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Glossary

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Navigating the ever-evolving landscape of Blockchain technology and Web3 can be a daunting task, whether you're an enterprise seeking to modernize your operations or an individual looking to pivot into the industry. A myriad of jargon and complex terminologies can easily overwhelm even the most tech-savvy among us. That's why we've created this comprehensive Blockchain and Web3 Glossary, designed to be your one-stop guide to understanding the A-Z of the decentralized world.

Our glossary is meticulously crafted by industry experts who live and breathe these technologies. We continuously update this repository of knowledge to ensure you stay ahead of the curve.

0

• 51% Attack
  A scenario where more than half of the computing power in a blockchain network is controlled by a single entity or group, allowing them to control and manipulate the network's transactions.

A

• Airdrop
  The process of distributing tokens, generally in order to engage potential users in a network.
  

• Algorithm
  A set of rules and instructions that are followed to solve problems in computing, often used in the context of cryptographic algorithms that secure blockchain networks.

• Altcoin
  Any cryptocurrency other than Bitcoin.

• AML (Anti-Money Laundering)
  Legal and regulatory measures to prevent and detect money laundering activities, relevant in crypto space to ensure the legality of transactions.

• API (Application Programming Interface)
  A set of rules and protocols that allow different software applications to communicate with each other, widely used in crypto for integrating various services.

• ASIC (Application-Specific Integrated Circuit)
  A type of hardware system designed to perform a specific task, in crypto, it often refers to hardware systems designed for mining.

• Atomic Swap
  A technology that enables the direct peer-to-peer exchange of one cryptocurrency for another without needing to go through a centralized exchange.

• Automated Market Maker (AMM)
  A type of decentralized exchange protocol that relies on mathematical formulas to price assets, replacing traditional order books with liquidity pools that automatically execute trades based on set criteria.

B

• Bounties
  Rewards offered for performing various tasks in the crypto ecosystem, such as identifying bugs, creating content, or enhancing a project’s features.
  
  
• Blockchain
  A decentralized and distributed digital ledger used to record transactions across many computers in a secure, transparent, and tamper-resistant manner.
  
  
• Block Explorer
  An online tool that is used to view all transactions that have taken place on the blockchain, including transaction histories of a given address.

• Block Height
  The number of blocks preceding the genesis block (first block) on the blockchain; it represents the total number of blocks in a blockchain.
  
  
• Block Reward
  ‍The reward that miners receive for successfully mining a block on the blockchain, usually consisting of newly minted cryptocurrency tokens and transaction fees.
  

• Burning
  The process of permanently removing tokens from circulation, reducing the total supply, generally to increase scarcity and potentially boost value.
  
  
• Byzantine Fault Tolerance (BFT)
  A property of a system that allows it to reach consensus even when some nodes in the system are functioning maliciously, based on the Byzantine Generals' Problem.
  
  

C

• CBDC (Central Bank Digital Currency)
  A digital or virtual currency issued by a central bank, representing a government's official currency in the digital form.
  
  
• Centralized Exchange (CEX)
  A type of cryptocurrency exchange that is operated by a central authority, where users transact with the intermediary rather than directly with each other.
  
  
• Chainlink
  A decentralized oracle network that enables smart contracts on Ethereum to securely connect to external data sources, APIs, and payment systems.
  
  
• Cipher
  An algorithm for performing encryption or decryption—a series of well-defined steps that can be followed as a procedure, generally used to secure data.
  
  
• Circulating Supply
  The total number of tokens or coins that are publicly available and circulating in the market.
  

• Cold Storage
  A security measure for storing cryptocurrencies in a wallet not connected to the internet, protecting them from unauthorized access, cyber hacks, and other vulnerabilities that a system connected to the internet is susceptible to.
  
  
• Commit-Reveal Scheme
  A cryptographic primitive that allows a user to commit to a chosen value while keeping it hidden from others, with the ability to reveal the committed value later.
  

• Consensus
  A general agreement among various nodes in a blockchain network on the state of the data on the network, helping to keep the network secure and uniform.

• Consensus Mechanism
  A protocol used in blockchain networks to reach agreement about the state of the blockchain, with common examples including Proof of Work (PoW) and Proof of Stake (PoS).
  
  
• Cross-Chain
  A technology that enables interaction and interoperability between different blockchain networks, allowing them to share information and value.
  
  
• Crypto-to-Crypto Exchange
  A type of cryptocurrency exchange that allows users to trade one cryptocurrency for another without using fiat currencies.
  
  
• Cryptocurrency
  A type of digital or virtual currency that uses cryptography for security and operates independently of a central authority or government.
  
  
• Cryptography
  The practice and study of techniques for secure communication in the presence of third parties called adversaries, a fundamental aspect of cryptocurrency.

D

• DAO (Decentralized Autonomous Organization)
  An organization represented by rules encoded as a computer program that is transparent, controlled by organization members, and not influenced by a central government.
  
  
• DApp (Decentralized Application)
  An application that runs on a blockchain or P2P network of computers instead of a single computer, offering open-source capabilities and incentivization through cryptographic tokens.
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• Dark Web
  A part of the internet that is not indexed by traditional search engines and is not accessible through standard browsers, often associated with illegal activities, including in the crypto space.
  
