Blockchain Glossary

Your knowledge base for all the Blockchain terminology to get you started in your crypto journey!

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Z

A

Accumulation/Distribution Indicator
It is a method of analysing the supply/demand trends of an asset , including cryptocurrency, by using its closing price and supply volume. Investors prefer an accumulation/distribution line which moves in the opposite direction of the price of a cryptocurrency.
Adam Back
He is a lauded cryptographer and cypherpunk. He is the Co founder and CEO of Blockstream and the inventor of Hashcash.
Address
In the context of cryptocurrency, an address is a unique string of characters that denotes the location of an user’s cryptocurrency wallet on the blockchain, and acts as its identifier. Crypto wallets are used to send and receive payments.
Airdrop
Airdrops are used to send newly launched virtual currencies to user wallets in order to spread awareness about them and for marketing purposes.
Algorithmic Market Operations (AMOs)
This is an algorithm based, automatic method of controlling the supply of stablecoins , in contrast to other methods such as minting and burning. AMOs help reduce the price volatility of a coin and increase it’s transparency, decentralization and scalability.
Algorithmic Stablecoin
Stablecoins which use AMOs to regulate their supply are known as algorithmic stablecoins.
All-Time-High (ATH)
Highest historical value of a cryptocurrency in terms of its price or market capitalization.
All-Time-Low (ATL)
Lowest historical value of a cryptocurrency in terms of its price or market capitalization.
Altcoin
All crypto currencies other than Bitcoin are grouped under the category of Altcoins.
Anti Dump/ Anti Dumping policy
These policies are put in place by crypto exchanges to prevent fradulendent pump and dump activities where whale investors buy huge amounts of cryptocurrency in order to cause an initial rise in it’s price, subsequently selling their entire investment for a large profit.
Anti Money Laundering (AML)
These policies framed by government organizations are aimed at preventing criminal money laundering activities through crypto currency.
Ashdraked
This refers to a situation where a crypto trader loses his entire investment value due to shorting BitCoin. The name of the term is borrowed from the pseudonymous “Lord Ashdrake”, a crypto skeptic who famously lost all his money after shorting BitCoin.
ASIC
ASIC is a type of complex and powerful computer hardware which is specially designed to undertake the high computational load involved in mining Proof of Work cryptocurrencies like BitCoin.
ASIC resistant
Cryptocurrencies which cannot be mined using ASIC hardware are called ASIC resistant. These include cryptocurrencies which do not use the Proof of Work method of achieving consensus. Some Proof of Work cryptocurrencies use special mining algorithms which make them ASIC resistant.
Asset Backed Tokens
These blockchain tokens confer rights of ownership over any type of real life assets such as gold, corn, cattle , company shares , etc to its holder. In other words, the value of these digital currencies/tokens are pegged to real life assets.
Atomic Swap
These are smart contracts that automatically exchange two different types of cryptocurrencies/blockchain tokens without involving an intermediary agent , like an exchange.

