Glossary
Explore the comprehensive glossary of web3 terms, including definitions, explanations, and related concepts. Whether you're a beginner or an expert, our glossary provides a detailed overview of the terminology used in blockchain, NFTs, and cryptocurrency.
A
AIRDROPS
Airdrops are essentially when creators of a project send free coins or tokens to the wallets of users of their products to raise awareness around the project.
ALTCOIN
The term altcoin (or alternative coin) is used to refer to any other cryptocurrency built after the launch of bitcoin (BTC).
AMM
The term AMM is an acronym for automated market maker. AMMs are decentralized exchange protocols that allow any party to trade one asset for another in a trust-less manner against an automated trading mechanism (i.e. smart contract). Furthermore, participants can also provide liquidity to a liquidity pool allowing anyone to become a market maker and earn fees for the liquidity they provide.
ARWEAVE
A storage protocol for storing data permanently in a decentralized manner among network users who have storage to spare. The native currency for Arweave is the AR token
B
BEACON CHAIN
Beacon chain is an improvement to the Ethereum network introduced in the first stage of ETH2.0. The Beacon Chain introduces a Proof-of-Stake consensus mechanism to the network which allows ETH holders to stake their ETH and become validators in ETH2.0. This enables validators to validate and confirm transactions on the network.
BITCOIN
Arguably the most influential blockchain to take the technology mainstream. Bitcoin came to be in 2009 looking to introduce a permissionless, decentralized protocol running on a peer-to-peer network without intermediates. The native currency of the bitcoin network is bitcoin (BTC).
BLOCK
The term block refers to data representing a set of transactions or state change that occurred on a blockchain at specific moment in time. Network participants (i.e. miners, validators, etc...) are responsible for verifying the integrity/validity of new blocks coming into a chain and ensuring they get recorded into the network.
BLOCKCHAIN
A publicly-accessible digital ledger used to store and transfer information without the need for a central authority. Blockchains are the core technology on which cryptocurrency protocols like Bitcoin and Ethereum are built.
BLOCKCHAIN TRILEMMA
The blockchain trilemma refers to an inherent challenge when it comes to blockchain design where a chain can only reliably guarantee two of the following three properties: scalability, security and decentralization. The main reason for this is because one must typically sacrifice a fundamental property from one(or two) of the three to achieve the other.
C
CENTRALIZED
The term centralized is often used to describe a good or service tied to a single entity (or small group) for which many users depend upon. A centralized good or service often consolidates control, authority and access to the small group of participants that operate it; however, that often makes the small group in control a single point of failure. Much of the web2 landscape is dominated by centralized systems and platforms in contrast to the web3 movement that is leaning towards a more decentralized ecosystem.
COLD WALLET
A cold wallet is typically a special type of hardware device that holds ones cryptocurrency but has the distinct feature of being disconnected from the internet. Cold wallets are usually utilized to hold large sums of cryptocurrency since the disconnect from the web ensures a high level of protection from bad actors. The added security typically comes at the cost of convenience/usability since the process of accessing the funds must be initiated through the hardware which involves extra security measures.
CRYPTOCURRENCY
Cryptocurrency is a general term used to refer to a digital medium of exchange (typically fungible in nature) built on top of a blockchain (representing a digital ledger). Cryptocurrency and blockchains are typically erroneously interchanged in conversation by those new in the space. Blockchains are the core technology that enable cryptocurrencies to exist.
D
DAO
An acronym for decentralized autonomous organizations. DAO's are distributed internet communities that self-organize around a common niche and are driven by purpose oriented tokens created on blockchain protocols. Developer DAO (D_D) is an example of a DAO.
DAPP
The term dApp is short hand for decentralized application. A dApp is a piece of software whose backend relies on a decentralized blockchain to fulfill use cases such as authentication, authorization, data retrieval, data persistence, payments, and so on. Glosseta is an example of a dApp.
DECENTRALIZED
When something is referred to as being decentralized it means that particular thing is distributed, controlled and operated among many different parties with no central authority. When an application is referred to as being decentralized (i.e dApp), in its purest form it means that it's hosted by many different peer machines on a given network and its underlying data stored and served through a non-centralized blockchain. This allows the application to remain up and running forever (theoretically) since if a subset of peers go down, the remaining peers keep the application running. Thus, the application becomes resistant to censorship and the common pitfalls of Web2.
