Despite its popularity, many people don't keep up with it and are confused about what it is, and what its potentials are. Blockchain terminology can be difficult to understand, especially if you've only recently begun to navigate the confines of the new virtual world. This Blockchain Glossary covers the basics that you will find useful. Review the definitions and get ready to finally talk about blockchain like a pro.
ABI (Application Binary Interface) – An interface between two binary program modules, often one program is a library and the other is being run by a user.
Address – The public address of a private key. It is a collection of unique numbers and letters, which can also be represented as a QR code, that points to a specific destination.
Airdrop – A distribution of a cryptocurrency for free to numerous wallet addresses for marketing purposes.
Altcoin – An abbreviation of “Bitcoin alternative”. Altcoin is any cryptocurrency other than Bitcoin.
API (Application Programming Interface) – Part of a remote server that sends requests and receives responses.
ASIC (Application Specific Integrated Circuit) – A silicon chip specifically designed to do a specific single task, like for example mining. ASICs are considered to be much more efficient than conventional hardware CPUs and GPUs. Added recently to our Blockchain Glossary.
Atomic Swap – A smart contract technology enabling the exchange of one cryptocurrency for another without using centralized intermediaries.
Attestation Ledger – Is used to show a receipt of the transaction to prove the authenticity of a cryptocurrency transaction and to verify that a transaction has been completed.
Bitcoin – The first, and most popular, cryptocurrency based off the decentralized ledger of a blockchain. Bitcoin was created in 2009 by Satoshi Nakamoto, which is a pseudonym for an individual or a group whose real identity remain unknown.
Block – A record that stores transactional data.
Block Reward – The reward given to a miner or validator after he has successfully hashed a transaction block. Added recently to our Blockchain Glossary.
Blockchain – A mathematical structure for storing digital transactions in an immutable, peer-to-peer ledger that is practically impossible to fake and yet remains accessible to anyone.
Blockchain 1.0 – The generation of blockchain technology that focused on performing simple token transactions.
Blockchain 2.0 – The generation of blockchain technology that enabled smart contracts and generalized processing on chain.
Blockchain 3.0 – The generation of blockchain technology that focuses on scalability and interoperability.
Burning – Cryptocurrencies are sent to a wallet that can only receive them and not send them. It is done with the purpose of reducing the number of tokens - the fewer tokens in circulation, the more valuable the ones investors hold become.
Byzantium Fork Tolerance – A distributed, decentralized system to resist complete failure even when some of the nodes fail or act maliciously.
Burning crypto means permanently removing a number of tokens from circulation
Chain Linking – The process of connecting two blockchains with each other, thus allowing transactions between the chains to take place.
Chain of Custody (CoC) – The complete history of ownership. A chain of custody helps prove data integrity and tamper-proof protections.
Chaincode – Another name for a smart contract.
Cloud Mining – Classical mining requires huge investments in hardware and electricity. Cloud mining companies aim to make mining accessible to everybody. People can log in to a website which already has mining datacenters.
Coin – Representation of a digital asset built on a new blockchain
Cold Wallet (Cold Storage) – A component of hardware that enables investors to access crypto-asset holdings.
Confirmation – The determination of how immutable the information in a blockchain is. Under a Proof of Work (PoW) consensus mechanism, this happens through a process known as mining; under Proof of Stake (PoS), the process is known as validation.
Consensus – The process used by a group of peers, or nodes, on a blockchain network to agree on the validity of transactions submitted to the network.
Constantinople Fork – One of the "hard forks" made to the Ethereum network. Added recently to our Blockchain Glossary.
Crosschain – The interoperability between two relatively independent blockchains.
Crypto Asset – A digital asset, which may be a medium of exchange, for which generation or ownership records are supported through a blockchain technology.
Cryptocurrency – Digital money which uses encryption and consensus algorithms to regulate the generation of coins/tokens and the transfer of funds.
Cryptocurrency Agnostic – Projects that are built to work with a multitude of tokens, which allow users from different ecosystems to participate.
