves an IRS agent visiting the taxpayer's place of business or home to examine records and conduct a thorough investigation into the taxpayer’s financial affairs.

Filing Status: In tax terms, this refers to a category that defines the type of tax return form a taxpayer must use. Filing status is influenced by marital status and family situation and determines the rate at which income is taxed.

Finality: In blockchain technology, finality refers to the point at which transactions are considered irreversible and permanently part of the blockchain. Once achieved, a transaction cannot be altered, reversed, or canceled.

First Notice: This typically refers to the initial correspondence sent by the IRS or other tax authorities to a taxpayer, indicating a discrepancy or issue with a tax return that needs to be addressed or resolved.

Fiscal Policy: This government policy influences an economy by adjusting spending levels and tax rates. Fiscal policy is used to manage economic cycles, control inflation, stimulate economic growth, or reduce unemployment.

Fiscal Tax Year: In taxation, a fiscal tax year is any 12-month period that ends on the last day of any month other than December. Corporations, partnerships, and other entities can choose a fiscal tax year instead of a calendar tax year.

Flippening: A term used in the cryptocurrency community to refer to the hypothetical moment when Ethereum (ETH) overtakes Bitcoin (BTC) as the biggest cryptocurrency by market capitalization.

Foreign Tax Credit: A nonrefundable tax credit for income taxes paid to a foreign government as a result of foreign income tax withholdings. The foreign tax credit is available to anyone who either works in a foreign country or has investment income from a foreign source.

Forex (FX): Short for foreign exchange, Forex is the market in which currencies are traded. It's the largest and most liquid market in the world, with trillions of dollars traded daily.

Fork: In cryptocurrency, a fork occurs when there is a change to the software of a digital currency that creates two separate versions of the blockchain with a shared history. A fork can be 'hard,' creating a new currency, or 'soft,' resulting in a new version of the cryptocurrency.

Form: In the context of taxation, a form is an official document used for filing or reporting financial information. The IRS and other tax authorities provide various forms for different tax-related purposes.

Full Node: In a blockchain network, a full node is a computer that fully enforces all the rules of the blockchain. It maintains a complete and up-to-date copy of the blockchain and participates in validating transactions and blocks.

Fundamental Analysis (FA): This is a method of measuring a security's intrinsic value by examining related economic and financial factors. In the context of stocks, FA looks at conditions like a company's earnings and expenses; in crypto, it may involve the underlying technology and user adoption.

Fundamentals: In finance and investing, fundamentals refer to the basic financial and economic factors that influence the value of an asset, such as earnings, revenue, profit margins, and growth potential.

Fungibility: Fungibility is the property of a good or asset where each unit is interchangeable and indistinguishable from another of the same asset. For example, one dollar is fungible with another dollar, and one Bitcoin is fungible with another Bitcoin.

FUTA Taxes: The Federal Unemployment Tax Act (FUTA) is a payroll tax paid by employers to fund the federal government's unemployment account, which provides funds to states for unemployment benefits.

Futures Contract: A futures contract is a standardized legal agreement to buy or sell a specific commodity or financial instrument at a predetermined price at a specified time. Futures are used for hedging or investment purposes.

GameFi: A portmanteau of "game" and "finance," GameFi refers to the intersection of blockchain-based gaming and DeFi. These are often play-to-earn games where players can earn cryptocurrency or NFTs, which have real-world value.

Gas: In Ethereum and other blockchains, gas refers to the fee required to conduct a transaction or execute a smart contract successfully. This fee compensates for the computing energy required to process and validate transactions on the blockchain.

Gas Limit: The maximum amount of gas a user is willing to spend on a transaction in the Ethereum network. Setting a gas limit helps to ensure that users don't pay more than they are willing for a transaction to be processed.

Genesis Block: The very first block in a blockchain. In the context of Bitcoin, the genesis block was mined by its creator, Satoshi Nakamoto. It has a symbolic importance as the starting point of the respective blockchain.

GM (Good Morning): Commonly used in online communities, including cryptocurrency forums and social media, "GM" is a friendly expression of greeting and community bonding, often reflecting a positive and inclusive culture within these groups.

Golden Cross: A technical analysis term describing a condition where a shorter-term moving average crosses above a longer-term moving average, often signaling a potential bullish movement in the market.

Gwei: The most commonly used unit of ether (ETH), the cryptocurrency of the Ethereum network. One gwei is equivalent to 0.000000001 ETH. It's mainly used to measure transaction fees.

Hard Fork: A significant change to a blockchain's protocol, creating a permanent divergence from the previous version of the blockchain, often resulting in a new chain and a new coin.

Halving: This event occurs when the reward for mining new Bitcoin blocks is halved, thereby reducing the rate at which new coins are created. This occurs approximately every four years for Bitcoin, and it is programmed into the algorithm.

Hash: A function that converts an input of letters and numbers into an encrypted output of a fixed length. In cryptocurrencies, a hash is used to secure transactions and control the creation of new coins.

Hash Rate: The measure of computational power per second used when mining. A higher hash rate increases the chances of finding the next block and receiving the mining reward.

High-Frequency Trading (HFT): This is a type of financial trading that uses powerful computer programs to transact a large number of orders at extremely high speeds. It uses complex algorithms to analyze multiple markets and execute orders based on market conditions.

Hobby: In tax terms, a hobby is an activity not pursued for profit. Hobby expenses cannot be deducted like business expenses, and hobby income is taxed differently than business income.

HODL: Originating from a misspelling of "hold," HODL has become a term used in the cryptocurrency community to describe a strategy of holding onto a cryptocurrency rather than selling it, typically through periods of volatility.

House of Representatives: The lower chamber of the United States Congress, made up of representatives elected from each U.S. state, with representation based on the state's population.

House Ways and Means Committee: A committee of the U.S. House of Representatives responsible for taxation, tariffs, and other revenue-raising measures.

Immutability: In blockchain technology, immutability refers to the characteristic that once data has been recorded in a blockchain, it cannot be altered or deleted. This feature is fundamental to the trustworthiness and security of blockchain networks.

In-Kind Contributions: These are donations of goods or services, rather than money, to a nonprofit organization or charity. In-kind contributions include food, clothing, services, or time.

Income Tax: A tax governments impose on income generated by businesses and individuals within their jurisdiction. Income tax rates can be flat or vary based on income level, and they are a primary source of funds for most government budgets.

Index: In finance, an index is a statistical measure of change in a securities market. Stock and bond market indices consist of a hypothetical portfolio of securities representing a particular market or a segment of it.