DECENTRALIZED SOCIAL MEDIA
Decentralized social media is a type of social networking where users and communities have control over their data and interactions, without reliance on a central authority or corporation.
DECENTRALIZED STORAGE
Decentralized storage is a way of storing data where it's spread out across many connected devices instead of being kept in one central place, making it more secure, reliable, and available.
DEFI
Decentralized Finance (DeFi) refers to the ecosystem of financial applications built on blockchain technologies, offering services like lending, borrowing, and trading, which are automated by smart contracts and operate without traditional intermediaries, ensuring open access, transparency, and security.
DEVELOPER DAO
The Developer DAO exists to accelerate the education and impact of a new wave of Web3 builders. The core values embodied by the DAO are transparency, diversity, inclusion, responsibility, kindness and empathy. The DAOs mission is to onboard developers into Web3 through education, support, and by building public goods/tools for the community.
DEX
The term DEX is shorthand for decentralized exchange. A DEX is a financial service that allows one to buy, sell and trade digital assets without the need for a centralized intermediary with transactions done in a peer-to-peer fashion via blockchains.
DIGITAL IDENTITY
Digital Identity refers to the virtual representation of an individual or entity's unique characteristics, information, and activities online. It is the digital equivalent of one's identity in the real world, used for various purposes such as authentication, authorization, and personalization in digital interactions.
DIGITAL MARKETPLACE
Digital marketplaces are online stores where users can buy and sell digital goods and services (e.g. NFTs).
E
EIP
An acronym for Ethereum Improvement Proposal. EIPs describe how the Ethereum blockchain works through core protocol specifications, client APIs, and contract standards. As Ethereum is an open and decentralized blockchain, the community can propose changes through an EIP then implement them after consensus is reached.
ENS
ENS stands for the Ethereum Name Service which is an open, distributed and extensible naming system built on the Ethereum blockchain. At a high level ENS allows one to map their machine readable wallet address into something human readable like glosseta.eth. ENS allows for the natural introduction of a single source of truth for ones online identity, portable across the internet.
ETHEREUM
Ethereum is a general purpose, decentralized, smart contract enabled blockchain with a built in programming language (Solidity) allowing anyone the ability to build decentralized applications on top of. The native currency of this blockchain is Ether (ETH).
ETHEREUM FOUNDATION
The Ethereum Foundation is a non-profit organization dedicated to advancing and supporting the development of the Ethereum blockchain by providing resources like funding, research, and guidance to help developers advance the ecosystem.
EVM
The Ethereum Virtual Machine (EVM) is a piece of software that is core to the Ethereum blockchain. It powers the network upkeep of the blockchain as well as letting decentralized applications execute code.
F
FIAT
A term used to refer to a government issued currency like the US Dollar.
FOMO
An acronym for fear of missing out usually driven out of anxiety that one may miss out on something exciting or interesting.
FRENS
A short hand term for friends.
FUD
An acronym for fear, uncertainty, and doubt, usually evoked intentionally in order to put a competitor at a disadvantage.
FUNGIBLE
A term to describe a store of value or medium of exchange that is divisible, indistinguishable, and obtainable in fractional form. The US or Canadian dollar are examples of fungible mediums of exchange.
G
GA
An acronym for good afternoon.
GAS
Gas refers to the unit that measures the amount of computational effort required to execute specific operations on the Ethereum network. Since each Ethereum transaction requires computational resources to execute, each transaction requires a fee. Gas refers to the fee required to conduct a transaction on Ethereum successfully.
GLOSSETA
Glosseta is an open-source web3 glossary meant to help those onboarding into web3 understand the terms/lingo floating around the internet. Glosseta is meant to be your companion on your adventure from web2 into web3 and to help you on your path of learning. We're all going to make it (WAGMI)!
GM
An acronym for good morning. Every day should begin with saying gm to your fellow web3 community members.
GN
An acronym for good night.
H
HASH
A hash is the result of a deterministic transformation of data after being passed through a mathematical formula. A hash is typically a long series of alphanumerical characters having the unique property of being very hard to reverse engineer. That is, it's very difficult to figure out the original data from just the hash itself. This is one of the foundational components enabling the security and privacy of blockchains.