B

Bag
The cryptocurrency portfolios of an investor are known as “bags”. When an investor holds a significant amount of a certain cryptocurrency , he is said to hold ‘bags' of that currency.
Bagholder
An investor that holds ‘bags’ of cryptocurrency for a long period of time is known as a Bagholder.
Baking
The process of adding new blocks to the Tezos Blockchain using Proof of Stake consensus mechanism.
Basket
When a group of different cryptocurrencies are treated as one single asset.
Beacon Chain
A blockchain that handles registration of validators, staking and shard chains. Eg : Ethereum 2.0
Bear
An investor who is pessimistic about the prices of assets in a market. A bearish investor believes that market prices will decline in the future.
Bear Trap
Planned and coordinated actions of a group of investors to influence the price of a particular cryptocurrency.
Bearwhale
A bearish investor holding a large amount of cryptocurrency stock who uses their significant stake to make profits by lowering the price of the cryptocurrency.
BEP-2
Binance chain tokenization standard which defines the rules for issuing and managing tokens.
BEP-20
Binance chain standard which is based on the ERC- 20 which defines transaction and usage rules of the Binance tokens.
BEP-721
Binance chain standard which is based on the ERC - 721 which defines the rules regarding the creation and management of Non Fungible tokens (NFTs)
BEP-95 (Bruno Hard Fork Upgrade)
It is a Binance Evolution Protocol which upgrades and optimises the process of burning of BNB tokens by introducing a real time mechanism.
Binance Blockchain Charity Foundation (BCF)
A blockchain based charity organisation which pursues the goal of using blockchain for societal improvement.
Binance Community Vote
Votes cast by Binance community members for the free listing of projects on Binance.
Binance Ecosystem Fund (BEF)
Collaborative initiative Binance to work with cryptocurrency and blockchain enthusiasts.
Binance Labs
A social fund created by Binance for incubation, investment and growth of blockchain and cryptocurrency businesses and projects.
Binance Launchpad
A platform for crypto startups to raise capital from investors in the Binance network.
Bitcoin
The world’s first blockchain based, peer to peer cryptocurrency launched in 2008.
Bitcoin ATM (BTM)
An ATM which can be used to buy and sell Bitcoins.
Bitcoin Dominance (BTCD)
The ratio used to compare the market capitalization of Bitcoins to the market capitalisation of all other Altcoins in the cryptocurrency market.
Bitcoin Improvement Proposal (BIP)
Standardized document format for proposals to make changes in Bitcoin.
Bitcoin Pizza
The first transaction of Bitcoin to purchase a real world asset was when Laszlo Hanyecz used 10,000 Bitcoins to buy two pizzas.
Bitcoiner
A bullish investor of Bitcoin
Bitcointalk
A popular forum to discuss topics related to BitCoin, cryptocurrency and blockchain.
BitLicense
A business license issued by the New York State Department of Financial Services to participate in regulated cryptocurrency transactions.
BitPay
A payment service provider for Bitcoin.
Bits
A Bitcoin unit.
Block
A blockchain file containing a record of past transactions forming a single unit in a continuous chain.
Block Explorer
A browsing application used to view the contents of a block in a blockchain.
Block Header
A unique identification assigned to each block in a blockchain, which is encrypted using hash functions in order to solve Proof of Work puzzles to mine tokens.
Block Height
The number of blocks appearing before a particular block in a blockchain.
Block Producer
A BP is the chosen validator who is responsible for verifying the transactions in a block in order to add new blocks to a Proof of Stake Blockchain.
Block Reward
The incentive received by a miner in the form of tokens for solving cryptographic functions to add newly verified blocks to the blockchain.
Block Size
The maximum amount of data that can be included in a single block is known as the block size.
Block Time
The average time taken for a blockchain system to complete the process of adding a new block to the blockchain.
Block Trade
A major trade of securities outside the open market by using Blockhouse as a financial intermediary and advisor to investors.
Blockchain
A publicly distributed ledger comprising a continuous chain of units, i.e, blocks of information.
Blockchain 1.0
First generation of decentralised blockchain technology.
Blockchain 2.0
Second generation of decentralized blockchain technology featuring smart contracts and enhanced security features.
Blockchain 3.0
Predicted third generation of mass adopted blockchain technology.
Blockchain explorer
A blockchain search engine used to find information present in any block in the chain.
Blockchain Transmission Protocol (BTP)
An universal protocol that allows integration of different blockchains into a single settlement layer by securely anchoring transactions.
Blockchain Trilemma
This refers to the three major obstacles faced by blockchain developers : decentralisation, security and scalability.
Blockchain-Enabled Smart Locks
A blockchain powered smart lock which uses smart contracts to operate.
Bots
An automatic program that performs tasks such as cryptocurrency trades.
Bounty
Incentives awarded to users by blockchain projects for executing certain tasks.
Brian Armstrong
Founder of the largest American cryptocurrency exchange known as Coinbase.
Bridges
Blockchain bridges enable the transfer of data and tokens between two or more blockchain projects.
Bull
An investor who is optimistic about the market prices. A bullish investor believes that the market price of assets will rise in the future.
Bull Trap
When the price of a continuously declining asset suddenly rises before starting to fall again.
Burn/Burned
The intentional destruction or repurchase of cryptocurrency tokens to permanently reduce its circulation volume.
Buy the (F******) Dip (BTD/BTFD)
The practice of buying cryptocurrency when its price falls.
Buy Wall
Buy walls are created when a very large limit order to buy a particular cryptocurrency is placed in an exchange which prevents the market prices from dropping after a certain value.
Byzantine Fault Tolerance (BFT)
The ability of a blockchain network to achieve consensus despite the failure of a few of its nodes to respond , or respond correctly to the request.
Byzantine General’s problem
The problem faced by blockchains in arriving at a consensus regarding the validity of information contained in a block.
Byzantium Fork
An update in the Ethereum software to make smart contracts commercially viable and enhance the security and speed of transactions.