Information Document Request (IDR): This is a formal request by the IRS or other tax authorities during an audit for additional information and documents from the taxpayer to support their tax return positions.

Initial Coin Offering (ICO): An ICO is a fundraising method used primarily by startups wishing to offer products and services, usually related to the cryptocurrency and blockchain space. ICOs sell a new digital currency at a discount — or a “token” — as a way to raise money.

Initial Exchange Offering (IEO): Similar to an ICO, an IEO is a fundraising event that is administered by an exchange. Unlike ICOs, an IEO is conducted on the platform of a cryptocurrency exchange, which provides increased credibility.

Initial Public Offering (IPO): An IPO is the process by which a private company can go public by selling its stocks to the general public. It could be a new, young company, or an old company that decides to be listed on an exchange and hence goes public.

Injured Spouse: An injured spouse is a married person who files a joint tax return and is not responsible for their spouse's past due debts. The injured spouse can request their portion of the tax refund from the IRS.

Innocent Spouse: In tax law, an innocent spouse files a joint tax return and is unaware of errors made by their spouse that led to an understatement of tax. They can apply for relief from tax liability related to their spouse’s errors.

Insolvency: This is a financial state where an individual or entity cannot meet its financial obligations with its lender(s) as debts become due. In tax terms, insolvency can affect tax treatment, particularly in debt forgiveness.

Installment Agreement: This is a plan granted by the IRS or other tax authorities, allowing taxpayers to pay off a tax debt over some time. It's typically used when a taxpayer is unable to pay their tax debt in full at one time.

Interest: In finance, interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate. In taxation, interest can be charged on unpaid taxes or paid to taxpayers on certain refunds.

Internal Revenue Code (IRC): The IRC is the body of federal statutory tax law in the United States. It covers all federal tax provisions, including income tax, payroll taxes, estate taxes, gift taxes, and excise taxes.

Internal Revenue Service (IRS): The IRS is the U.S. government agency responsible for the collection of taxes and the enforcement of tax laws. It oversees the administration of the Internal Revenue Code.

Interoperability: In the context of blockchain and technology, interoperability refers to the ability of different computer systems, blockchains, or networks to exchange and use information without special access or integration efforts.

IRS 30-Day Letter: This is a letter from the IRS giving a taxpayer 30 days to appeal changes the IRS proposes to make to a tax return. The letter outlines the proposed changes and provides instructions on how to contest them.

IRS Form 1040: The standard IRS form that individuals use to file their annual income tax returns. It includes sections for reporting income and deductions and calculating the amount of tax owed or refund due.

IRS Form 2848: This form is used to authorize an individual, such as an attorney, CPA, or enrolled agent, to represent a taxpayer before the IRS. It gives the representative power to receive confidential tax information and to perform certain actions on behalf of the taxpayer.

IRS Form 4549: A form used by the IRS to report changes to a taxpayer's income, credits, deductions, etc., as a result of an examination (audit). The form shows the proposed adjustments and any additional tax, penalty, and interest the taxpayer must pay.

IRS Form 8821: This form authorizes any individual, corporation, firm, organization, or partnership designated by the taxpayer to inspect and/or receive confidential information in any office of the IRS for the type of tax and the years or periods listed on the form.

IRS Form 886-A: This form is an explanation of items used by the IRS to provide a detailed description of adjustments or changes proposed during an audit.

Isolated Margin: In trading, particularly in cryptocurrency, isolated margin is the use of margin (borrowed money) limited to a single trade. This protects other assets in the trader’s account from being liquidated in case the trade is unsuccessful.

Issuance: In finance, issuance refers to the process of offering new or existing securities for sale to investors. In the context of cryptocurrencies, it can also refer to the creation of new tokens or coins.

Itemized Deductions: These are eligible expenses that individual taxpayers in the United States can report on their federal income tax returns to decrease their taxable income.

Job-Related Expenses: Expenses that are necessary for your job and not reimbursed by your employer. These include travel expenses, professional dues, work-related education, and uniforms. Many job-related expenses are no longer deductible under recent tax law changes.

K-1 (Schedule): A tax document that reports the incomes, losses, and dividends of a business's partners or S corporation's shareholders. The K-1 Schedule reports each partner's share of these financial items.

Know Your Customer (KYC): KYC refers to the process of a business verifying the identity of its clients, typically as a part of anti-money laundering laws. In the cryptocurrency world, KYC processes are often used by exchanges and wallets to comply with regulatory requirements.

Latency: In technology and finance, latency refers to the delay between a request and a response. In the context of blockchain and trading, it's the time taken for a transaction to be executed and then recorded on the blockchain.

Layer 1: Layer 1 refers to the main network in a blockchain protocol, where all on-chain transactions are executed. It represents the foundational layer of the blockchain architecture. Cryptocurrencies like Bitcoin, Ethereum, and Solana not only function as digital currencies but also serve as Layer 1 networks, providing the base framework for their respective blockchain ecosystems.

Layer 2: This term refers to a secondary framework or protocol built on top of an existing blockchain system. The main goal of these protocols is to solve the transaction speed and scaling issues for the main blockchain (Layer 1).

Ledger: In finance, a ledger is a book or other collection of financial accounts. In the context of cryptocurrencies, a ledger is a digital record of transactions. The blockchain itself is a type of distributed ledger.

Legislative Grace: This principle in U.S. tax law states that all tax deductions and credits are a matter of "legislative grace." No taxpayer is entitled to a deduction or credit unless specifically granted by law.

Leverage: In finance, leverage is the use of borrowed funds to increase one's trading position beyond what would be available from one's cash balance alone. Leverage can amplify both gains and losses.

Leveraged Tokens: These are crypto tokens that offer leveraged exposure to the price of an underlying asset. They allow holders to potentially increase their returns but with a higher risk than holding the underlying asset directly.

Lightning Network: A "Layer 2" payment protocol layered on top of a blockchain-based cryptocurrency (like Bitcoin). It's designed to enable fast, scalable transactions among participating nodes and is used for micropayments.

Like-Kind Exchange: Under U.S. tax law, a like-kind exchange allows for the exchange of similar types of property without immediate tax liability. This can defer capital gains taxes as long as the rules of the exchange are followed.

Liquid Staking: Liquid staking is where users stake their cryptocurrency tokens in a proof-of-stake blockchain network but retain the liquidity of their assets. Unlike traditional staking, where staked assets are locked and cannot be used until they are unstaked, liquid staking involves receiving a tradable derivative token in exchange for the staked asset. This derivative token represents the staked position and can often be used elsewhere in the DeFi ecosystem for activities like lending, borrowing, or trading, providing liquidity while still earning staking rewards.

