Crypto glossary

A distributed database built by adding consecutive blocks of transactions, cryptographically secured and maintained by a network of nodes.

Polish context: In Poland, blockchain operations must be reported for tax purposes and require proof of funds origin.

A computer participating in the blockchain network that stores a copy of the ledger and verifies new blocks or transactions.

Polish context: Running a full node in Poland does not require a license, but it involves energy costs and regular upkeep.

A unique identifier on the blockchain for receiving and sending cryptocurrencies, generated from a public key.

Polish context: Wallets used for PIT-38 reporting should be recorded together with transaction history and FX rates.

A secret string used to sign transactions and grant full access to funds stored on a blockchain address.

Polish context: Best practice in Poland is to keep the private key offline and secure it with a backup copy.

A list of 12 or 24 words generated by a wallet (BIP39 standard) that can restore the related private keys.

Polish context: Store the phrase physically (e.g. metal backup) and never share it with third parties.

A dedicated device (e.g. Ledger, Trezor) that stores private keys in an isolated environment, protecting against malware.

Polish context: For larger crypto portfolios, choose a model with multisig support and frequent firmware updates.

Locking Proof of Stake tokens to secure the network and receive rewards paid in additional tokens.

Polish context: In Poland, staking income must be reported in PIT-38 as capital gains using the NBP FX rate from the previous day.

Allocating funds into DeFi protocols (liquidity pools, lending) to earn combined rewards and transaction fees.

Polish context: Requires smart-contract risk analysis and monitoring the volatility of liquidity provider (LP) tokens.

The value of assets deposited into a DeFi protocol, used to gauge adoption and trust.

Polish context: High TVL alone does not guarantee safety—check deposit concentration and diversification of sources.

The Polish tax return for reporting crypto gains and losses under Article 30b of the PIT Act.

Polish context: The filing covers revenue and costs converted using the average NBP FX rate from the day before the transaction.

Anti-money laundering and know-your-customer procedures required by Polish cryptocurrency exchanges.

Polish context: Reporting entities must comply with the AML Act of 1 March 2018 and notify transactions above EUR 15,000.

The Polish platform for issuing and storing structured invoices, where crypto–fiat business transactions will need to be reported.

Polish context: The KSeF rollout requires preparing data transfer tools or exports from exchanges into the FA(2) XML format.

A token pegged to a fiat currency or other asset (e.g. USDT, USDC, EURC) used to protect portfolio value.

Polish context: When planning a portfolio, account for issuer risk and the possibility of redemption pauses.

The maximum decline of a portfolio from its latest peak, measuring potential capital loss.

Polish context: Crypto drawdown is tracked both in percentage terms and time needed to recover losses.

A strategy that adjusts position sizes based on market volatility to maintain a target risk level.

Polish context: In practice, crypto exposure can be adjusted using a 30-day standard deviation signal.