  
• DeFi (Decentralized Finance)
  A financial system built on top of blockchain networks that uses smart contracts to create and manage financial instruments, which are transparent and open to everyone.
  
  
• Delegated Proof-of-Stake (DPoS)
  A consensus mechanism where a limited number of elected entities (nodes) are responsible for validating transactions and creating new blocks.
  
  
• Derivative
  Financial contracts that derive their value from an underlying asset, which can be an interest rate, equity, commodity, or a cryptocurrency.
  
  
• DEX (Decentralized Exchange)
  A peer-to-peer (P2P) marketplace that connects cryptocurrency buyers and sellers to trade directly with each other without a middleman.
  
  
• Digital Signature
  A cryptographic tool that verifies the authenticity and integrity of a digital document or a transaction, providing a secure way of signing digital information.
  
  
• Distributed Ledger
  A type of database that is shared, replicated, and synchronized among the members of a network, where the records are stored in more than one place.
  
  
• Double Spending
  A potential flaw in a digital cash scheme where a single token can be spent more than once, which blockchain technology aims to prevent by verifying each transaction in a decentralized manner.
  
  
• Dust Attack
  A type of attack where a relatively insignificant amount of cryptocurrency (dust) is sent to a large number of addresses to de-anonymize the recipients and potentially link the individual addresses to their owners.

E

• Encryption
  The process of converting information or data into a code to prevent unauthorized access, a fundamental security mechanism in blockchain technology.
  
  
• ERC-20
  A standard for creating and issuing smart contract on the Ethereum blockchain, widely used for the development of tokens in various decentralized applications.
  
  
• Ethereum
  An open-source blockchain platform that allows developers to build decentralized applications (dApps) using smart contracts.
  
  
• Exchange
  A marketplace where buyers and sellers can trade cryptocurrencies, can be centralized or decentralized.
  

F

• Fiat Money
  Currency that a government has declared to be legal tender, which is not backed by a physical commodity; the value of fiat money is derived from the relationship between supply and demand.

• Fork
  A split in the blockchain into two separate chains, either due to a change in protocol (hard fork) or a temporary divergence (soft fork).
  
  
• Front Running
  The unethical practice of executing orders or trades while having access to non-public, market-moving information, a concern in the crypto space as well.

G

• Gas
  A measure of computational work required to process transactions and run dApps on the Ethereum network; users pay gas fees to incentivize miners to include their transactions in the blockchain.
  

• Governance Tokens
  These tokens give holders the right to vote on decisions affecting the parameters of a specific blockchain or decentralized application (dApp).

H

• Halving
  A pre-programmed event in the cryptocurrency world where the rewards for mining new blocks are halved, effectively reducing the rate at which new tokens are generated.
  
  
• Hard Fork
  A type of fork that creates a permanent divergence from the previous version of the blockchain; nodes running the old version will not be accepted by the new version, creating a split into two separate networks.
  
  
• Hash
  A function that converts an input (or 'message') into a fixed string of bytes, commonly used in blockchain to secure data.
  
  
• Hash Rate
  The measuring unit of the processing power of the Bitcoin network. It refers to the speed at which miners are able to perform hash functions.
  
  
• Hot Wallet
  A cryptocurrency wallet that is connected to the internet, which facilitates quick and easy transactions but is potentially less secure compared to a cold wallet.

I

• ICO (Initial Coin Offering)
  A type of crowdfunding mechanism where new cryptocurrencies are sold to investors to raise capital for a new blockchain project, similar to an initial public offering in the stock market.
  
  
• Immutable
  Unchangeable; in the context of blockchain, it refers to the characteristic where once data has been recorded on the blockchain, it cannot be altered.
  
  
• Interoperability
  The ability of different systems or platforms to work together and share information, in blockchain context, it refers to the ability of different blockchain networks to integrate and work together.

J

K

L

• Layer 2
  A secondary framework or protocol that is built on top of an existing blockchain network to improve its scalability and efficiency.
  
  
• Lightning Network
  A "Layer 2" payment protocol that operates on top of a blockchain-based cryptocurrency (like Bitcoin) to enable fast, scalable, and low-cost transactions.
  
  
• Liquidity
  The ease with which an asset or a security can be bought or sold without affecting its price; in crypto markets, it refers to the ability to quickly buy or sell a cryptocurrency without causing a significant price change.
  
  
• Liquidity Mining
  A decentralized finance (DeFi) practice where users provide capital to a liquidity pool to earn rewards, which are usually in the form of tokens.

M

• Mainnet
  The main network where the blockchain protocol operates and where the transactions of a digital asset officially take place after testing phases on testnets have concluded.
  
  
• Mempool
  The area where all the pending transactions wait to be validated and added to the blockchain by miners in a Bitcoin network.
  
  
• Merkle Tree
  A data structure used in computer science and cryptography to securely verify the content of data blocks in cryptocurrencies through a series of hash functions.
  
  
• Mining
  The process of using computer power to solve complex mathematical problems, which in turn validates and secures transactions on a blockchain network, miners are rewarded with cryptocurrency for their efforts.
  