Cryptography – A method for secure communication using code.
Cryptojacking – A secret use of a device to mine cryptocurrency.
DAO (Decentralized Autonomous Organization) – A powerful and very flexible organizational structure built on a blockchain. DAO is run through smart contracts.
DApp – A software which does not rely on a central system but can share information amongst its users via a decentralized database, such as a blockchain.
Decentralization – The transfer of authority from a centralized organization, government, or party to a distributed network.
DeFi (Decentralized Finance) – Any financial tool, like a smart contract or DAO, that uses blockchain technology to circumvent middleman institutions.
DEX (Decentralized Exchange) – A platform for exchanging cryptocurrencies with transactions that circumvent any centralized authority.
Digital Asset – A digital commodity that is electronically transferable and intangible with a market value.
Digital Share – Shares that have the same properties as paper shares, just that they are recorded in electronic form. An example of a digital share is a security token WCRU.
Distributed Ledger – A database held independently by each participant (or node) in a large network.
Double Spending – A unique problem to cryptocurrency where the same coins or tokens are spent or traded twice. Bitcoin is the first to implemented a solution in 2009 which protects against double spending by verifying each transaction added to the blockchain.
WCRU, a digital share
ERC-20 – The technical standard for fungible tokens created using the Ethereum blockchain.
ERC-721 – Another standard for Ethereum smart contracts, which allows for the issuance of a NFTs (Non-fungible tokens).
Ethereum – A decentralized Blockchain 2.0 chain. It was the first major smart contract platform.
Exchange – A business that provides a convenient online location for the exchange of cryptocurrencies, or to exchange traditional fiat currencies with cryptocurrencies. Cryptocurrency exchanges include Binance, Coinbase, Kraken, UnitEx and many others.
Fork – Creates an alternative version of a blockchain, and are often enacted intentionally to apply upgrades to a network. Forks alter data in a public blockchain.
Fork (Hard) – Change transaction data structures, consensus algorithms, or add/remove blocks that would not have otherwise been included.
Fork (Soft) – Blocks created on the original chain after a soft fork would be valid on the forked chain.
FUD (Fear - Uncertainty - Doubt) – It can be legitimate, like people airing concerns about a token or NFT project's legitimacy, or tactical, as in an organized move that encourages people to sell, lowering the price of the asset.
Fungible – The property an item of being exchangeable with other like items. From a cryptocurrency perspective, each coin or token is fungible as each one has the same value.
Gas – Measures how much work an action takes to perform in ethereum.
Genesis Block – The initial block of data computed in the history of a blockchain network. It is the prototype of all other blocks in the blockchain as the common ancestor of them.
Governance Tokens – Cryptocurrencies that give the owner voting rights over the given project.
Gwei – A minuscule and common denomination of ETH, and the unit in which Gas prices are often specified.
Halving – A reduction in the block reward given to crypto-currency miners once a certain number of blocks have been mined.
Hardware Wallet – A physical device that can be connected to the web and interact with online exchanges, but can also be used as cold storage if not connected to the internet.
Hashing – A mathematical function that miners perform on blocks to make the network secure.
HODL – A purposeful misspelling of "hold", used to encourage people to hold onto their tokens during a downward price movement.
Hot Wallet – Is directly connected to the internet at all times. Hot wallets have lower security than cold storage systems or hardware wallets.
Hybrid Blockchain – A mix of public and private blockchains. Added recently to our Blockchain Glossary.
Hyperledger – A suite of tools offered by IBM and hosted by The Linux Foundation to create enterprise-level consortium chains.
A hardware wallet is a portable key to access your crypto assets safely from anywhere
ICO (Initial Coin Offering) – The form in which capital is raised to fund new cryptocurrency ventures. Modeled after an Initial public offering (IPO). As ICO have been a vehicle for fraud, are now subject to ever-evolving regulation and legislation.
Immutable – Data stored in a blockchain is unable to be changed.
IPFS (Inter-Planetary File System) – A protocol and P2P network for storing and sharing data in a distributed file system.