HODL
An acronym for hold on for dear life (equivalent to HOLD) often used to encourage people not to sell cryptocurrency impulsively on huge swings in price.
HOT WALLET
A hot wallet is a piece of software that holds ones cryptocurrency but has the distinct feature of always being connected to the internet (i.e. hot). Hot wallets are the most popular and convenient means to hold ones cryptocurrency since they typically can run on any desktop, tablet or mobile device. The convenience comes at the cost of security since just like any other piece of software, a hot wallet can be compromised by bad actors.
L
LAYER 1
The term layer 1 refers to a base layer blockchain (i.e. like Ethereum, Bitcoin, etc...) in web3. These blockchains act as the foundational chains that power the web3 ecosystem.
LAYER 2
The term layer 2 refers to mechanisms meant to reduce costs of using existing layer 1 blockchains and enhance their scalability. These solutions typically sit on top of existing layer 1 blockchains and use that underlying chain to ensure security.
LAZY MINTING
Lazy minting is the process of deferring the actual gas payments associated with fully minting a non-fungible token (NFT) on the Ethereum blockchain by uploading the assets off-chain to start. Once a user commits to actually minting the NFT (i.e. listing the item for sale) then the gas fees are paid to have it added to the blockchain. This technique is typically used when uploading a large amount of work to sell on the open market to delay paying gas fees when prices are high.
LENS PROTOCOL
Lens Protocol is a social graph that allows users to own and control their social connections and content, unlike traditional social media where data is controlled by the platform. Users can easily move their data between different applications, fostering a collaborative and user-centric social media ecosystem.
M
METVERSE
The metaverse is a persistent and interactive virtual space that merges physical and digital realities, offering immersive experiences with its own economy and is accessible through various devices.
MINTING
Minting is the process of committing data to be written to a blockchain in order to become represented as tokenized assets. Typically a fee is paid to the participants of a given blockchain, proportional to the complexity of the computation involved, to have the data written to the chain. Minting can be applied to both fungible and non-fungible assets.
N
NFT
An acronym for non-fungible token. A NFT is a digital representation of a non-fungible good programmed on a smart contract enabled blockchain.
NGMI
An acronym for not going to make it.
NON-FUNGIBLE
A term to describe a good that is indivisible, unique, and cannot be obtained in fractional form. A piece of art, a membership or an event ticket are some examples of non-fungible goods.
P
PEER
In the context of a network protocol like a blockchain (i.e. Bitcoin, Ethereum, etc...), a peer is a computer running the software of the given protocol. Peers participate in the upkeep and security of the network protocol and typically have a mechanism in place to keep each other in sync.
POLYGON
Polygon is a layer 2 blockchain that sits on top of Ethereum whose purpose is to make it faster and cheaper to use.
PRIVATE KEY
A private key is an alphanumerical series of characters that can thought of as the password to your digital goods and tokens in your wallet. It is the key that unlocks your assets and the mechanism in web3 that grants you ownership of the assets that belong to you. Just as with a password, one must keep their private key hidden from the public and stored away from anything that connects to the internet (i.e. written down on a piece of paper and stored in a safe). If anyone ever comes into the possession of your private key, they can (and will) steal your goods.
PROBABLY NOTHING
Definitely something.
PROOF OF HISTORY
Proof of History (PoH) is an algorithm developed by Anatoly Yakovenko for verifying the order and passage of time between events on a blockchain (i.e. historical records) using a recursive cryptographic hashing function (aka verifiable delay function). PoH is not a consensus algorithm but rather a mechanism allowing network participants to discern the passage of time themselves instead of waiting on others to corroborate it. PoH introduces a fundamental change with respect to how other public blockchains come to agreement on the passage of time leading to optimized network effects of block confirmation times (i.e. speedier transactions). PoH is a core component of the Solana blockchain helping it excel in the areas of speed and capacity.
PROOF OF STAKE
Proof of stake(PoS) is a consensus mechanism based on financial deposit (i.e. stake) of the native token of a given blockchain to uphold the security and integrity of that chain. Staking a specific amount of token makes one a validator for a given chain, whose responsibility it is to propose and vote on new state transitions (i.e. blocks). Validators are rewarded with the native token of the chain upon the submission of successful blocks; however, if a validator is deemed a bad actor, they are punished by losing their deposited token.
