Key Terms

Please continue to check back as I learnand addmore!

Affectionately yours,

Idiot in Chief

Words in bold are defined elsewhere in the Glossary.


Your account number for crypto transactions. It's typically a string of letters and numbers and can be shared publicly. Addresses are network-specific so you need an address for your Ethereum tokens, another for your Bitcoin.

The whole enchilada!

The blockchain is a technology that acts like a digital, distributed ledger that can record transactions in a verifiable, permanent, and transparent way.

It functions as a peer-to-peer (P2P) network which stores data by packaging info into "blocks" which link into a "chain."

Example: Bitcoin is powered by blockchain technology.

Learn more here

New money

Cryptocurrency (or "crypto") is a digital currency that is secured by cryptography, hence the name! Many cryptocurrencies are decentralized networks based on blockchain technology—making it nearly impossible to counterfeit or double-spend.

Example: Bitcoin

Read more here

DAO (Decentralized Autonomous Organization)

The new way to organize

An organization controlled by its members via transparent smart contracts via the blockchain. They're member-led and not centrally run. Proposals are typically advanced by members who hold stake (e.g. tokens in the form of NFTs).

Example: Bored Ape Yacht Club

DeFi (Decentralized Finance)

The new finance

DeFi or Decentralized Finance is a type of finance on the blockchain. It doesn't rely on central intermediaries like traditional finance does so it doesn't use banks, brokerages, or exchanges. It uses smart contracts instead, most commonly Ethereum.


Regular money

Fiat currency is minted and backed by a government but not pegged to the price of a physical commodity (e.g. gold). All widely used, government-backed money is fiat.

Let me put it this way.... In the 1800s, you might use a gold doubloon which was made out of a specific amount of 22k gold (6.766 g). That gold was worth about $4 so the value of the doubloon was "backed" by the gold--if you wanted to, you could melt down the gold to sell it. Today, your paper currency (e.g. US dollars, euros, pounds, Swiss franc) can't be melted down, and the government of each country "backs" it as legal tender with their reputation.

In many Web 3 spaces, you'll see people refer to fiat as the opposite of cryptocurrency, since crypto isn't a national or state-backed currency: "You can use an exchange like Coinbase to exchange fiat for Bitcoin."

Examples: US dollars, Swiss franc, euro


Endlessly interchangeable

When an asset is fungible, its individual units are indistinguishable from each other so they're basically identical for practical purposes.

A five euro note is fungible because I can exchange it for any other five euro note, and they all have the same value: five euros. My jacket isn't fungible because it has unique properties that your jacket might not, all of which affect the value -- my jacket comes in a specific size, color, and material plus it has a small coffee stain on the sleeve. Real estate generally isn't fungible either.

Examples: Fiat currency, cryptocurrency, firewood


Making crypto

Earning crypto from the blockchain directly by validating a transaction. There are several ways do this depending on the type of blockchain technology, for example PoS or PoW protocols.

Maybe-too-obvious alert: Miners are the hardware operators who earn crypto by mining.

NFT (Non-Fungible Token)

There can only be one!

A unique and non-interchangeable unit of data stored on a digital ledger. NFTs can be basically anything you'd typically see online (e.g. photos, videos, audio). The difference is, NFTs use blockchain technology to publicly supply proof of ownership.

Example: Cryptopunks

P2P (Peer-to-Peer)

Shaking hands, but computers

A peer-to-peer (P2P) service is a platform that lets two computers (i.e. "peers") interact directly with each other, without needing a 3rd party.

Examples: Limewire, BitTorrent

PoS (Proof-of-Stake protocol)

A new consensus mechanism for blockchain

In Proof-of-Stake (PoS) protocols, network devices (nodes) earn the right to verify transactions and earn crypto rewards based on the amount of collateral (the stake) they've committed to the network.

Examples: Polkadot, Cardano

PoW (Proof-of-Work protocol)

The classic consensus mechanism for blockchain

On chains with a Proof-of-Work (PoW) protocol, miners (hardware operators) contribute work (computing power) to earn the right to validate network transactions and receive compensation in crypto.

Examples: Bitcoin

Smart Contract

Ultimate "if-then" protocol

A smart contract is a self-executing computer program / transaction protocol on the blockchain which is automatically triggered when certain, pre-defined conditions are met.

Example: Suzie creates a smart contract stating that funds are distributed to Stan on her birthday, August 5. On August 5, the funds are automatically distributed to Stan without anyone needing to do anything else.


What you grab when you want one dollar but on blockchain

Cryptocurrencies that deliberately peg their market value to an external reference.

Example: Tether, DAI, USD Coin

TLV (Total Locked Value)

What's in yours?

Quick and dirty "how much?" for DeFi

It's the sum total of the value (in USD) of all the assets that currently locked in a smart contract to support a specific protocol. Usually, more is better. DeFi Pulse, the originator of this metric, ranks DeFi protocols by TVL.

Examples: Rainbow, MetaMask

For a deeper dive:


What's in yours?

An easy way to interface with the blockchain. A wallet is service -- usually an app -- that stores the keys for cryptocurrency transactions and signing smart contracts.

Know the difference between the passcode and the address:

  1. Keep your passcode secret! The passcode lets you control your wallet.

  2. Your address is public, so anyone can look up its contents -- or send you things -- with it.

Examples: Rainbow, MetaMask

Web 3.0

The new internet

If Web 1.0 was learning to crawl, Web 2.0 was learning to walk, then Web 3.0 is learning to run.

Web 3.0 is built on decentralization, openness, and (largely) the blockchain.

Learn more here