Blockchain glossary

# A B C D E F G H I K L M N O P R S U W
51% attack

A brute force attack on a crypto network. Conducted by directing more computational power than half (51%) of what the network currently uses, with the intention of manipulating the consensus mechanism (typically for gains made through double spending).

Address An alphanumeric string of characters that represent a reservoir/destination where crypto can be sent to and from.
Air gap To physically isolate computers from any exterior devices or information sources. Also known as a 'closed-circuit' design, the purpose of air gapping is to maximise control over data flow.
AirDrop A method of distributing cryptocurrency in which market participants do not need to exchange their existing assets for a new one; but rather receive it based on some prerequisite factors (such as holding a parallel cryptocurrency).
Algorithm  Coded instructions or rules that are executed by a computer to solve problems.
AML Acronym for anti-money laundering. A legal framework that is intended to subvert criminal financial activity.
API  Application Program Interface. A software that tells other softwares how they should interact with each other.
Block height The numeric representation, showing what is the current number of the block being hashed.
Block reward The compensation that is paid out by the internal mechanism to keep nodes/miners incentivised to operate.
Block  An immutable digital file which stores information regarding any and all activity on the network. Each block has its own timestamp, Merkle Tree hash, digital signatures, and transactions. This structure helps to maintain a chronological sequencing.

A type of distributed ledger technology that stores data in a chronological series of 'blocks' that are linked together and act as the spine or backbone of the digital ecosystem. A chronological series of 'blocks' that are linked together and act as the spine or backbone of the digital ecosystem.

Burning  A method by which tokens become unspendable (commonly by just being sent to an unspendable address) and thus serve as a deflationary mechanism.
Censorship resistant Something that is not susceptible to being filtered by any meddling middle entities (tolerant to institutional opposition).
CEX  Centralised EXchange. It is any market exchange platform, e.g., NYSE, Nadex, LSE.
Confirmation  Validation of a transaction/series of transactions. In the bitcoin blockchain, each individual transaction must be validated by six independent nodes in order to be considered as a true act.
Consensus  A brief, recurring state of the network that constitutes a widespread agreement on a subject. The term used to describe how a network conjugates in order to maintain a distributed anonymous method of guaranteeing the integrity of itself.
Cryptoasset  Cryptoassets are cryptographically secured digital representations of value or contractual rights that use some type of distributed ledger technology (DLT) and can be transferred, stored or traded electronically.
Cryptography  Cryptoassets are cryptographically secured digital representations of value or contractual rights that use some type of distributed ledger technology (DLT) and can be transferred, stored or traded electronically.
DAO  Decentralised Autonomous Organisation. A collective of entities that converge on some unified concept and operate as one organism.
DAPP  Decentralised APPlication. The main benefits of decentralised applications are immutability, accountability, anonymity, and enormous bandwidth (not to mention control over personal data).
Deflation  The economic side effect of value accrual; when something is deflationary it is limited in supply and highly demanded, directly cascading into a self-fulfilling prophecy of price hike.

A Decentralised Exchange is a peer-to-peer marketplace of crypto trading. DEX utilize a particular blockchain to facilitate transfers and are considered a part of decentralized finance (DeFi) tools.


A measure of the computational resources required to solve the hash of the next block. A high difficulty means that more computational power will be needed to mine the same number of blocks, making the network more secure against attacks. The difficulty measure is calculated in the Total Hash Rate (TH/s) chart.

Double spending

The malicious act of spending the same currency twice by subverting the networks hashrate and mining off-ledger. The entity that has to bear the price of such activities tend to be the cryptocurrency exchanges.

Ephemeral keys/tokens Private keys or tokens that are not stored physically in any form or medium. Ephemeral keys or tokens are generated as a result of completing a separate cryptographic process, such as an authenticated key exchange protocol or when participants complete a group signature algorithm, such as a threshold ring signature algorithm.

Technical standard for fungible tokens protocol on the Ethereum blockchain. Deciphered into: Ethereum request for Comments — 20 as in the request digital fingerprint (the numbers simply represent a unique identifier from its concurrent protocol brethren). Also known as a 'utility token', its actual functionality on the ethereum network is 'access/interactivity' to DAPPS.


Fiat currency

What we know as the political denomination of money(s). It is the legal tender declared by a governed, which has not intrinsic value (is not linked to a commodity like gold) but is backed by political positioning and global influential strength.


A network split of a blockchain, which makes the previous network’s blocks and transactions invalid. Usually happens when there is a necessary software code update that requires abandoning the previous copy of the code (hard & soft).

Genesis block

The very first block of the bitcoin network. Block 1, the first mined block which began the infinite future of finance, bitcoin. It was developed by Satoshi Nakamoto in 2009.


The procedure of reducing the mining rewards on a blockchain – the supply of new bitcoins is cut in half. For the bitcoin network, this occurs once every four years or approximately the time it takes to mine 210,000 blocks. Starting at 50, the bitcoin reward halved to 25 in 2012, then halved again to 12.5 in 2016.

Hard fork

A complete change to a cryptocurrency’s protocol. Usually a change in some very fundamental aspect of the code (such as the privacy protocol or consensus mechanism), which usually renders the previous blockchain nodes and transactions invalid. (See fork.)