PROOF OF WORK
Proof of work is a consensus mechanism used to uphold the security and integrity of a blockchain, most famously for the Bitcoin protocol. Proof of work sets peers in the network against each other in a game to see who can correctly solve a computationally intensive puzzle the quickest. The winning peer obtains the right to update the state of the network (i.e. write the next transaction in the ledger) and broadcast that update for the rest of the peers to validate for correctness. Once the work is proved to be correct, the peer receives (i.e. mines) a token from the protocol as a reward.
PUBLIC KEY
A public key is an alphanumerical series of characters that acts as a mechanism, when used in conjunction with a private key, to provide a means signing transactions and verifying oneself on a blockchain. Every public key is created from a corresponding private key in such a manner where the two are exclusively tied together. That is no other private key can create that same public key. The concept of the public/private key pair acts as the cornerstone of modern day cryptography.
S
SHARDING
Sharding is typically regarded as a database optimization technique where tables are partitioned (into shards) and distributed among multiple database instances to increase overall throughput. This technique can also be applied to blockchains where nodes in a given network hold parts of the overall chain so that each shard can work in parallel to reach consensus in a more load balanced manner. This overall optimization in the consensus mechanism of the chain theoretically leads to an overall increase in network transaction speeds.
SIDECHAIN
A sidechain is a blockchain that typically sits on the side of a foundational layer 1 blockchain (i.e. Ethereum, Bitcoin, etc...). A sidechain typically has its own consensus mechanism and handles much of its computation outside of the foundational layer it sits beside. As a result, these sidechains typically support high throughput and offer lower transactional costs to use; however, since they use their own consensus mechanism, the security provided by the foundational chain they sit beside is not guaranteed.
SMART CONTRACT
A smart contract is a programmable agreement that executes and enforces itself automatically when predefined conditions and rules encoded into it are met, utilizing blockchain technology to ensure transparency, security, and decentralization.
SOLANA
Solana is high throughput, open and permissionless blockchain utilizing Proof of Stake in tandem with Proof of History to make it the world's first web-scale layer 1 blockchain. The native token for the chain is SOL and is used to pay network participants (i.e. a set of validators) to run on-chain programs or to validate that programs output.
STAKING
Staking is the process of locking up ones cryptocurrency (typically on an exchange or through a wallet) as a means of contributing to the security and functionality of an applicable blockchain. In exchange, a user typically earns a yield in proportion to the amount of cryptocurrency staked, paid in fixed time intervals, as incentive for supporting the network.
W
WAGMI
An acronym for we are all going to make it.
WALLET
A wallet is a piece of software that allows one to manage their cryptocurrency by abstracting away much of the complexity that comes with the subject matter. A wallet does not store ones coins/tokens directly, rather it contains the cryptographic keys that grant access to them on a given blockchain. Unfortunately, the term wallet may not fit today's reality of the true digital landscape blockchains cover(art, memberships, music, etc...) and may be replaced over time.
WEB1
Web1 is a term used to refer to the first real mainstream adoption of the internet in the early 1990's limited to mostly static HTML pages meant for reading data. Many of the use cases that really took the internet mainstream came along with the Web2 movement in the early 2000's that introduced the ability to both read and write data.
WEB2
The term Web2 refers to the second evolution of the internet allowing for reading and writing of data online. The Web2 movement started from the 2000's and was dominated by centralized platforms that brought upon the rise of social media, interactive design, cloud computing and eCommerce. This form of the internet has been criticized for over excessive focus on profits, mass surveillance, targeted advertisements, and privacy concerns over personal data. In Web2 the user is typically considered the product (i.e their data); however, the Web3 movement is looking to flip that narrative on its head.
WEB3
A term that defines the next generation of the web looking to make blockchains the backbone of the internet and introduce the concept of the token economy. The token economy refers to the change of mindset with regards to how wealth, governance, community building and applications will be driven by a programmable means via blockchains.
WHALE
A term for an individual holding a large amount of cryptocurrency.
Something missing?
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