C

Candidate Block
An unconfirmed block created by a miner in order to receive tokens when its validity is confirmed.
Capitulation
When an investor who believes that the price of a cryptocurrency will not increase, sells his cryptocurrency holdings at a loss.
Casascius Coin
Real coins made of silver , gold , or plated gold which represent Bitcoins.
CeDeFi
Services which merge traditional financial institutions with decentralised finance in order to regulate modern financial markets and assets.
Censorship Resistance
These refer to policies that restrict the prohibitory practices that prevent specific users from joining and participating in a network.
Central Bank Digital Currency
CBDCs are digital currencies which are issued and regulated by the central bank of a country.
Centralized Exchange (CEX)
A company owned and centrally managed cryptocurrency exchange.
Chain reorganisation
The practice of network nodes replacing old blocks by new ones to make a blockchain longer..
Chain Split
The diversification of a single cryptocurrency project into various independent projects through forking.
Change
The balance of coins resent to a user’s wallet after they initiate a transaction using their unspent outputs in UTXO model based cryptocurrencies.
Change address
The temporary wallet address which stores the balance of coins after a transaction, before they are forwarded to the user’s wallet.
Changpeng Zhao (CZ)
Founder of Binance.
Circulating supply
The approx number of total coins in circulation in the cryptocurrency market at any given period of time.
Client
A local computer application such as a cryptocurrency wallet, which can facilitate cryptocurrency transactions.
Cloud Mining
When a miner rents remote processing power from a third party it is called cloud mining.
Co-signer
An entity having partial or joint access and/or control over a crypto wallet.
Coin
A unit of an independent cryptocurrency.
Coin Mixer
A service which jumbles transactions from between different addresses in order to make them untraceable to the initial sender and receiver.
Coinbase
The number of coins created to reward miners for creation of new blocks.
Cold Storage
Using hardware such as pendrives, offline computers, hard discs, or paper wallets to store cryptocurrency offline.
Cold Wallet
An offline cryptocurrency wallet kept in cold storage.
Collateral Tokens
Cryptocurrency tokens which are used as collateral to obtain other types of cryptocurrency tokens to mitigate lending risks.
Collateralised Stablecoin
A stablecoin pegged against collateral assets stored in a reservel
Composable DeFi
Protocols that allow the interoperability between various DeFi services in order to scale their uses and adaptation.
Composable Token
An ERC-998 token which is an NFT which can own other NFTs as well as fungible tokens.
Confirmation
A crypto transaction receives confirmation or validation when it is included in a confirmed block.
Confirmation time
The time it takes for a transaction to be added to a confirmed block after it's been submitted to the network.
Consensus
When there is agreement between all nodes of a blockchain network regarding the information contained in an individual block and the order of arrangement of blocks.
Consensus Mechanism
It is the standard procedure used by a blockchain network to achieve consensus.
Consortium Blockchain
A privately owned and managed blockchain where publicly unavailable information is shared between network participants through decentralised and transparent blockchain technology channels.
Contract account
An account with a crypto currency balance.
Coordinator
A special client which allows nodes to verify the accuracy of their individual records of transactions by comparing them to specific transactions.
Core wallet
A wallet with the capacity to store the whole blockchain.
CPU miner
A blockchain miner that uses the processing power of a CPU to perform mining operations.
Cross-chain
This technology facilitates the exchange of information across different blockchains.
Cross-chain communication
These security protocols eliminate the need for centralized third party services to verify the data and information exchanged across different blockchains.
Crypto Debit card
A debit card that can be used to make payments using crypto currencies.
Crypto invoicing
Creation of invoices that are paid using crypto currencies.
Crypto Asset
A digital asset which uses cryptocurrency or decentralised technologies to operate as a currency or service.
Crypto Money Laundering
Fiat money is converted into digital currency and then routed through various crypto channels in order to make it untraceable and legitimize or hide illegal funds.
Cryptocurrency Pairs
These pairs are utilised by crypto exchanges to trade between different tokens.
Cryptographic Hash Functions
It is an algorithm which uses cryptography to create a fixed size output of encrypted text, known as a hash, when any arbitrary value is used as input data.
Cryptojacking
The hijacking of a node’s processing hardware to mine cryptocurrency without consent.
Curve AMO
A stablecoin based automated market maker (AMM) service software.
Custodial
These are crypto businesses who take partial control of a user’s crypto wallet in exchange for use of their services.
Cypherpunk
A movement which promotes social, financial and political progress through adoption of decentralised and crypto based technology.