  
• Mining Pool
  A group of miners that combine their computational resources to increase their chances of solving the mathematical problems and receiving rewards, which are then distributed among the pool members.
  
  
• Multisignature (Multisig)
  A digital signature scheme that allows a group of users to sign a single document, often used in cryptocurrency transactions to increase security.
  

N

• Node
  A computer connected to the blockchain network, which supports the network through validation and relaying of transactions, maintaining a copy of the blockchain.
  
  
• Non-Fungible Token (NFT)
  Unique digital assets verified using blockchain technology, representing ownership or proof of authenticity of a unique item, usually a digital representation of art, collectibles, or real estate.

O

• Oracles
  Data feeds that connect blockchains to external data sources, allowing smart contracts to interact with data outside of their network, providing more functionality to blockchain networks.
  

P

• Peer-to-Peer (P2P)
  A decentralized network where individual nodes can communicate directly with each other without needing a centralized server or authority.
  
  
• Private Key
  A secret, alphanumeric password used to access and manage one's cryptocurrency wallet. It should be kept confidential to ensure the security of the assets.
  
  
• Proof of Stake (PoS)
  A consensus mechanism that selects the creator of a new block based on their stake or holding in the cryptocurrency, promoting energy efficiency.
  
  
• Proof of Work (PoW)
  A consensus mechanism in which miners compete to solve complex mathematical problems, with the first to solve it getting to add a new block to the blockchain and receiving a reward.
  
  
• Protocol
  A set of rules governing how data is transmitted over a network, which defines the method and language that devices must follow to communicate with each other.
  
  
• Public Key
  Derived from a private key, it is used as an address where others can send cryptocurrency to the wallet associated with the key, functioning similarly to a bank account number.
  
  
• Pump and Dump
  A fraudulent practice where the price of a cryptocurrency is artificially inflated to attract unsuspecting investors, and then sold off for a profit, causing the price to crash.

Q

R

• Replay Attack
  A network attack where valid data transmission is maliciously or fraudulently repeated or delayed, potentially used to double-spend in a cryptocurrency transaction.

S

• Satoshi Nakamoto
  The pseudonymous person or group of people who developed Bitcoin, the first cryptocurrency.
  
  
• Scalability
  The ability of a network or blockchain to handle a larger number of transactions as it grows, maintaining performance and security.
  
  
• Seed Phrase
  A set of words that can be used to recover a cryptocurrency wallet. It is a physical representation of a user's private keys and should be kept extremely secure.
  
  
• SegWit (Segregated Witness)
  An implemented soft fork change in the transaction format of Bitcoin to increase block size limit and improve scalability.
  
  
• Sharding
  A method to increase the number of transactions that a blockchain can process at one time by splitting the database into smaller pieces, each of which is managed by different server networks.
  
  
• Smart Contract
  Self-executing contracts with the terms of the agreement directly written into code. They automatically implement and verify the contract terms when certain conditions are met, minimizing fraud and the need for intermediaries.
  
  
• Stablecoin
  A type of cryptocurrency that is designed to have a stable value, as opposed to the highly volatile nature of most cryptocurrencies, by being pegged to a reserve or a basket of assets.
  
  
• Staking
  The process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. Cryptocurrency holders can earn rewards for validating transactions and helping to maintain the network.

• Security Tokens
  ‍These represent ownership of an underlying asset, such as shares in a company, and are subject to federal securities regulations.

T

• Testnet
  A sandbox version of the blockchain where developers can test and experiment without risking the assets or stability of the main network (mainnet).
  
  
• Token
  A unit of value issued by a blockchain project, representing a unit of value in the network. Tokens can have various uses including representing assets or being used in smart contracts.
  
  
• Transaction Fee
  A fee that is charged to users when they make transactions on a blockchain network. The fee is usually a compensation to miners or validators for their efforts in maintaining the network.

U

• Utility Tokens
  ‍These are tokens that provide users with access to a product or service within a specific ecosystem. They are not designed for investment.

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V

W

• Wallet
  A digital tool that allows users to store, manage, and transfer cryptocurrencies. Wallets are secured with cryptographic keys, including a public and a private key.
  
  
• Whale
  A colloquial term used to describe individuals or entities that own a substantial amount of a cryptocurrency, and have the power to manipulate currency valuations.
  
  
• White Paper
  A comprehensive report or guide informing readers concisely about a complex issue, often used to convey the philosophy, functioning, and technical specifics of a blockchain project.
  
  
• Wrapped Tokens
  Tokens that are issued on a blockchain that represents a 1:1 peg to a specific cryptocurrency on another blockchain, facilitating smoother transactions and interoperability between different blockchain platforms.

X

Y

• Yield Farming
  A practice in the DeFi sector where users can earn rewards by lending or borrowing cryptocurrency assets; a strategy to maximize the rate of return on capital by leveraging different DeFi protocols.

Z

• Zero-Knowledge Proofs
  A cryptographic principle where one party (the prover) can prove to another party (the verifier) that a given statement is true, without conveying any information apart from the fact that the statement is true.

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