Web3 Glossary

Blockchain technology, a revolutionary advancement in digital transactions and data storage, has introduced a myriad of terminologies that are essential for understanding its ecosystem. This comprehensive glossary aims to elucidate key terms associated with blockchain technology, with a particular emphasis on the Polkadot ecosystem. As an SEO expert with deep knowledge in blockchain technology, this glossary is designed to enhance understanding and improve content visibility.

A

Account An account in blockchain technology consists of a public and private keypair, allowing access to and control over tokens associated with a specific address. Although tokens are tracked by the blockchain and not physically stored in a wallet or account, we often refer to it that way for simplicity. In Ethereum-compatible blockchains, a Secret Recovery Phrase (SRP) can generate nearly infinite accounts, each with its own keypair, all controllable by the SRP. This is akin to having a username (public) and password (private) for an Ethereum account, where you are the custodian of your keys, unlike platforms like Reddit which manage your login information. For added security, you can encrypt your private key with a password, creating an additional layer of protection. Related terms include ‘keystore file’ and ‘Secret Recovery Phrase’.

Address: An address is used for sending and receiving transactions on a blockchain network and identifies different users. It is an alphanumeric string that can also be shown as a scannable QR code. In Ethereum, addresses start with “0x”. Example: 0x06A85356DCb5b307096726FB86A78c59D38e08ee.

Air-gapping: Air-gapping is a security measure where a computer or device is isolated from the internet or any open networks. This technique is often used by hardware wallets to keep private keys or Secret Recovery Phrases offline, enhancing security against attacks.

Airdrop: An airdrop is a method of distributing cryptocurrency or tokens to wallet addresses. Often used for marketing, recipients might be required to complete tasks such as reshares, referrals, or app downloads to receive the tokens.

Altcoin: The term “altcoin” refers to any cryptocurrency other than Bitcoin, derived from “alternative coin.” While commonly used in the context of Bitcoin, the term is less prevalent in Ethereum or smart contract-enabled blockchain communities.

AMM (Automated Market Maker): An automated market maker (AMM) is a protocol typically used on decentralized exchanges. It automates the process of providing quotes for trades, replacing traditional buy-and-sell order books with liquidity pools that anyone can join or use.

API (Application Programming Interface): An application programming interface (API) is a set of protocols allowing computer programs to communicate with each other. APIs are often used to provide services or data to other applications, functioning as a messenger between two apps.

Asset Hub: A central platform for managing digital assets within the Polkadot ecosystem.

Auction (Parachain): A process where blockchain projects bid for a slot on the Polkadot network to become parachains.

Availability Cores: Slots used to process parachains in the Polkadot network. The runtime system assigns each parachain to an availability core. Validators can fetch information about these cores, including parachain block candidates, by calling the appropriate Runtime API. This setup ensures efficient processing and validation of parachain data within the network.

B

BABE (Blind Assignment for Blockchain Extension): BABE is Polkadot’s block production mechanism, responsible for the generation and assignment of blocks within the network.

Block: A data structure used for recording a set of transactions in a blockchain.

Blockspace: Capacity of a blockchain to finalize and commit operations. It encompasses a blockchain’s security, computing, and storage capabilities as an end product. The quality, availability, and flexibility of blockspace can vary across different blockchains. Polkadot features a blockspace-centric architecture, emphasizing efficient use and management of blockspace.

Blockchain: A digital ledger consisting of immutable, digitally recorded data in packages called blocks. Each block is linked to the next block using a cryptographic signature, forming a chain. Ethereum is a public blockchain, accessible to anyone worldwide. Its digital ledger is distributed across numerous nodes, which synchronize with each other. These nodes achieve consensus on the validity of a transaction before encrypting it, along with several other valid transactions, into a block.

Block Explorer: A blockchain explorer is an application, typically a website with a corresponding API, that presents blockchain activity in a more user-friendly format. Although blockchains are designed to permanently store information and be accessible to anyone, locating specific data can be challenging. This often requires indexing the data off the blockchain by categorizing it (e.g., by sender address, token type) into a separate database that users can query. Blockchain explorers perform this crucial function. A notable example is Subscan, which also provides explorers for various other networks.

BLS (Boneh-Lynn-Shacham): A cryptographic signature scheme used in blockchain systems.

Bonding: The process of locking tokens to support network security and operations, often related to staking.

Bounty: A reward system for network participants who complete certain tasks or identify bugs.

Bridge: Technology that connects two different blockchain networks, enabling interoperability.

Block Height: The number of blocks preceding a specific block in the blockchain.

Block Reward: The incentive given to miners or validators for adding a block to the blockchain.

Block Size: The amount of data a block can contain, impacting transaction throughput and speed.

Block Time: The time it takes to generate a new block in the blockchain.

Blockchain Trilemma: The challenge of balancing decentralization, security, and scalability in blockchain systems.

Bytecode: Low-level code that is executed by the blockchain’s virtual machine.

Byzantine Fault Tolerance: The ability of a blockchain network to achieve consensus despite some nodes acting maliciously or failing.

Byzantium Fork: A significant update to the Ethereum network aimed at improving efficiency and security.

Burn: The process of permanently removing cryptocurrency tokens from circulation, often to reduce supply.

C

Capacity: The maximum amount of data or transactions that a blockchain network can handle.

Collectives: Groups or organizations operating on a blockchain, often governing aspects of the network.