Liquidation: In financial terms, liquidation refers to converting assets into cash. In the context of trading, it can also mean closing a position when a margin call is not met or when profits are taken.

Liquidity: This refers to the ease with which an asset or security can be converted into cash without affecting its market price. High liquidity is generally associated with a high volume of trading in that asset or security.

Liquidity Pool: A liquidity pool is a collection of funds locked in a smart contract on a DeFi platform. It enables decentralized trading, lending, and other functions by providing the necessary liquidity. Users, known as liquidity providers, add funds to these pools and, in return, earn fees from the transactions that occur within the pool.

Liquidity Pool Tokens (LP Tokens): When users contribute assets to a liquidity pool, they receive liquidity pool tokens (LP tokens) in return. These tokens represent the user's share of the pool and can be used to reclaim their proportion of the pool's assets, along with a portion of the transaction fees, when they decide to withdraw their liquidity.

Liquidity Provider: In financial markets and DeFi (Decentralized Finance), a liquidity provider is an individual or entity that contributes assets to a liquidity pool to facilitate trading on the platform and earns passive income on their deposit.

Listing: In finance, this refers to the company’s shares being on the list of stocks that are officially traded on a stock exchange. In the context of cryptocurrencies, it refers to a crypto coin or token being added to an exchange.

Mainnet: In blockchain technology, the mainnet is the primary network where actual transactions take place on the distributed ledger. It’s the final, fully developed version of the blockchain project, allowing real trades and real value to be transacted.

Mainnet Swap: This occurs when a blockchain project moves from a test network (testnet) to its main network (mainnet). During a mainnet swap, the project’s tokens are transferred from the testnet to the mainnet.

Maker: In financial trading, a maker is someone who places a limit order that adds liquidity to the market. Makers create a market for others to trade against, as opposed to takers, who remove liquidity from the market by filling orders already placed by makers.

Margin Trading: This is a method of trading assets using funds provided by a third party. In margin trading, traders use leverage to open positions that are larger than their actual account balance, potentially amplifying both gains and losses.

Marginal Tax Bracket: This refers to the tax bracket in which your last dollar of income falls and is taxed. The United States uses a progressive tax system, meaning as income increases, it is taxed at a higher rate.

Marginal Tax Rate: The marginal tax rate is the rate at which your last dollar of income is taxed. In a progressive tax system, this rate increases as income increases through different tax brackets.

Market Capitalization: In finance, market capitalization (market cap) refers to the total market value of a company's outstanding shares. In cryptocurrency, it refers to the total value of all coins or tokens that have been mined.

Market Order: A market order is an instruction to buy or sell a security or commodity at the current market price. Market orders are executed immediately and are used when certainty of execution is a priority over the price of execution.

Masternode: In blockchain technology, a masternode is a server in a decentralized network. Masternodes are typically required to provide higher levels of functionality and governance, and they often require a significant investment in the native cryptocurrency.

Maximum Supply: The maximum supply is the total number of coins or tokens that will ever exist for a cryptocurrency. This is predetermined by its source code and is different from circulating supply, which refers to the number currently in circulation.

Meme Coin: A type of cryptocurrency that is often created as a joke or for fun, deriving its theme from internet memes or popular culture references.

Mempool: Short for memory pool, the mempool is the collection of all transaction data in a blockchain that has been transmitted to the network’s nodes but not yet confirmed in a block.

Merged Mining: This is the process of mining two cryptocurrencies at the same time without sacrificing overall mining performance. It allows miners to use their computational power to mine blocks on multiple blockchains.

Metadata: Metadata is data that provides information about other data. In the context of digital transactions, metadata can include information like transaction size, time, and involved parties without disclosing the actual transaction value or parties' identities.

Metaverse: The metaverse is a collective virtual shared space created by the convergence of virtually enhanced physical reality, augmented reality, blockchain, and the internet. It's a space where users interact with a computer-generated environment and other users.

Michael Saylor: Michael Saylor, co-founder and CEO of MicroStrategy, stands out as a prominent Bitcoin advocate. Leading a company specializing in business intelligence and cloud-based services, he has steered MicroStrategy towards significant Bitcoin investments, reinforcing his belief in cryptocurrency as a vital digital asset.

Mining: Mining is the process employed by proof-of-work blockchains to create new coins, validate transactions, and secure the network. It involves utilizing computer hardware to perform complex mathematical calculations in order to solve cryptographic problems and discover the next block. The first miner to correctly solve these problems for a block is rewarded with transaction fees from that block and a specified number of newly minted coins.

Mining Farm: A mining farm is a location, usually a large space, where multiple cryptocurrency mining machines are set up to mine cryptocurrencies. These farms require significant electrical power, cooling, and ventilation systems.

Minting: In the context of cryptocurrencies and NFTs, minting is the process of creating new coins or tokens and recording them on the blockchain. This term is also used specifically for the creation of NFTs.

Miscellaneous Deduction Not Subject to 2%: These are certain deductions taxpayers could claim on their federal income tax return that were not subject to the 2% of adjusted gross income floor. Common examples include gambling losses and casualty and theft losses from income-producing property. Note that the Tax Cuts and Jobs Act of 2017 suspended most miscellaneous itemized deductions until 2025.

Miscellaneous Deduction Subject to 2%: These were deductions that taxpayers could claim only to the extent that their total amount exceeded 2% of their adjusted gross income. Common examples include unreimbursed employee expenses and tax preparation fees. As with the non-subject deductions, these were also suspended until 2025 by the Tax Cuts and Jobs Act of 2017.

Miscellaneous Income: This type of income doesn't fit into other income categories. It includes rent, royalties, income from gigs or hobbies, and prize or award money.

Monetary Policy: The process by which a central bank, monetary authority, or government manages the supply of money or trading in foreign exchange markets. This policy is used to control inflation, maximize employment, and stabilize currency.

Moon: In cryptocurrency slang, "to the moon" indicates the belief that a cryptocurrency's price will rise significantly or skyrocket.

Multisignature: Often referred to as multisig, this is a digital signature scheme that requires multiple keys to authorize a cryptocurrency transaction. It is used to add additional security for crypto transactions.

National Research Program: Run by the IRS, this program involves detailed audits of random samples of tax returns to collect data on taxpayer compliance. The findings help improve the efficiency and effectiveness of IRS enforcement.

Net Investment Income Tax (NIIT): A tax of 3.8% on certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts.