D

Decentralised Autonomous Organisation (DAO)
A decentralised blockchain based organisation which is governed by a set of coded rules enforced through smart contracts.
DApp
Decentralised apps that run on a peer to peer blockchain network instead of a central data server.
Decentralised Autonomous Cooperative (DAC)
Instead of a central authority, shareholders govern this type of organization.
Decentralised exchange (DEX)
An exchange which has no control over the funds of the users and trades are conducted directly through user wallets.
DeFi
Decentralised financial institutions that are based on blockchain technology.
Dead Coin
Cryptocurrencies that are no longer in existence.
Decentralised
When different participants of a network aim towards achieving a common goal, the network is said to be decentralised.
Decryption
The process of converting encrypted information to plaintext.
DeFi Aggregator
A system which brings various DeFi activities to the same platform.
DeFi Degens
A DeFi subculture notorious for associating in pump and dump activities.
Deterministic Wallet
A cryptocurrency wallet which creates its keys from a single starting point (seed).
Diamond Hands
In cryptocurrency lingo, this term refers to people who continue to hold their crypto investments regardless of a major fall in price.
Digital Asset
An asset or an item of value which is stored in digital form.
DYOR
Do your own research

E

Ethereum Improvement Proposal (EIP)
The standards of the Ethereum blockchain according to which it is operated and modified. It contains the core protocols of the Ethereum Blockchain.
Encryption
Coding of data according to a set of rules in order to make it unreadable to unauthorised third parties.
Enterprise Ethereum Alliance (EEA)
To increase the adoption of Ethereum , this is the first cryptocurrency organisation which abides by global standards.
Epoch
It is a measurement of the passage of time in a blockchain.
ERC - 20
A standard regulating the issue and implementation of Ethereum tokens.
ERC - 721
An NFT based on Ethereum.
Exchange
A platform for trading of cryptocurrency.

F

Faucet
An application or website that distributes free cryptocurrency tokens in exchange for completing simple tasks. This is usually a marketing or testing technique used to increase adoption and circulation of newly launched cryptocurrencies.
Fiat
Money issued and backed by people’s trust in the country’s government.
Finality
The guarantee that valid and fully executed crypto transactions are permanent and irreversible.
Flappening
The event when Litecoin will surpass Bitcoin as the cryptocurrency with the largest market capitalisation.
Full Node
The node of a blockchain that fully complies with its rules and fully validates the data in its blocks.
Fungibility
Property of an asset whose units are identical in value and usage.
Fork
A split in a blockchain to create an alternative and independent chain.

G

Gas
The system of calculation of transaction fees and fees for smart contract based services on the Ethereum Blockchain.
Gas Limit
The highest amount a user is willing to pay as transaction fee or service fee for smart contract operations.
Genesis Block
The initial block created in a blockchain. It is also referred to as Block 0 or Block 1.
GitHub
A site for sharing open source code for collaboration and improvement.
Gwei
A miniscule denomination of ether used in the calculation of transaction fee.

H

Halving
The event where the amount of mining reward given for the creation of new blocks is halved in order to abide by the supply limit of a crypto currency.
Hard cap
The maximum amount of funds a crypto project aims to raise through various funding activities such as ICOs.
Hard fork
A backward incompatible split in a blockchain which forces users to upgrade to the latest version in order to continue to use the network.
Hash
A random alphanumeric value that is generated as output of a hash encryption function.
HODL
Hold on to dear life , i.e , do not sell your crypto investments.
Hot Storage
A low security crypto wallet, such as one held in a crypto exchange, which is connected to the internet all times.

