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Web3 Glossary | Program Strategy HQ


web3 glossary of common terms

This Web3 Glossary is a comprehensive resource for understanding the common web3 terms around technologies, protocols, and concepts in the decentralized web. This webpage provides clear and concise definitions making it an ideal resource for anyone looking to learn or new to web3 to get quick meaning of the terms.


A:

  • Address: A unique string of characters that identifies a specific location on a blockchain where data can be stored and accessed.

  • ABI (Application Binary Interface): A specification that defines the interface between a smart contract and its external users.

  • Altcoin: Any cryptocurrency other than Bitcoin.

  • Atomic Swap: An atomic swap is a smart contract-based method of trading cryptocurrencies between different blockchains without the need for a centralized intermediary.


B:

  • Blockchain: A distributed, permanent database or ledger that is shared by all of the nodes in a computer network is known as a blockchain.

  • Bitcoin: The first and most widely used decentralized cryptocurrency.

  • Byzantine fault tolerance: A consensus mechanism used in certain blockchain networks to ensure the integrity of the network despite the presence of malicious actors.


C:

  • Consensus mechanism: The process by which different nodes on a blockchain network reach agreement on the state of the blockchain.

  • Cryptocurrency: A digital or virtual currency that uses cryptography for security.

  • Coin: alternate term for cryptocurrency

  • Crypto Wallets: Your accounts, particularly their private keys, are managed by crypto wallets. They serve as a single sign-on for all blockchain-based applications and enable you to connect to and engage with dApps. Eg: Metamask, coinbase wallet etc


D:

  • DAOs (Decentralized Autonomous Organizations) : a virtual organization that is self-governing and operates based on smart contracts and decentralized networks, giving their members more autonomy and control over their operations.

  • dApp (Decentralized Application): An application that runs on a blockchain and is typically open source and decentralized.

  • Difficulty: A measure of how difficult it is to mine a block on a blockchain.

  • DeFi (Decentralized Finance): A term used to describe financial applications that are built on top of blockchain technology and operate in a decentralized manner.

  • Delegated Proof of Stake (DPoS): A consensus mechanism used in some blockchain networks in which users vote for validators to handle the network's transaction validation.


E:

  • ERC20 Tokens: The standard for creating and issuing smart contracts used to create digital currencies.

  • ERC721 and ERC1155 Tokens: The standard for creating and issuing smart contracts used to create NFTs.

  • Ethereum: General purpose blockchain used to build dApps. They are build using solidity programming language and executed on the Ethereum network’s Ethereum Virtual Machine (EVM).

  • EVM (Ethereum Virtual Machine): The virtual machine that runs smart contracts on the Ethereum blockchain.


F:

  • Fault tolerance: The ability of a system to continue functioning correctly even when some of its components fail.

  • Fork: A split in the blockchain, creating two separate versions of the same blockchain.

  • Fungible: Interchangeable, meaning any unit can be replaced by another unit of equal value.


G:

  • Gas: The fee paid in Ether to execute smart contract on the Ethereum network

  • Genesis block: The first block in a blockchain.

  • Governance: The process by which decisions are made within a blockchain network.


H:

  • Hard fork: A type of fork that creates a permanent split in the blockchain and is not backward-compatible with the previous version of the blockchain.

  • Hash: A mathematical function that takes an input (or 'message') and returns a fixed-size string of characters, which serves as a unique identifier of the input.

  • Hash rate: A measure of the performance of a miner or mining rig, measured in hashes per second.

  • Halving: Bitcoin reward halving is the process that happens every 210,000 blocks(approximately every 4 years) where the number of bitcoins rewarded for mining is halved


I:

  • ID (Identity): A unique identifier that can be used to refer to an object or entity on a blockchain.

  • Interoperability: The ability of different blockchain networks to communicate and exchange information with each other.

  • ICO (Initial Coin Offering): The sale of a new cryptocurrency or token to early investors, in exchange for a more established cryptocurrency like Bitcoin or Ethereum.

  • IPFS (InterPlanetary File System): A peer-to-peer protocol for storing and sharing files, often used in decentralized storage solutions.


J:

  • JSON-RPC: A lightweight protocol for making remote procedure calls (RPC) in a format that uses JavaScript Object Notation (JSON).


K:

  • Key: A piece of information that can be used to encrypt or decrypt data or to access an account on a blockchain.

  • KYC (Know Your Customer): A set of regulations and procedures to verify the identity of customers and prevent money laundering.

  • Knots: Alternative Bitcoin client



L:

  • Ledger: A database that is used to record financial transactions, in the case of blockchain it refers to decentralized digital ledger that records all transactions across a network of computers.

  • Light client: A type of blockchain client that does not need to download the entire blockchain in order to verify transactions.

  • Lightning network : A second layer technology built on top of Bitcoin, enabling instant and low-cost micropayments through off-chain channels

  • Liquidity pool: A pool of assets that is used to facilitate trading on a decentralized exchange.


M:

  • Metaverse: It’s a concept of a virtual world powered by Augmented Reality (AR), Virtual Reality (VR) and Mixed Reality (MR) and built on blockchains along with token economies.

  • Merkle Tree: A data structure that allows for efficient verification of large sets of data, used in blockchains to prove the integrity of the data without revealing it.