Net Operating Loss (NOL): An NOL occurs when a company's allowable tax deductions are greater than its taxable income within a tax period. NOLs can generally be used to offset future tax payments, which reduces future tax liabilities.

NFT Floor Prices: The lowest price at which an NFT can be purchased in a particular collection. It's an indicator of the minimum entry price for an investor interested in purchasing an NFT from that collection.

NGMI: An acronym in the crypto community for "Not Going to Make It." It’s often used to describe a pessimistic outlook on an investment or a lack of belief in the long-term success of a particular cryptocurrency or project.

Ninety-Day Letter: Officially known as the Statutory Notice of Deficiency, this IRS letter gives the taxpayer 90 days to either agree or appeal the IRS's proposed adjustments to their tax return. It's a formal legal notice.

No Change Letter: A letter from the IRS stating that after an audit, they have found no issues and made no changes to the tax return.

Node: In blockchain, a node is a computer connected to the blockchain network that uses a client to validate and relay transactions.

Non-Cash Charitable Contributions: These are donations of physical items rather than money to a qualified charitable organization. Examples include clothing, furniture, electronics, or other tangible property. The value of these items can often be deducted from the donor's tax return.

Non-Community Property: In marriage and property law, non-community property refers to assets owned separately by either spouse, typically acquired before marriage, or received individually as a gift or inheritance.

Non-fungible Token (NFT): An NFT is a unique digital asset that uses blockchain technology to represent ownership of a specific item or piece of content. Unlike cryptocurrencies like Bitcoin or Ethereum, each NFT is distinct and cannot be exchanged on a like-for-like basis.

Non-Refundable Credit: A tax credit that can only reduce a taxpayer's liability to zero. Any portion of the credit that exceeds the taxpayer's liability is not refunded. Examples include child and dependent care credits and education credits.

Nonce: In blockchain technology, a nonce is a number that blockchain miners are solving for. It refers to a number added to a hashed or encrypted block that, when rehashed, meets the difficulty level restrictions of the target blockchain.

Notice: In taxation, a notice is an official letter from the IRS or other tax authorities that informs the taxpayer about an issue with their account or tax return. It can range from a simple notification of changes to a request for payment.

Notice of Deficiency (NOD): An IRS notice sent to taxpayers to inform them of a discrepancy in their tax return and the intention to assess additional tax. It provides the taxpayer with a 90-day period to file a petition with the Tax Court to challenge the proposed changes.

Off-chain: This refers to transactions or processes that occur outside of the blockchain network. Off-chain transactions can be used to reduce transaction fees and increase transaction speeds, but they may require an element of trust in a third party.

Offer in Compromise (OIC): An agreement between a taxpayer and the IRS that settles the taxpayer's tax liabilities for less than the full amount owed. It's typically offered in situations where full payment would cause financial hardship.

Offshore account: A bank account located outside the account holder's country of residence, often used for legal tax avoidance, greater privacy, currency diversification, or other purposes.

On-Chain Analysis: The analysis of transaction data that is recorded on a blockchain, used in cryptocurrency contexts to assess market trends, asset movements, and economic activities on the blockchain.

Open Tax Year: This refers to tax years that are still subject to audit or adjustment by the IRS. Generally, the IRS can audit returns filed within the last three years.

Open-Source Software (OSS): Software with source code that anyone can inspect, modify, and enhance. In the context of blockchain, many projects are open-source, allowing for community collaboration and transparency.

Options: Financial derivatives that give the buyer the right, but not the obligation, to buy or sell an asset at an agreed-upon price and date. They are used for hedging or speculation.

Oracle: In blockchain and smart contracts, an oracle is a way to bring real-world data into the blockchain environment. Oracles provide external data (like price changes) that trigger smart contract executions.

Ordinary Income: Income characterized as regular income, such as wages, salaries, commissions, and interest. It is taxed at standard federal income tax rates, which differ from capital gains taxes.

Orphan Block: In blockchain technology, an orphan block is a block that is not accepted into the blockchain network due to a lag in data transmission. It typically occurs when two miners produce blocks at similar times.

Paid Preparer: This refers to a professional who is compensated for preparing all or a substantial portion of a tax return or claim for a refund. Paid preparers are often required to sign the tax return and include their Preparer Tax Identification Number (PTIN).

Paper Hands: A term used in the investment and cryptocurrency communities, referring to investors who sell their holdings too early in response to a drop in price or under the pressure of market volatility, often perceived as having a lack of conviction or resilience.

Paper Wallet: In the context of cryptocurrencies, a paper wallet is a way of storing crypto coins offline as a physical document. It typically includes printed QR codes representing the public and private keys of a wallet.

Partial Payment Installment Agreement: A tax payment option provided by the IRS that allows taxpayers to make smaller monthly payments toward their tax debt. The total amount paid over time may be less than the total amount of tax owed.

Partnership: A business entity formed between two or more individuals who share management and profits. The federal government recognizes several types of partnerships: General Partnerships, Limited Partnerships, Limited Liability Partnerships (LLP), and Limited Liability Limited Partnerships (LLLP).

Partnership Return: A tax document (IRS Form 1065) that partnerships must file. It reports the income, deductions, gains, losses, etc., of the partnership but does not pay taxes. The profits and losses are passed through to the partners.

Pass-Through Entity: A business entity that does not pay income taxes at the corporate level. Instead, its income is "passed through" to its owners or partners, who then report and pay taxes on the income through their individual tax returns.

Payment: In general, a payment is the transfer of money, goods, or services from one party to another as compensation or in exchange for something. In tax terms, it refers to the transfer of money to satisfy a tax liability.

Peer-to-Peer (P2P): A decentralized model of interactions between parties in a distributed network, where participants interact directly without the need for intermediaries. In finance, P2P commonly refers to lending, transactions, or file sharing.

Pegged Currency: A currency whose value is tied to another currency, group of currencies, or another measure of value, like gold. A currency peg stabilizes the exchange rate between countries.

Penalty: In taxation, a penalty is a financial punishment imposed by the IRS or other tax authorities for not complying with tax laws, such as late filing or payment, or for inaccuracies in a tax return.

Penalty Abatement: A provision that allows taxpayers to request a reduction or removal of penalties applied by the IRS for reasons such as failing to file or pay taxes on time, provided they have a reasonable cause or meet other criteria set by the IRS.

Pepe: Originally an internet meme featuring a green frog character, which has been adopted in various contexts within internet culture, including occasionally in cryptocurrency and meme coin communities.