Ledger – A record used to track transactions. In blockchain, ledgers are distributed across many nodes within a blockchain network.
Lightning Network – A series of off-chain payment channels where two people can conduct a lightning fast low-cost transactions, which are later settled on-chain.
Liquid Market – A liquid market features a large number of buyers and sellers. It is a platform where all the trades are executed with ease and at a low cost.
Lightning Network - lightning fast low-cost transactions between two parties
Mainnet – The production version of a blockchain.
Market Cap (Market capitalization) – Market Cap is the price of an asset multiplied by circulating supply represents the total value of a given asset and its market. It is often used as a measurement of a project's success.
Merkle Tree (Hash Tree) – A tree in which every leaf node is labelled with the hash of a data block and every non-leaf node is labelled with the cryptographic hash of the labels of its child nodes.
MetaMask – An online digital wallet used primarily for transactions on the ethereum blockchain.
Metaverse – A digital world frequented by thousands of users at once. Blockchain-integrated metaverses, like Decentraland, allow people to own the land, buildings and items within these worlds, and sell or trade them. Added recently to our Blockchain Glossary.
Mining – The process of creating a new block and submitting it to the blockchain. In order to verify a block a miner must use a computer to solve a cryptographic problem. Miners collect transaction fees and are rewarded for their services.
NFT (Non-Fungible Tokens) – A token that is a unique digital asset and has no equal token. This is in contrast to cryptocurrencies like ether that are fungible in nature.
Node (Full) – Any kind of device such as a computer, laptop, or server that connects to the blockchain network. It stores, spreads, and preserves the blockchain data.
Node (Light) – A node that has enough block data to validate the chain but lacks the complete state data for each block.
Nonce (Number Only Used Once) – A random number that is generated to create an encrypted block that connects to a blockchain. It is the first number a blockchain miner looks for when mining cryptocurrency.
Off-chain – A storage mechanism where transaction data is stored outside the blockchain in a nonpublic location, and are more "private" and faster than on-chain alternatives.
Ommer (Uncle) – A block which has been completely mined but has not yet been added to the Blockchain.
Oracles – Services (entity or person) that connect real-world data with blockchain applications. They find and verify real-world occurrences and submit this information to a blockchain to be used by smart contracts.
Orphan Block – A validated block that is not accepted into the blockchain network due to a time lag in the acceptance of the block in question into the blockchain.
P2P (Peer-to-peer) – Interactions that happen between two separate individuals. On a blockchain network individuals are able to transact with each other without relying on an intermediary or single point of failure.
PoA (Proof of Authority) – A consensus mechanism used in private blockchains, granting a single private key the authority to generate all of the blocks or validate transactions.
PoS (Proof of Stake) – A consensus algorithm that asks users to prove ownership of a certain amount of currency that is their stake in the currency.
PoW (Proof of Work) – In a PoW algorithm, the miners compete against each other to validate a block and the first miner who presents validation for a block gets rewarded.
PoS/PoW Hybrid – A consensus model that utilizes a combination of Proof of Stake (PoS) and Proof of Work (PoW) consensus. Using this consensus mechanism, blocks are validated from not only miners, but also voters/stakeholders to form a balanced network governance. Added recently to our Blockchain Glossary.
Private Blockchain – Has a closed network where participants are controlled by a single entity. Private blockchains require a verification process for new participants.
Private Key – A cryptography allowing a user access to his or her cryptocurrency or transaction. It is equivalent to a password.
Public Blockchain – A globally open network where anyone can participate in transactions, execute the consensus protocol, and maintain the shared ledger.
Public Key – Is obtained and used by anyone to encrypt messages before they are sent to a known recipient with a matching private key for decryption.
Public Key Cryptography – Encryption that uses two mathematically related keys. A public and private key.
Private key is also known as a Secret key
Relayer – An individual or organization that hosts an off-chain ledger and works as a transaction intermediary between the sender and receiver.
Ring Signature – A cryptographic technology that provides a decent level of anonymization on a blockchain. It is a private-key-based signature that can`t be decrypted using multiple valid keys.