Hash rate The unit of measurement of a network’s processing power.
Hash  A fixed-length string representing some mind of input data. In bitcoin’s case, a hash is created from following a very specific set of instructions and points to previous data.
Initial coin offering (ICO)

Cryptocurrency industry’s equivalent of an initial public offering (IPO). A crowdfunding mechanism that incorporates decentralization; by being able to host a 'trustless' method of value transfer, entities can now go directly to the public and raise funds; as opposed to relying on some intermediary to mediate the process & touch the funding.

Keys or tokens in transit Private keys or tokens that have been digitised to become information that flows over a computer network and are subsequently in motion over the network. The type of network (public or private) does not matter.
Keys or tokens stored at rest Private keys or tokens stored physically in a digital form in any medium. This list of mediums can include, but is not limited to, hardware security modules (HSMs), databases, data warehouses, archives, printed sheets of paper, off-site backups, mobile devices, etc.

Acronym for 'know your customer'. A set of rules laid out by the government for companies to obtain a certain amount of information from their users/participants with the objective to prevent and detect financial crime and money laundering.

Layer 2

Also called second layer, is a protocol that is built on top of another protocol in order to leverage back-end systems operation to the first layer and manipulate the parameters of the first layer. The main purpose of Layer 2 solutions is scaling the blockchain to increase its transaction speed.

Lightning network

A decentralised network, that can be layered on top of any blockchain-based cryptocurrency, using blockchain smart contracts, with the purpose of enabling instant payments across various participants.


The node/node operator which chooses to participate in the incentivised process of extracting for example Bitcoin and securing its network.


The process in which nodes compete with each other to verify and publish transactions. For bitcoin, mining would include compiling all previous block metrics with current ones and trying to solve a complex, computationally-demanding puzzle.

Mining pool A group of miners that have unified their computing resources in order to distribute the mining rewards more consistently between its participants.

The process of creating new token on the blockchain through staking existing tokens on the network as collate, in accordance with the Proof of Stake (PoS) mechanisms.

Mixing services / laundry

A method of enhancing privacy and anonymity. Done by pooling transactions together and shuffling them around with the help of certain ciphering algorithms.


A computer/device that connects to a blockchain software and helps to validate and strengthen the network’s resilience.

Nonce (number only used once)

A (pseudo) random number, generated in order to satisfy the parameters required by the mining and hashing algorithms. The nonce is the number that blockchain miners are solving for – once solved they receive the block reward.

Off chain transactions Transactions that are not made on the native crypto chains themselves in order to avoid bloating/congestion.
Orphaned block A valid block that has been abandoned by the network due to a fork. Later on, it is adopted back onto the chain to which it originally belonged.

A term used to describe a metric of a new blockchain related to the genesis formation. It refers to coins being mined before a coin has been made public, unlike Bitcoin which was not premised, but  began its operations at 1; other chains such as BTCP were only available after 5% of the total supply was already extracted into the private hands of the organisers. 

Private key

One of the two keys involved with all public cryptographic interactions. The private key is the key which proves ownership of an address or is used to sign transactions on the blockchain.

Public key

The key that is used in order to represent the counterpart of ownership of an address. This is the key that is shared with the public in order to receive funds at a blockchain address as well as backtrack the correlating addresses history.


It is the process by which a custodian receives a cryptoasset and then pledges that cryptoasset to cover its own exposure to a separate third party, which then pledges that same collateral to a different party, and so on and so forth. The practice is often used by banks and brokers.

Seed  The private key used in deterministic systems. The birth of randomness on a digital scale. A technique used to initialise a random number generator.
SegWit Segregated witness: a soft fork improvement to the bitcoin code which helps the network handle more transactions.
Side chains Blockchain ecosystems that are designed to function in a two-way feed. Essentially children chains pegged to the 'motherchain' for on and off-ramping.
Signature (digital signature) A mathematical process that is utilised in order to prove digital ownership. Designed to be collision resistant, the methods currently employed are as effective as a regular biological fingerprint.
Smart contract / self-executing contract

Algorithms that facilitate and enforce obligations without any outside intervention. Stored on the blockchain itself, a smart contract is an unalterable agreement that has specific logic operations akin to a real-world contract. Once signed, it can never be altered.

Soft fork A change network protocol that is backward compatible; so nodes are not by any means forced to upgrade and still benefit from its implementation. (See fork.)
Staking  Proof of stake (POS) assets incentivise participants to help secure the blockchain by 'staking', or 'delegating' their assets to someone running the blockchain software. If you delegate to a trusted node (also known as a validator), you can share in the rewards that the validator receives for mining blocks. Anyone holding the blockchain’s token can participate in this process.
STE Security token exchange.
STO Security token offering.
Utility token

The class of tokens that are issued in order to raise capital on a project/company, later allowing to have access to that company’s product or service. It is a form of access to a certain future value.


A blockchain storage facility for cryptocurrencies. A software that allows users to store their cryptocurrencies in a user interface/user experience friendly way. Abundant in formats; paper wallet, web wallet, desktop wallet, hardware, and mobile wallets.

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