Permissionless Blockchain: A type of blockchain where anyone can participate without needing approval from a governing body. Examples include Bitcoin and Ethereum, where anyone can join the network, validate transactions, and create new blocks.

PFP (Profile Picture): Commonly used in social media and online contexts, it refers to the display image used on one's profile. In the crypto space, PFPs are often associated with unique digital avatars or NFTs.

Phase Out: In finance and taxation, this refers to the gradual reduction or elimination of a benefit as income rises. It often applies to tax credits, deductions, and exemptions, which decrease as a taxpayer’s income increases to a certain threshold.

Plasma: A proposed framework for scaling Ethereum’s capacity for handling transactions. It involves creating smaller, individual blockchains (child chains) linked to the main Ethereum blockchain, reducing the strain on the main chain.

Ponzi Scheme: A form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity, and they are unaware that other investors are the source of funds.

Power of Attorney (POA): A legal document that allows an individual to appoint someone else to manage their affairs if they are unable to do so. In tax matters, a POA allows someone to represent the taxpayer before the IRS and handle tax-related matters.

Pre-trial Conference: In the context of legal proceedings, including tax disputes, a pre-trial conference is a meeting of the parties involved in a case conducted prior to the trial. The purpose is to plan the trial and discuss issues like settlement possibilities.

Price Action: This term refers to the movement of a security's price plotted over time. Price action is the basis of all technical analysis of a stock, commodity, or other asset chart.

Prisoner's Dilemma: A standard example of a game analyzed in game theory that shows why two completely rational individuals might not cooperate, even if it appears that it is in their best interests to do so.

Private Key: In cryptography and cryptocurrency, a private key is a secret number that allows bitcoins to be spent. Each Bitcoin wallet contains one or more private keys, which are saved in the wallet file.

Proof of Reserves (PoR): In cryptocurrency, this is an audit mechanism designed to prove that a service (like a crypto exchange) holds the reserves it claims to, offering transparency and proof of solvency.

Proof of Stake (PoS): A type of consensus mechanism used by blockchain networks to achieve distributed consensus. It requires users to stake their tokens as collateral to validate transactions. It's seen as more energy-efficient compared to Proof of Work.

Proof of Staked Authority (PoSA): A consensus mechanism that combines elements of Proof of Stake and Proof of Authority. Validators stake their tokens and are chosen to create blocks based on their stake and reputation.

Proof of Work (PoW): A consensus algorithm in a blockchain network where miners solve complex mathematical puzzles to validate transactions and create new blocks. Bitcoin is the most well-known implementation of PoW.

Proposed Regulations: Preliminary rules and guidelines issued by government agencies for public feedback before they are finalized. They provide an interpretation and intended implementation of laws.

Proposer-Builder Separation (PBS): A proposal in blockchain technology that separates the roles of proposing blocks and building block content. This aims to improve censorship resistance and decentralization in block creation.

Proto-Danksharding: A term related to Ethereum’s planned scaling solutions. It's a preliminary step towards implementing Danksharding, which is a more comprehensive sharding proposal aimed at greatly increasing Ethereum's capacity.

PTIN (Preparer Tax Identification Number): A number that all paid tax return preparers must use on U.S. federal tax returns or claims for refund submitted to the IRS. It's used to identify the preparers of the return and maintain their privacy.

Pumpamentals: A term used in the cryptocurrency community, humorously or critically, to refer to aspects of a cryptocurrency that might encourage buying and price increases without solid underlying fundamentals.

Puts: In options trading, a put option is a contract giving the buyer the right, but not the obligation, to sell a stock or other asset at a specified price within a specific time period.

Qualified Business Income (QBI): This refers to the amount of qualified items of income, gain, deduction, and loss from any qualified trade or business. This income is eligible for the QBI deduction, also known as Section 199A deduction, under the U.S. tax code.

Qualified Domestic Relations Order (QDRO): A QDRO is a judicial order in the United States, issued as part of a property division in a divorce or legal separation, that splits ownership of a retirement plan to give the divorced spouse their share of the asset or pension plan.

Real Estate Investment Trusts (REITs): REITs are companies that own, operate, or finance income-generating real estate across a range of property sectors. They offer a way for individuals to invest in large-scale, income-producing real estate.

Real World Assets (RWAs): In finance, RWAs are physical or tangible assets used as collateral or backing for financial products. In the context of DeFi (Decentralized Finance), it refers to the integration of traditional, tangible assets into the blockchain ecosystem.

Refund: In taxation, a refund is the return of excess amounts of that a taxpayer has paid to the state or federal government throughout the year.

Refundable Credit: A tax credit that can reduce one’s tax liability to below zero, resulting in a refund. Examples include the Earned Income Tax Credit (EITC) and the Child Tax Credit, where if the credit is larger than the amount of taxes owed, the excess amount is refunded to the taxpayer.

Regulations: Official rules issued by government agencies to interpret and implement laws passed by legislatures, providing detailed guidelines for compliance and enforcement. Tax regulations interpret and supplement the Internal Revenue Code.

Rekt: A slang term in cryptocurrency culture derived from "wrecked," signifying a significant financial loss, often due to a bad trade or investment.

Relative Strength Index (RSI): A indicator of the momentum in an asset’s price movement used in technical analysis. This measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.

Resistance: In technical analysis, resistance is a price level where selling pressure is strong enough to prevent the price from rising further. The rationale is that as the price approaches resistance, more sellers will sell, and buyers will become less willing to buy.

Return on Investment (ROI): A financial metric used to measure the profit from an investment. It is calculated by dividing the profit (or gain) of an investment by the cost; the result is expressed as a percentage.

Revenue Agent (RA): In the IRS, a revenue agent specializes in tax audits of businesses and complex individual tax returns.

Revenue Procedure: An official statement of a procedure published by the IRS that affects the rights or duties of taxpayers or other members of the public under the law in order to assist them in complying with such laws.

Revenue Ruling: An interpretation by the U.S. Internal Revenue Service regarding the application of tax laws. It provides guidance and clarification on specific tax matters or IRS laws.

Rug Pull: In cryptocurrency, a rug pull is a type of scam where developers abandon a project and take their investors' funds. It is typically associated with DeFi projects and new cryptocurrencies.

S Corporation: A special type of corporation in the United States that allows income, losses, deductions, and credits to be passed through shareholders for federal tax purposes. Shareholders report income and losses on their personal tax returns.

Sales Tax: A tax paid to a state or local tax authority for the sales of certain goods and services. The tax is generally calculated as a percentage of the retail sale price and is usually collected by the retailer at the point of sale.

