Reference

Oil & crypto glossary

Plain-English definitions for the terms that come up most often in oil and crypto markets — and in the BitOil research itself.

Crypto

Blockchain: A shared, tamper-evident record of transactions kept by many computers at once. Each block links to the previous one with a cryptographic hash, so past records can't be quietly changed.
Market capitalisation: Price multiplied by the number of coins or tokens. A better way to compare crypto assets than the price of one coin.
Gas fee: The network fee paid to process a transaction on a blockchain such as Ethereum.
DeFi (decentralised finance): Financial services such as trading and lending run by smart contracts instead of companies. No company to call if something goes wrong.
Stablecoin: A cryptocurrency designed to maintain a stable value, usually by being pegged to a reserve asset such as a fiat currency or commodity.
Peg: A fixed exchange rate between a stablecoin and its reference asset. A peg can be maintained by collateral, algorithms, or both.
Collateralization: The practice of backing a stablecoin with reserves (cash, bonds, commodities, or crypto) of equal or greater value than the tokens issued.
Commodity-backed token: A digital token whose value is anchored to a physical commodity such as gold, silver, or oil — held as reserves or referenced by a price feed.
Oracle: A service that supplies external real-world data (like an oil price) to a blockchain or smart contract.
Bitcoin (BTC): The first and largest cryptocurrency by market capitalization. Often referenced alongside oil in macro analyses of inflation and store-of-value assets.
Ethereum (ETH): A leading smart-contract platform that powers most stablecoins and on-chain financial applications.
Tether (USDT): The largest fiat-pegged stablecoin by market capitalization, designed to track the U.S. dollar.
Smart contract: Self-executing code on a blockchain that automatically enforces the terms of an agreement when predefined conditions are met.

Safety

Private key: A secret number that proves you own the crypto at an address and lets you move it. Anyone with your private key controls your funds. Never share it.
Seed phrase (recovery phrase): Usually 12 or 24 words that can restore all the private keys in a wallet. Keep it offline and private; no legitimate company will ever ask for it.
Hardware wallet (cold wallet): A small device that keeps private keys offline and signs transactions without exposing them to your computer. Buy one directly from the maker.
Self-custody: Holding your own keys instead of leaving crypto with an exchange. Nobody can freeze your funds, but nobody can recover them if you lose your seed phrase.
Two-factor authentication (2FA): A second login step beyond your password. Authenticator apps and security keys are much safer than codes sent by text message.
Phishing: Fake messages or websites that imitate real companies to steal passwords, seed phrases or wallet approvals.
Wallet drainer: A malicious site or contract that tricks you into signing an approval, then moves the tokens out of your wallet.
Rug pull: When a project's creators abandon it and take the investors' money, often by removing the funds that let people sell the token.
Pump and dump: Hyping an asset to push its price up, then selling to the buyers who arrive late, leaving them with losses.
Ponzi scheme: A fraud that pays earlier investors with money from newer ones, presented as investment returns. It collapses when new money slows down.
Pig butchering scam: A scam where a stranger builds a friendship or romance online, then steers the victim into a fake crypto investment platform.
Recovery scam: A follow-up scam targeting people who already lost money, promising to recover it for an upfront fee.
KYC (Know Your Customer): Identity checks that regulated exchanges must carry out. An exchange that skips them entirely is often unregulated.

Markets

Drawdown: The fall from a peak to a low. After a 50% drawdown, an asset needs a 100% rise to get back to where it was.
Dollar-cost averaging (DCA): Investing a fixed amount on a regular schedule instead of all at once, which spreads out the price you pay.
Diversification: Spreading money across different kinds of assets so that one bad outcome doesn't sink everything.
Spot price: The current market price at which an asset can be bought or sold for immediate delivery.
Futures contract: A standardized agreement to buy or sell an asset at a predetermined price on a future date. Oil futures are the primary mechanism for crude price discovery.
Contango: A market condition where futures prices are higher than the spot price, often signaling expectations of rising prices or storage costs.
Backwardation: The opposite of contango — futures prices are lower than the spot price, often indicating tight current supply.
Petrodollar: U.S. dollars earned by countries through the sale of oil. The petrodollar system has historically anchored global oil trade to the dollar.
Volatility: A statistical measure of how much a price fluctuates over time. Both crude and crypto exhibit relatively high volatility versus traditional assets.
Correlation: A statistical relationship between two assets. BitOil tracks the long-running correlation (or lack thereof) between crude oil and Bitcoin.
Inflation hedge: An asset expected to retain or gain value when fiat currency loses purchasing power. Both gold and oil have historically been considered inflation hedges.
Liquidity: The ease with which an asset can be bought or sold without significantly affecting its price. Crude futures and major cryptocurrencies are among the world's most liquid markets.
Market maker: A firm or trader that continuously quotes both buy and sell prices for an asset, providing liquidity to the market.
KYC / AML: Know Your Customer and Anti-Money-Laundering — regulatory frameworks requiring financial businesses to identify users and prevent illicit activity.

Oil

WTI (West Texas Intermediate): A grade of crude oil used as a benchmark in oil pricing. Light, sweet, and primarily produced in the U.S., it is the underlying commodity of NYMEX oil futures.
Brent Crude: An international benchmark for oil pricing, sourced from the North Sea. Brent prices typically influence around two-thirds of the world's traded crude.
Barrel (bbl): The standard unit of measurement for crude oil. One barrel equals 42 U.S. gallons (about 158.99 liters).
OPEC+: The Organization of the Petroleum Exporting Countries plus allied non-member producers (notably Russia). Their coordinated output decisions strongly influence global oil prices.

BitOil

BitOil peg (research model): An indicative formula explored by BitOil: 1 BIT = the price of 1 barrel of WTI crude. This is a research concept, not a tradeable asset.
Micro BitOil (µBIT): One millionth of a BitOil (1 µBIT = 0.000001 BIT). Play BitOil rewards are counted in play µBIT, which is play money with no cash value.