Blockchain & Web3 glossary

Airdrop

A free distribution of tokens or cryptocurrency to wallet users, usually to promote a project or reward early users, and also a frequent vehicle for scams.

Beginner

Altcoin

Any cryptocurrency other than Bitcoin; a catch-all name for thousands of other coins and projects, each with different goals, technology, and risk.

Beginner

Blockchain

A digital ledger that stores data in linked blocks and is copied across thousands of computers, which makes it practically hard to alter.

Beginner

Blockchain Node

A computer that runs a blockchain network's software, keeps a copy of the ledger, and checks and relays transactions and blocks.

Intermediate

CBDC (Central Bank Digital Currency)

The digital form of a country's official money, issued and backed directly by its central bank and fundamentally different from decentralized crypto like Bitcoin.

Intermediate

CEX (Centralized Exchange)

A company-run platform for buying, selling, and converting cryptocurrencies that itself manages and holds users' accounts and assets.

Beginner

Coin vs Token

A coin is a currency with its own independent blockchain, while a token is an asset built on an existing blockchain, usually through a smart contract.

Beginner

Cold Wallet

A wallet that keeps private keys offline and separate from the internet, such as a hardware device or paper, making it safer against hackers.

Beginner

Cross-Chain Blockchain Bridge Cross-Chain Interoperability Bridge

A communication protocol facilitating the transfer of crypto tokens and arbitrary messages between structurally isolated blockchain networks.

Advanced

Crypto Wallet

An app or device that holds your private keys and lets you view, receive, and send digital assets on the blockchain.

Beginner

Cryptocurrency

Digital money secured by cryptography, usually recorded and transferred on a blockchain without a bank or central authority managing it.

Beginner

Cryptocurrency Mining

A process in which computers solve computational puzzles to validate network transactions and create new blocks, earning a reward in return.

Beginner

Cryptographic Merkle Tree MerkleTree

A cryptographic tree data structure where leaf nodes represent data hashes and non-leaf nodes contain cryptographic hashes of their children.

Advanced

DAO (Decentralized Autonomous Organization)

An organization whose rules are written in smart contracts and whose members decide on budgets and decisions by voting on a blockchain.

Advanced

Decentralization

A structure in which control and decision-making are spread across many participants, so no single company or body holds everything.

Beginner

Decentralized Blockchain Oracles (Chainlink) Decentralized Oracles · Chainlink

Third-party services providing tamper-proof external data feeds (market prices, IoT sensor data, weather) to isolated blockchain smart contracts.

Advanced

DeFi (Decentralized Finance)

A set of financial services, such as lending and trading, delivered by smart contracts on a blockchain with no need for a bank or traditional intermediary.

Intermediate

DEX (Decentralized Exchange)

A platform for trading crypto directly through smart contracts, without a company or intermediary taking custody of your assets.

Intermediate

ERC-4337 Account Abstraction

An Ethereum standard turning wallets into programmable smart contracts, unlocking social recovery, gas sponsorships, and batch operations without consensus hard forks.

Advanced

Ethereum Virtual Machine (EVM) Ethereum Virtual Machine · EVM

The decentralized runtime environment executing smart contract bytecode deterministically across thousands of participating Ethereum network nodes.

Advanced

Gas Fee

The fee you pay to run a transaction or smart contract on a network like Ethereum, which varies with network congestion and operation complexity.

Intermediate

Halving

A pre-programmed event in some networks, like Bitcoin, in which the miner reward is cut in half at set intervals so new coins are produced more slowly.

Intermediate

InterPlanetary File System (IPFS) InterPlanetary File System · IPFS

A peer-to-peer distributed hypermedia protocol using content addressing (CIDs) to store and share data across a decentralized network.

Intermediate

KYC (Know Your Customer)

The process by which a financial service verifies a user's identity, usually with ID documents and a face image, to comply with anti-money-laundering rules.

Beginner

Layer 2

A network or technology built on top of a main blockchain that does much of the transaction work off that chain for higher speed and lower fees.

Advanced

Layer-2 Blockchain Scaling Layer-2 Scaling Rollups · L2

Secondary protocols built on top of primary blockchains (Layer 1) to drastically increase transaction speed and lower fees while inheriting base-layer security.

Intermediate

NFT (Non-Fungible Token)

A unique token on a blockchain that records ownership of a digital asset such as an image, song, or game item and cannot be swapped one-for-one with another token.

Beginner

Non-Fungible Tokens (ERC-721 & ERC-1155) Non-Fungible Tokens · ERC-721/1155 · NFT

Unique cryptographic tokens on decentralized ledgers representing indivisible ownership of digital art, game items, or physical assets.

Intermediate

Private Key

A long, secret string of digits and letters that proves ownership of your digital assets and is needed to sign every transaction.

Intermediate

Proof of Humanity & World ID Protocol WorldID

A decentralized identity protocol verifying unique human existence through zero-knowledge cryptography, preventing bot and Sybil manipulation.

Intermediate

Proof of Stake (PoS)

A blockchain consensus mechanism in which validators earn the right to confirm blocks by locking up part of their assets, without heavy mining.

Intermediate

Proof of Stake (PoS) Consensus Proof of Stake Consensus

A blockchain consensus mechanism where validators are selected to propose and finalize blocks proportionally to their staked cryptocurrency assets.

Intermediate

Proof of Work (PoW)

A blockchain consensus mechanism in which participants earn the right to add a new block by spending computing power and energy.

Intermediate

Rug Pull

A scam in which the creators of a crypto project take investors' money and suddenly withdraw the assets and disappear.

Intermediate

Seed Phrase

A list of 12 or 24 words that can rebuild all of your wallet's private keys; whoever holds this list effectively owns your assets.

Beginner

Smart Contract

A program stored on a blockchain that runs automatically, with no intermediary, once pre-set conditions are met.

Intermediate

Smart Contract Gas Optimization GasOpt

Techniques and architectural patterns in Solidity that minimize execution compute and storage footprints on the Ethereum Virtual Machine.

Advanced

Smart Contracts (EVM Execution) Smart Contracts · EVM Execution · SmartContract

Self-executing digital programs stored on decentralized blockchains that automatically verify and enforce contractual terms without intermediaries.

Intermediate

Soulbound Tokens (SBT) Soulbound Tokens · Web3 Identity

Non-transferable digital identity tokens permanently bound to a Web3 wallet, representing educational credentials, employment history, and reputation.

Intermediate

Stablecoin

A type of cryptocurrency designed to keep its value roughly steady against a reference asset, usually a national currency such as the US dollar.

Beginner

Web3

A vision of a next-generation internet built on blockchain, where users rather than big companies own their data, identity, and digital assets.

Beginner

Web3 Non-Custodial Wallet NonCustodial

A cryptocurrency wallet giving users exclusive control over their cryptographic private keys and blockchain assets without relying on centralized intermediaries.

Intermediate

Zero-Knowledge Rollup (ZK-Rollup) Zero-Knowledge Rollup Scaling

A Layer-2 blockchain scaling solution executing transactions off-chain and posting succinct cryptographic zero-knowledge proofs to the base layer.

Advanced