Satoshi: The smallest unit of the bitcoin cryptocurrency, named after Satoshi Nakamoto, the pseudonym of the person or group of people who created bitcoin. One satoshi is equal to one hundred millionth of a bitcoin (0.00000001 BTC).

Satoshi Nakamoto: The pseudonymous person or group of people who created Bitcoin and authored its original white paper. Nakamoto also devised the first blockchain database. The true identity of Satoshi Nakamoto remains unknown.

Schedule 1: An additional form used with the U.S. tax return (Form 1040) for reporting certain types of income not listed on the main form, such as staking, airdrops, or unemployment compensation.

Schedule C: A tax form used by sole proprietors in the United States to report profits or losses from a business operation.

Second Notice: In tax procedures, a second notice is usually a follow-up letter sent by the IRS to taxpayers if the first notice has been ignored or the taxpayer's issue has not been resolved. It typically indicates a more urgent need for response or payment.

Section 179 Deduction: A provision in the U.S. tax code that allows businesses to deduct the purchase price of qualifying equipment and/or software purchased or financed during the tax year instead of capitalizing and depreciating the asset over time.

Section 199A Deduction: Also known as the Qualified Business Income deduction, it allows owners of sole proprietorships, partnerships, S corporations, and some trusts and estates to deduct up to 20% of their qualified business income on their taxes.

Securities: Financial instruments that represent ownership positions in publicly-traded corporations (stocks), creditor relationships with governmental bodies or corporations (bonds), or rights to ownership as represented by an option.

Securities and Exchange Commission (SEC): A U.S. government agency responsible for regulating the securities markets and protecting investors. The SEC enforces laws against market manipulation and ensures that securities sold through exchanges are done so with transparency.

Seed Phrase: A series of words generated by a cryptocurrency wallet that give the user access to the blockchain where their assets are held. It acts as a backup, allowing access to the cryptocurrencies if the wallet is lost or damaged.

Segregated Witness (SegWit): An implemented protocol upgrade intended to solve a blockchain size limitation problem that reduces transaction size. SegWit was activated on the Bitcoin network to improve its scalability.

Senate: The upper chamber of the United States Congress, consisting of senators elected from each state, two per state, regardless of population size.

Self-Employed: An individual who runs their own business as a sole proprietor, independent contractor, or freelancer. Self-employed individuals are responsible for handling their own tax obligations, including paying self-employment tax.

Self-Employment Tax (SE Tax): A tax primarily for individuals who work for themselves. It covers Social Security and Medicare taxes for individuals who do not have these taxes withheld from their pay.

Sentiment: In finance and investment, sentiment refers to the overall attitude of investors towards a security or financial market. It is the feeling or tone of a market, or its crowd psychology, as revealed through the activity and price movement of the securities.

SHA-256: A cryptographic hash function used in blockchain technologies, including Bitcoin. It generates a unique 256-bit (32-byte) signature for text strings and is used for security and data integrity.

Sharding: A type of database partitioning that separates large databases into smaller, faster, more easily managed parts, known as shards. In blockchain, it is a proposed scaling solution that involves dividing the network into smaller pieces.

Shrimp: In cryptocurrency slang, a shrimp is an investor or trader who holds a relatively small amount of crypto assets, especially when compared to larger holders like "whales."

Sidechains: These are secondary chains or blockchains that run parallel to a primary blockchain. Sidechains allow tokens and other digital assets from one blockchain to be securely used in a separate blockchain and then moved back to the original chain if needed.

Smart Contract: A smart contract is a program that is stored on a blockchain, and is executed based on the terms of the code and agreement between the buyer and seller. It automatically executes, controls, or documents relevant events and actions according to the terms of the contract.

Snapshot: In blockchain technology, a snapshot is a record of the state of a blockchain at a particular point in time. This can be used for various purposes, including forking a new blockchain or distributing new tokens during an airdrop.

Social Trading: A process where online investors rely on user-generated financial content collated from various networks to make financial decisions. Social trading allows traders to observe their peers and expert traders' trading behavior and follow their investment strategies using copy trading or mirror trading.

SocialFi: SocialFi, or Social Finance, combines social media with DeFi. It refers to platforms or projects integrating financial services into social networking environments, often using blockchain technology.

Soft Fork: A change to a blockchain's protocol where only previously valid transactions are made invalid, typically backward-compatible as old nodes recognize new blocks as valid.

Sole Proprietor: A sole proprietor is an individual who owns and operates a business alone. The business is not a legally separate entity, meaning the owner is entitled to all profits and is responsible for all the business's debts, losses, and liabilities.

Sole Proprietorship: This is the simplest business form under which one can operate a business. It is not a legal entity and refers to a person who owns the business and is personally responsible for its debts.

Solidity: A programming language designed for developing smart contracts on blockchain platforms like Ethereum. It is contract-oriented and enables the creation of a wide range of decentralized applications.

Source Code: The source code is the collection of code written using a human-readable programming language that is then compiled into a program that a computer can execute. It forms the basis of software and applications.

SPL: SPL stands for Serum Program Library. It's a token standard on the Solana blockchain, similar to Ethereum's ERC-20 standard. It's used for creating and handling tokens on the Solana network.

Stablecoin: A type of cryptocurrency that is designed to have a stable value as opposed to the high volatility seen in other cryptocurrencies. This is often achieved by pegging the stablecoin to a reserve asset like the U.S. dollar, gold, or another stable asset.

Staking Pool: A staking pool is a group of coin holders merging their resources to increase their chances of validating blocks and receiving rewards. They combine their staking power and share the eventual block rewards proportionally to their contributions.

Standard Deduction: A portion of income not subject to tax that can be used to reduce your tax bill. The standard deduction amount varies depending on filing status, age, and whether or not a taxpayer or their spouse is blind.

Stat Notice: Likely a reference to a 'Statutory Notice of Deficiency' from the IRS. It is an official notice that the IRS plans to assess a tax liability, and it allows the taxpayer 90 days to file a petition with the Tax Court to challenge the proposed changes.

Statute of Limitations: In the context of tax law, this refers to the time within which legal action can be taken. For taxes, it typically refers to the time limit for the IRS to audit a tax return or for a taxpayer to file a return or claim a credit or refund.

Stocks: Financial instruments that represent an ownership share in a company. Stockholders are entitled to a portion of a company's assets and earnings.

Store of Value: An asset, commodity, or currency that maintains its value without depreciating. Gold and other precious metals are traditionally considered good stores of value. In the context of cryptocurrency, Bitcoin is often discussed as a potential store of value.