I

Immutability
Data once included in a blockchain cannot be altered in order to make it reliable and secure.
ICO
An Initial Coin Offering is when a new cryptocurrency project releases its coins on a crypto exchange platform to raise capital.
Interoperability
Compatibility between different blockchains in order to increase their use cases and adaptability and improve their technology.
Internal Transaction
A transaction between smart contracts which is not included in the Ethereum blockchain, hence it does not give rise to any gas/transaction fee.
InterPlanetary File System (IPFS)
A distributed file sharing system on the ethereum network which is used to share and store hypermedia files in an open source environment.
IOU
A crypto slang that stands for “I owe you”, signifying the acknowledgement of existing debt.
Issuance
The creation of new crypto tokens according to certain parameters and conditions.

J

Jager
The smallest value or denomination of the Binance coin.
JOMO
“Joy of missing out” , a slang which represents the opposite of FOMO.

K

Keccak
A cryptographic function developed by Guido Bertoni , Joan Daemen , Michael Peeters and Gilles Van Assche.
Kimchi Premium
South Korean crypto exchanges often show higher values of assets than other exchanges. This difference in value is called the Kimchi premium.
Keystore file
A keystore file is specified as a distinctive, encrypted kind of a private key in the JSON format
Know Your Customer
Commonly known as KYC, it is a process in which organizations verify the background information of their customers.

L

Large Cap
A crypto project having a significantly large share of market capitalization.
Latency
Latency refers to the time difference between submitting a transaction to a blockchain network and confirmation of the transaction’s validity by all the nodes in the system.
Layer 2
A secondary protocol built on a blockchain network to make the network more scalable.
Ledger
In the context of cryptocurrency, a ledger is the digital record of transactions happening over a network.
Leveraged Tokens
These tokens give the investor a leveraged position by amplifying his earnings and losses.
Light Node
Using full nodes, these downloaded wallets are able to access and validate blockchain information.
Lightning Network
A layer 2 solution for scaling the Bitcoin network.
Liquidity
The measure of ease of conversion or trade of a cryptocurrency with minimum influence on its prevailing market price.
Long
The expectation of an investor to sell his crypto assets at a higher price in the future in order to earn a profit.

M

Mainnet
The primary chain or network of a layered blockchain where transactions take place.
Market cap
The proportion of total value of an industry held by a particular asset is known as its market capitalisation.
Maximum Supply
The highest number of a particular crypto token that can be in circulation.
Mempool
The method used by a node to keep track of unconfirmed transactions observed by it.
Merged Mining
Simultaneous mining of two or more cryptocurrencies without compromising the mining performance.
Merkle Tree
A hash based simplified structure of data organization.
Mining
The method by which new transactions are verified and new blocks are added to the blockchain by nodes in exchange for a reward of newly created crypto currency. There are various methods of mining such as Proof of Work, Proof of Stake, etc.
Moon
A cryptocurrency which is experiencing a strong positive trend in the market.
Multi Signature
A crypto wallet which requires authorisation by multiple keys in order to process a transaction.

N

Node
A participant in a blockchain network which can choose to develop and maintain the network and communicate with other nodes.
Non Fungible Token
A uniquely defined digital token whose value and usage is specific to it and cannot be replicated by any other token. NFTs are usually in the form of artwork.
Nonce
In the context of cryptocurrency, a nonce is a unique string of numbers that is generated and used only once, generally for the purpose of verification of blocks.

O

Off Chain
Transactions that occur outside the blockchain which are later integrated into the main chain.
Ommer block
If two new blocks are mined in quick succession and in competition with each other, the later block , known as the ommer block could be integrated with the subsequent blocks and its miner would be entitled to receive a partial award.
Open Source Software
A software that can be lawfully used, distributed and developed publicly without violating any licenses.
Oracle
A third party responsible for reporting an event’s outcome reliably. In blockchains, oracles feed necessary data required to process smart contracts.
Orphan Block
A block formed in the initial days of Bitcoin core, whose parent block is unidentifiable and unknown.