  • Mining: The process of using specialized software and hardware to validate transactions and add them to a blockchain.

  • Multi-signature: An approach that requires multiple parties to sign a transaction before it can be added to the blockchain.

  • Mainnet: The live version of a blockchain where the tokens have real-world value


N:

  • Node: A computer that participates in the network of a blockchain by maintaining a copy of the blockchain and validate transactions

  • Nonce: A random number that is used only once, in mining it is used as a part of the input to the hash function in order to mine a block.

  • Non-fungible token (NFT): a unique digital asset that represents ownership of a digital item, such as an image, audio, or video file.

  • NFT marketplace: A decentralized marketplace for buying, selling, and trading non-fungible tokens.


O:

  • Off-chain: Transactions that occur outside of the blockchain.

  • Orphan block: A block that is not a part of the longest valid blockchain.

  • Open source: refers to code or software whose source code is available for anyone to view, use and modify.

  • Oracle: In the context of smart contracts, it's a data feed which provides external data to a smart contract.


P:

  • Peer-to-peer (P2P): A network architecture in which each node has the same capabilities and functions, and can act as both a client and a server.

  • Public key: A string of characters that is used to encrypt data and verify digital signatures.

  • Plasma: An off-chain scaling solution for Ethereum that allows for the creation of child chains that can process transactions at a faster rate than the main Ethereum chain.

  • Private key: A string of characters that is used to decrypt data and create digital signatures.

  • Pooled staking: A way of staking crypto-assets where multiple users pool their assets together, in order to have a better chance of being selected as a validator and earn staking rewards.


Q:

  • Quantum computing: A type of computing that uses the properties of quantum mechanics to perform operations on data.

  • Quorum: The minimum number of votes required for a decision to be made in a blockchain governance model


R:

  • Replay attack: An attack in which a malicious actor broadcasts a valid transaction from one blockchain to another in order to execute the same action multiple times.

  • Ricardian contract : A human-readable representation of a smart contract

  • Ring signature: A type of digital signature that allows a group of users to sign a message without revealing which member of the group actually signed it.


S:

  • Smart contract: The small computer programs which can be automatically enforced by computer code. Without a central coordinator, all of the machines on the Ethereum network duplicate and execute these smart contracts.

  • Sidechain: A separate blockchain that is attached to a main blockchain in order to enable the transfer of assets between the two.

  • Satoshi: The smallest unit of Bitcoin, named after the pseudonym used by the creator of Bitcoin, Satoshi Nakamoto

  • Sharding: A scaling solution for blockchain networks that involves breaking the network up into smaller, separate pieces called shards, each of which can process transactions in parallel.

  • Solidity: A programming language used to write smart contracts on the Ethereum blockchain.

  • Stablecoin: A type of cryptocurrency that is designed to maintain a stable value, often pegged to the value of a fiat currency or other asset.

  • State Channel: An off-chain mechanism for conducting transactions and smart contract execution that allows for increased scalability and privacy


T:

  • Testnet: A separate blockchain that is used for testing new features and applications before they are released on the main network.

  • Token: A digital asset that represents a specific unit of value or access to a specific service.

  • Token swap: The process of exchanging one type of token for another.

  • Trustless: A term used to describe systems or networks that do not require trust in a central authority or intermediary.

  • Token Curated Registry (TCR): A decentralized list of items, where the items on the list are chosen by token holders through a process of staking and voting.


U:

  • UTXO (Unspent Transaction Output): The remaining part of a transaction that is not spent and can be used as input in future transactions

  • Unpermissioned ledger: a decentralized network that doesn't require any specific authorization to join and participate


V:

  • Validator: A node in a blockchain network that is responsible for validating transactions and adding them to the blockchain.

  • Virtual machine: A software environment that emulates the functionality of a physical machine.

  • Vault: a smart contract or software mechanism that provides secure storage for cryptocurrency


W:

  • Wallet: A software application that is used to store, send, and receive cryptocurrency.

  • WalletConnect: an open protocol for connecting desktop dapps to mobile wallets.

  • Web2: Refers to the current version of the internet, based on centralized services, such as social media and e-commerce platforms.

  • Web3 stack: A term used to describe the set of technologies and protocols that make up the decentralized web, including blockchain networks, smart contracts, and decentralized storage solutions.

  • Web3.0: The term "Web 3" refers to the latest version of the World Wide Web, which integrates ideas like decentralization, openness, immutability. It encompasses distributed ledger like blockchain technologies and token-based economy.

  • Whitepaper: a detailed document that describes the technical aspects, goals, and methods of a project, often including information about the team and the token distribution.

  • Whales: Large holders of cryptocurrency

  • Wrapped token: A token that represents another token on a different blockchain. for example, wETH represents ETH on the Ethereum network wrapped to be used on other networks.


X:

  • XRP: A cryptocurrency developed by Ripple Labs, used for fast and low-cost international money transfers


Y:

  • Yield farming: the process of providing liquidity to a decentralized finance protocol in return for interest on the assets provided


Z:

  • Zero-knowledge proof: A method of proving the possession of a certain piece of information without revealing the actual information.

  • ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge): A specific type of zero-knowledge proof that is particularly efficient and private.

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