Substantial Authority: In tax law, substantial authority refers to the level of authority required for a taxpayer to avoid a penalty for underpayment due to an unreasonable position on their tax return. It's less stringent than the 'more likely than not' standard but more stringent than the 'reasonable basis' standard.

Substantiation: The act of providing evidence or proof to support a claim. In taxation, substantiation is required to prove eligibility for a deduction or credit. This typically involves keeping detailed records, receipts, logs, and other documentation.

Support: In technical analysis and trading, support refers to a price level where a downward trend can pause due to a concentration of demand or buying interest. As the price of an asset drops, demand for the asset increases, thus forming the support line.

Supreme Court: The highest federal court in the United States and the head of the judicial branch of government. It has the ultimate appellate jurisdiction over all U.S. federal court cases and, in some cases, state cases.

Taker: In financial markets, a taker is a trader who removes liquidity from the order book by immediately placing an order that matches an existing order on the book. Taker fees are usually higher than maker fees due to the immediate nature of trade.

Tank: In financial slang, to 'tank' means to rapidly decline in value. It's often used to describe a situation where the price of a stock or a market is falling sharply.

Taproot: Taproot is a significant upgrade to the Bitcoin blockchain, implemented to enhance the blockchain's scalability, efficiency, and privacy. It introduces a new script type that makes complex transactions indistinguishable from standard transactions on the blockchain, improving both privacy and efficiency.

Tax Bracket: A range of incomes taxed at a specific rate. Tax brackets result in a progressive tax system, where tax rates increase as income increases. There are several tax brackets, each with its own tax rate, in the U.S. tax system.

Tax Court: The United States Tax Court is a federal court that hears and adjudicates tax-related disputes and issues, including disputes over income tax, estate tax, and gift tax, among others, before they are assessed by the Internal Revenue Service.

Tax Court Petition: A legal document filed by a taxpayer to dispute the IRS's assessment. Filing a petition starts the litigation process in the U.S. Tax Court. It is used when a taxpayer disagrees with the IRS over income tax, penalties, etc.

Tax Identification Number (TIN): A tax identification number is a number used by the IRS in the administration of tax laws. It is issued either by the Social Security Administration or by the IRS. A TIN can be a Social Security Number (SSN), Employer Identification Number (EIN), or Individual Taxpayer Identification Number (ITIN).

Tax Loss: A loss that results from holding an asset that has decreased in value compared to its purchase price and is realized when the asset is sold. This loss can be used to offset capital gains for tax purposes.

Tax Loss Harvesting: A strategy in which investors sell securities at a loss to offset a capital gains tax liability. It is used to reduce tax liability by offsetting realized capital gains with realized capital losses.

Tax Return: A form(s) filed with a state or federal tax authority that reports income, expenses, and other relevant tax information. Tax returns are used by taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes.

Tax Year: The period for which tax is calculated. In the U.S., the individual tax year is usually the same as the calendar year, running from January 1 to December 31. However, businesses can have a different fiscal year.

Taxable Income: This is the portion of your total income used to calculate how much tax you owe in a given tax year. It's generally your gross income minus any deductions or exemptions allowed in that tax year.

Taxpayer Advocate Service (TAS): An independent organization within the IRS that helps taxpayers resolve problems with the IRS and recommends changes to prevent future problems.

Taxpayer Bill of Rights: A document that outlines the fundamental rights of taxpayers when dealing with the IRS. These rights include the right to be informed, the right to quality service, and the right to challenge the IRS’s position, among others.

Technical Analysis: The study of historical market data, including price and volume, to predict future market behavior. It is widely used in the trading of financial assets like stocks, bonds, and cryptocurrencies.

Ticker: A unique series of letters assigned to a security or asset for trading purposes. In stock markets, it's an abbreviation used to uniquely identify publicly traded shares of a particular stock. In cryptocurrency, it's the abbreviation used to identify cryptocurrencies (e.g., BTC for Bitcoin, ETH for Ethereum).

Token: In the context of blockchain and cryptocurrencies, a token is a type of cryptocurrency that represents an asset or specific use and resides on its blockchain. Tokens can be used for investment purposes, to store value, or to make purchases.

Token Lockup: A period during which tokens cannot be sold or transferred. Lockup periods are often used in initial coin offerings (ICOs) or token sales to ensure stability in the token’s early days and to align the long-term interests of developers and investors.

Token Sale: An event in which a new cryptocurrency project sells part of its cryptocurrency tokens to early adopters and enthusiasts in exchange for funding. This is often used to raise capital for the development of a new coin, app, or service.

Token Standards: These are sets of common rules and definitions that apply to tokens within a particular blockchain. Standards ensure compatibility between different tokens and platforms. Examples include ERC-20 and ERC-721 on the Ethereum blockchain.

Tokenomics: A portmanteau of “token” and “economics,” tokenomics refers to studying the economics of cryptocurrencies or tokens. It includes considerations like token distribution, supply, demand, incentives, and other factors that could impact a token’s value.

Total Supply: In cryptocurrency, this refers to the total number of coins or tokens that currently exist, minus any coins that have been verifiably burned. It's different from circulating supply, which excludes tokens locked or reserved.

Total Value Locked (TVL): In the context of DeFi, TVL represents the total capital held within the DeFi protocols. It's a measure of the overall health and growth of the DeFi space.

TradFi: Short for traditional finance, referring to the conventional financial system and institutions such as banks, insurance companies, and the stock market, as opposed to the emerging DeFi sector.

Transaction ID (TXID): A unique string of characters that identifies a transaction on a blockchain. This ID can be used to look up and verify the transaction details, including the sender, receiver, and amount transferred.

Transactions Per Second (TPS): A measure of the number of transactions a blockchain network can process each second. Higher TPS indicates a more scalable network, which is a key factor in the usability of a cryptocurrency.

Treasury Department: In the United States, the Department of the Treasury is the national treasury and finance department, which manages federal finances, collects taxes, mints coins, and prints paper money.

TrueUSD (TUSD): TrueUSD is a stablecoin that is pegged to the US dollar. It’s a fully collateralized, legally protected, and transparently verified cryptocurrency that aims to offer the advantages of using cryptocurrencies without the volatility typically associated with them.

Trustless: In blockchain and cryptocurrency, a trustless system is one where transactions and interactions can occur without the need for trust or a central authority. This is due to the cryptographic, algorithmic protocols governing the system.