P

Paper Wallet
Physically printed data of a cryptocurrency wallet , including its address and private key.
Peer to Peer (P2P)
When data is distributed between various nodes of a network without being stored and derived from a centralized server, such a network is P2P.
Permissioned Ledger
In contrast to a public ledger, access to a permissioned ledger is restricted to the public and can be obtained from an individual or a group. Trusted and known actors verify new blocks in such a blockchain as opposed to anonymous nodes.
Plasma
An offchain layer 2 scaling solution for the Ethereum blockchain.
Proof of Assignment
A resource and energy efficient method of achieving consensus in a blockchain.
Proof of Stake
A method of achieving consensus by selecting validators who stake their crypto holdings according to predefined conditions.
Proof of Work
A method of achieving consensus by solving complex cryptography problems that involve significant computational power.
Private Key
An encrypted string of characters that is linked to a user’s wallet and used to sign and authorise any transactions initiated by the user.
Public Blockchain
A blockchain network having no restrictions on access and participation , including maintenance of the distributed ledger by any node.
Public Key
A public key is paired with a private key. It is shown publicly and it is used to encrypt and send messages to the user it is linked to, who can then decrypt this message using the private key paired with his public key.

R

Relayer
It is a party which facilitates off chain orders.
Remote Procedure Call (RPC)
Also known as JSON-RPC, it is a protocol that is used to transfer data between two endpoints.
Rug pull
The unplanned and completely sudden revocation of an ongoing cryptocurrency project after continuously generating interest in the project and attracting a large funding from the public. The sudden removal of such a large liquidity leaves the investors at a major loss.

S

Satoshi
The smallest value of Bitcoin , equivalent to one hundred millionth of a BTC.
Satoshi Nakamoto
The pseudonym of the individual or group responsible for the creation of Bitcoin.
Security Audit
A systematic and regular evaluation of the soundness of a blockchain or a smart contract system against attacks.
Seed Phrase
This set of words can be used to access a user’s cryptocurrency wallet as these values are used to back up wallets. Therefore, seed phrases should be kept private in order to protect one’s wallet from being compromised.
Selfish Mining
A strategy used by miners who time the hold and release of new blocks in order to gain a competitive advantage.
Sell Wall
Sell walls are created when a very large limit order to sell a particular cryptocurrency is placed in an exchange which prevents the market prices from rising after a certain value.
Sharding
When a network is split into multiple independent units, or shards. Each shard maintains a separate account balance and smart contracts.
Sidechain
A separate blockchain that runs on the Ethereum platform. Sidechains are not a part of Layer 2, but they can be used as a cheap and resource efficient method by novice developers to start their own compostable blockchain projects.
Smart contract
A piece of blockchain code that is automatically executed when predefined conditions are satisfied.
Stablecoin
A stable cryptocurrency whose value is pegged against other assets in order to reduce price volatility.

T

Ticker
An acronym or symbol, such as BTC, that represents a crypto currency listed on an exchange.
Token
A blockchain based asset which can be traded or used as a store of value.
Transaction ID (TXID)
A unique string of characters which represents a blockchain transaction.
Trustless
A system which uses technology to eliminate the need of fiduciary or trust based relationship between members in order to secure and validate interactions. Blockchain technology is trustless as it uses encryption , P2P networks and decentralisation to facilitate and validate transactions.
Turing Complete
A machine that can solve any kind of computational problem regardless of its complexity, if there is no time and memory restriction.

V

Validator
A participant in a Proof of Stake blockchain system who stakes their crypto holdings in order to be chosen as the validator who adds a new block to the blockchain.
Vladimir Club
An investor who holds 0.01% of the maximum supply of a cryptocurrency.
Volatility
The range of variation of price of an asset and how quickly it’s price changes. It is the standard deviation of the annual returns of an asset over a period of time.
Volume
The amount of times a unit of an asset is transacted in a market in a given period of time.

W

Wallet
A software or hardware used to store , send and receive digital tokens.
Web3
A blockchain based decentralized form of the internet which is predicted to be evolving right now.
Wei
The smallest denomination of Ether (ETH).
Whale
An investor who holds a large amount of cryptocurrency and consequently have the power to influence the market.

Z

Zero Knowledge Proof
Establishing the validity of transactions without revealing any information about the transaction protecting the users privacy.
zk-SNARK
Zero-Knowledge Succinct Non-interactive Arguments of Knowledge is a mathematically complex and technologically advanced approach towards zero knowledge proofs.