Crypto Accounting Glossary

The record of a single business transaction in the accounting system.

Equity, within the realm of business and finance, signifies the extent of ownership stake that a shareholder possesses in a company, typically manifested through shares of stock.

A type of crypto token that represents ownership in an underlying asset or company.

A financial arrangement where a third party holds and regulates payment of the funds.

The native cryptocurrency of the Ethereum blockchain, used to power smart contracts and pay for transactions.

A decentralized, open-source blockchain featuring smart contract functionality.

The original Ethereum blockchain that chose not to revert the DAO hack.

A search engine that allows users to look up, confirm and validate transactions that have taken place on the Ethereum blockchain.

A unit of measurement for hash rates, commonly used in cryptocurrency mining.

An exchange is a platform where cryptocurrencies can be bought, sold, or traded.

The value of one currency for the purpose of conversion to another.

A digital wallet provided by a cryptocurrency exchange.

A fraudulent practice by unethical cryptocurrency promoters who disappear with investors’ money during or after an ICO or other fundraising methods.

Expenses are the costs incurred by a business in order to generate revenue.

A secondary block of transactions linked to a primary blockchain block.

FIFO is an asset-management and valuation method in which assets produced or acquired first are sold, used, or disposed of first.

FOMO is a term that is often used in trading markets, including cryptocurrency markets, to describe the fear traders have of missing a potentially profitable trading opportunity. While it's not a term with direct accounting implications, FOMO can lead to trading behaviors that need to be tracked for tax purposes.

Fair Market Value (FMV) in accounting is the estimated price at which an asset would change hands between a willing buyer and seller. In crypto accounting, this could be the price of a cryptocurrency at a given time.

Yield farming, also referred to as liquidity mining, is a way to generate rewards with cryptocurrency holdings. In simple terms, it means locking up cryptocurrencies and getting rewards. In crypto accounting, the earned yields and farmed tokens need to be recorded for accurate financial accounting.

Fiat-to-Crypto refers to the transaction or exchange of traditional government-issued currency for cryptocurrencies.

A financial statement is a comprehensive report that summarizes a company's financial activities, including its assets, liabilities, income, and expenses.

A fork represents a change in the rules or protocol of a blockchain, resulting in a split into two separate chains.

A fungible token is a type of cryptographic token that is interchangeable with others of its kind.

Futures contracts in crypto accounting refer to a standardized legal agreement to buy or sell a particular cryptocurrency at a predetermined price at a specified time in the future. They are a type of derivative product and can be used for hedging or speculation. The accounting treatment involves marking to market these contracts.

GAAP, which stands for Generally Accepted Accounting Principles, is a set of standardized guidelines and principles that govern the field of accounting.

In crypto accounting, gas refers to the fee, or pricing value, required to conduct a transaction or execute a contract on the Ethereum blockchain. Gas costs, as expenses, should be accounted for and may also have tax implications.

The Genesis Block refers to the first block in any blockchain. In the context of crypto accounting, the genesis block might be significant in determining the initial distribution and ownership of a cryptocurrency.

Gwei is the smallest unit of Ether (ETH), used to measure gas prices on the Ethereum network.

HIFO is an asset management and valuation method where assets acquired or produced that have the highest value are sold, used or disposed of first. In the context of crypto accounting, this method can be used to calculate the cost basis of a cryptocurrency holding, which could potentially minimize taxable gains.

Halving is an event in which the reward for mining a cryptocurrency, like Bitcoin, is halved to control the supply.