Rug Pull – A scam. The creators of a cryptocurrency vanish, taking funds with them.
SEC (Securities and Exchange Commission) – The US government regulatory agency charged with supervision over the securities and investment instruments market, and the protection of the investing public.
Security Token – As an investment asset, a security token is a digital asset that represents ownership or other rights and transfers value from an asset or bundle of assets to a token. In plain language, security tokens are the digital form of traditional investments like stocks, bonds, or other securitized assets.
Seed Phrase – A random sequence of words which can be used to restore a lost wallet.
Sharding – Dividing a blockchain into several smaller component networks called shards capable of processing transactions in parallel.
Sidechain – A disconnected blockchain created with the purpose of linking to a primary blockchain, so increasing the speed and scalability of the blockchain network.
Smart Contract – A computer code within blockchain that automatically moves digital assets according to pre-specified rules.
Soft Fork – A change to the bitcoin protocol that makes only previously valid blocks or transactions invalid.
Stablecoin – A cryptocurrency which is underwritten by an asset (fiat money, commodities, etc.) designed to minimize the volatility of the price of the token. Examples of stablecoins are USDT, USDC, BUSD, USDU.
Staking – A way of earning rewards for holding certain cryptocurrencies.
STO (Security Token Offering) – The token is officially classified as a security, and the token is sold to accredited investors through a regulated exchange. STOs are registered with the SEC.
A smart contract is an agreement between two entities in the form of computer code programmed to execute automatically
Testnet – A staging blockchain environment for testing application before being put into production.
Token – The base unit of a cryptocurrency. A token is the lowest unit possible, and it cannot be divided further.
Token Type - ERC-20 – A type of fungible Ethereum token standard which is defined by a series of functions that must be supported. ERC-20 token has many copies which are held in a variety of crypto wallets.
Token Type - ERC-721 – A type of non-fungible Ethereum token standard which is defined by a series of functions that must be supported. Each ERC-721 token is unique and non-interchangeable with other tokens.
Tokenomics – It describes the factors that impact a token's use and value, including the token's creation, distribution, supply, demand, and token burn schedules. Added recently to our Blockchain Glossary.
TPS (Transactions Per Second) – A measurement of the speed of a blockchain.
Transaction Block – Transactions on a blockchain, gathered into a set or a block that can then be hashed and added to the blockchain.
Unconfirmed Transaction – A transaction is still in the process of being verified. Depending on the blockchain network, transactions can be in an unconfirmed state for seconds, minutes, hours or even days.
Utility Token – A special type of token that helps in the capitalization of projects for startups, or project development groups. An example of a utility token is UNTB.
Valid Block – When its hash has a value that's less than the one that preceded it.
Validator – A participant in Proof of Stake (PoS) consensus.
Virtual Currency – A digital representation of value that is used as a medium of exchange and a store of value used mostly as a way for people to track, store, and send payments over the Internet.
Vitalik Buterin – One of the creators behind the ethereum blockchain.
Volatility – The amount and frequency of fluctuations in the price of a cryptocurrency. Added recently to our Blockchain Glossary.
Vyper – A programming language for the Ethereum blockchain built for security, language and compiler simplicity.
Wallet – A designated storage location for digital assets (cryptocurrency) that has an address for sending and receiving funds. Every wallet in a blockchain network has a unique address to identify it.
Web3 – Refers to the blockchain and decentralized technology ecosystems as a whole. Added recently to our Blockchain Glossary.
Whale – A slang term used to describe big players in the cryptocurrency markets, from institutional investors to wealthy individuals or hedge funds.
Whisper – Part of the Ethereum P2P protocol suite that allows for messaging between users via the same network that the blockchain runs on.
Whitelist – A presale list for cryptocurrencies and NFTs. Whitelisted investors can buy the asset before public launch, normally for a discounted price.
Michael Saylor, a bitcoin`s whale
If there is a term you were looking for and you don't see it, you can submit it here and we will add it to our Blockchain Glossary.