Turing Complete: A system is Turing complete if it can perform any computation that a Turing machine can, given an appropriate algorithm and the necessary time and memory. In blockchain, a Turing complete blockchain can execute complex contracts and computations.

Unrelated Business Taxable Income (UBTI): This refers to the income generated by tax-exempt entities, such as IRAs or charities, from activities unrelated to their primary purpose. Such income is subject to unrelated business income tax (UBIT) to level the playing field with for-profit entities engaged in the same activities.

Unspent Transaction Output (UTXO): In cryptocurrencies like Bitcoin, a UTXO is an output of a blockchain transaction that has not been spent and can be used as input in a new transaction. It represents cryptocurrency that is available to be used in a new transaction.

Use Taxes: These are taxes on the use, storage, or consumption of goods or services, typically levied in the jurisdiction where the product is consumed. It often complements the sales tax and applies mainly to items bought outside the taxing jurisdiction.

Value Added Tax (VAT): This tax is similar to sales and use taxes. It is a tax placed on the consumption of a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed.

Virtual Machine: A virtual machine is a software emulation of a computer system. They provide the functionality needed to execute entire operating systems. In blockchain, Ethereum's Virtual Machine (EVM) enables the smart contracts to be executed on the Ethereum network.

Vitalik Buterin: He is a co-founder of Ethereum, which is a decentralized platform that runs smart contracts. Buterin has been involved in the Bitcoin community since 2011, and he has contributed to Bitcoin both as a writer and a developer.

Volatility: In financial markets, volatility refers to the degree of variation of a trading price series over time. It is often measured by the standard deviation of returns. In cryptocurrency, volatility typically refers to the frequent and significant price changes over short periods.

Volume: In financial markets, volume refers to the amount of a particular asset or security that is traded over a given period. It is an important indicator of the strength or weakness of a market trend.

Wash Sale: A wash sale in finance is the sale of a security (stock, bonds, options) at a loss and the repurchase of the same, or substantially similar, security shortly before or after. Wash sales are used to claim artificial losses for tax purposes.

W-2: This is an information reporting tax form that an employer must send to an employee as well as to the IRS and state tax authorities at the end of the year. This form reports an employee's annual wages and the amount of taxes withheld from their paycheck.

WAGMI: An acronym popular in the cryptocurrency community, standing for "We're All Going to Make It." It's used to express optimism and communal belief in the success of cryptocurrencies as a whole.

Wallet: In the context of cryptocurrency, a wallet refers to a digital wallet used to store, send, and receive cryptocurrencies like Bitcoin and Ethereum. Wallets can be software-based (digital) or hardware-based for increased security.

Web 1.0: Refers to the first stage of the World Wide Web evolution. Web 1.0 was characterized by static websites with limited interactivity and content predominantly created by website owners. It was mainly an information portal where users passively received information.

Web 2.0: A term describing the second generation of the World Wide Web, marked by the change from static web pages to dynamic content and the growth of social media. Web 2.0 is characterized by greater user interactivity, collaboration, and widespread network connectivity.

Web 3.0: The third generation of internet services for websites and applications driven by blockchain technology and peer-to-peer, decentralized applications. The ultimate goal of Web 3.0 is to create more intelligent, connected, and open websites.

Wei: The smallest subdivision of Ether, the cryptocurrency used on the Ethereum network. One Ether is divided into 1,000,000,000,000,000,000 (10^18) wei.

Whale: In cryptocurrency, a whale is an individual or entity that holds a large amount of a particular cryptocurrency. Their large holdings mean they have the potential to influence currency valuations.

Whitelist: A list of permitted entities (like IP addresses, email addresses, or usernames) that are granted access or privileges. In ICOs, NFTs and other token sales, being on a whitelist means being pre-approved to participate in the sale.

Wick: In trading, a wick is a line on a candle in a candlestick chart that is used to indicate where the price of an asset has fluctuated relative to its opening and closing prices. Essentially, wicks represent the highest and lowest prices reached during the given time period of the candle.

Withholding Tax: A requirement for the payer of an item of income to withhold tax from the payment and remit that tax to the government. In most jurisdictions, withholding tax applies to employment income.

Wrapped Bitcoin (WBTC): A tokenized version of Bitcoin that runs on the Ethereum blockchain. WBTC is pegged to Bitcoin and was created to allow Bitcoin holders to participate in DeFi services on Ethereum.

Wrapped Coin: A wrapped coin is a type of cryptocurrency token that represents a tokenized version of another cryptocurrency on a different blockchain. It is pegged to the value of the original currency, but it operates on a blockchain that offers additional functionality or compatibility. For instance, Wrapped Bitcoin (WBTC) is a token on the Ethereum blockchain that represents Bitcoin. Essentially, a wrapped coin allows a cryptocurrency from one blockchain to be used on another blockchain.


Wrapped Ether (WETH): Similar to Wrapped Bitcoin, Wrapped Ether allows Ether to be traded more easily on the Ethereum network by standardizing Ether’s format to be compatible with ERC-20 token standards.

Wrapping: Wrapping is the process of converting a cryptocurrency into its equivalent token form on a different blockchain. This is typically done to utilize the native cryptocurrency on a blockchain that it is not originally part of, usually to gain access to specific features or services of that blockchain. The process involves locking the original coins in a smart contract and issuing the equivalent amount in the new token, which functions on the other blockchain. The reverse process, unwrapping, converts the tokens into the original cryptocurrency.


Yolo: An acronym for "You Only Live Once." In investing, it describes a high-risk, high-reward investment strategy characterized by bold, often speculative financial moves.

Zero-Knowledge Proofs: A cryptographic method where one party can convince another that they know a specific piece of information (value x) without revealing any details of that information. This concept is broad and foundational in cryptography, used in various applications to enhance privacy and security by enabling proof without disclosure.

Zk-rollup: A type of blockchain scaling solution. Zk-rollups bundle (or "roll up") hundreds of transfers into a single transaction, using zero-knowledge proofs to maintain data integrity. This significantly reduces the strain on the network, allowing for more scalability.

Zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge): A refined type of Zero-Knowledge Proof notable for its efficiency and non-interactive process. Zk-SNARKs compress the proof process, making verification swift and straightforward without needing back-and-forth communication between the prover and verifier. They are particularly significant in blockchain contexts, such as in privacy-centric cryptocurrencies, where they provide a means to validate transactions securely and privately without revealing the transaction's content.

Zk-STARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge): Similar to zk-SNARKs, zk-STARKs are a cryptographic-proof technology that is more scalable and does not require a trusted setup, enhancing both security and privacy.