Commission: A fee charged by validators or miners for processing transactions.

Common Good (Parachain): Parachains on Polkadot that provide essential services to the entire network.

Community Queue: A system for managing the inclusion of new projects or updates in a blockchain network.

Consensus: The mechanism by which a blockchain network agrees on the state of the ledger.

Crowdloan: A fundraising mechanism where participants contribute tokens to support a project or parachain auction.

Curator: An individual or entity responsible for managing and maintaining a specific aspect of a blockchain project.

Codefi: A suite of blockchain applications aimed at improving business and financial operations.

Cold Wallet / Cold Storage: A method of storing cryptocurrency offline to enhance security against hacking.

Crypto: Short for cryptocurrency, a digital or virtual currency secured by cryptography.

Cryptoassets: Digital assets that utilize blockchain technology for secure transactions.

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

Cryptography: The practice of secure communication in the presence of adversaries.

CEX (Centralized Exchange): A cryptocurrency exchange operated by a central authority.

Cross-Chain: The ability to interact and transfer assets between different blockchain networks.

D

Dapps (Decentralized Applications): Applications that run on a blockchain network, beyond the control of a single entity.

DOT: The native cryptocurrency of the Polkadot network.

DAO (Decentralized Autonomous Organization): An organization governed by smart contracts and decentralized decision-making.

Decentralization: The distribution of authority and governance away from a central entity.

Decentralized Exchange (DEX): A peer-to-peer marketplace for trading cryptocurrencies directly without an intermediary.

DeFi (Decentralized Finance): Financial services using blockchain technology to operate without traditional intermediaries.

Deposit: The action of adding funds or tokens to an account or contract in a blockchain network.

Digital Identity: A digital representation of a user’s identity information on the blockchain.

Digital Signature: A cryptographic value used to verify the authenticity and integrity of a message or transaction.

Distributed Denial of Service (DDoS) Attack: An attack aimed at overwhelming a network with excessive traffic to disrupt service.

Distributed Ledger: A digital system for recording transactions across multiple sites or nodes.

Double Spend: The risk of a cryptocurrency being spent more than once.

E

Epoch: A fixed period in a blockchain network during which certain operations are performed or recorded.

Era: A longer period in a blockchain network composed of multiple epochs.

Equivocation: The act of a validator proposing conflicting blocks in a blockchain network.

Extrinsic: An external action or transaction that can change the state of a blockchain.

EIP (Ethereum Improvement Proposal): A design document providing information or a new feature for the Ethereum community.

ERC-20: A standard for creating and issuing tokens on the Ethereum blockchain.

ERC-721: A standard for creating non-fungible tokens (NFTs) on the Ethereum blockchain.

ERC (Ethereum Request for Comments): A process for proposing and discussing improvements to the Ethereum network.

EVM (Ethereum Virtual Machine): The runtime environment for executing smart contracts on Ethereum.

F

Technical Fellowship: A group of experts providing technical guidance and improvements to a blockchain network.

Finality: The point at which a block of transactions is considered irreversible and permanent.

Finality Gadget: A protocol ensuring that once a block is finalized, it cannot be changed or reversed.

Frame: A modular development framework for building blockchain applications and components.

Faucet: A service that provides small amounts of cryptocurrency for free, often for testing purposes.

Fork: A split in the blockchain network resulting from changes in the protocol or software.

Fungible Token: A token that is interchangeable with another token of the same type and value.

G

Genesis: The initial state or starting point of a blockchain network.

Governance: The processes and structures for decision-making and management in a blockchain network.

Governance Council: A group of individuals or entities responsible for overseeing and making decisions in a blockchain network.

GRANDPA (GHOST-based Recursive ANcestor Deriving Prefix Agreement) Finality Gadget: A consensus protocol used in Polkadot for finalizing blocks.

Gas: A unit measuring the computational work required to execute operations on the Ethereum network.

Gas Limit: The maximum amount of gas a user is willing to spend on a transaction.

Gas Price: The amount of cryptocurrency a user is willing to pay per unit of gas.

Genesis Block: The first block in a blockchain, serving as the foundation for all subsequent blocks.

Gwei: A denomination of Ethereum, equal to one billionth of an ETH.

H

Hard Fork: A significant and potentially incompatible update to a blockchain protocol, resulting in a split.

Hard Spoon: A method of distributing tokens from one blockchain to another without splitting the original blockchain.

Horizontal Relay-routed Message Passing: A method for enabling communication between parachains in the Polkadot ecosystem.

Hash: A fixed-length string produced by a hash function, representing data uniquely.

Hashrate: The measure of computational power used in mining or validating transactions on a blockchain network.

Hot Wallet / Hot Storage: A method of storing cryptocurrency online, typically for convenience and quick access.

I

Inactive Nomination: A state where a nominated validator is not currently participating in block production.

Inherent: Actions or transactions that are intrinsic to the blockchain’s operation, not initiated by external entities.

Injected Account: An account that is added to a blockchain wallet or interface through an external service or extension.

Interoperability: The ability of different blockchain networks to interact and exchange information.

ICO (Initial Coin Offering): A fundraising method where new cryptocurrency projects sell tokens to early investors.

InterPlanetary File System (IPFS): A decentralized protocol for storing and sharing files on a distributed network.

J

JSON-RPC: A protocol for remote procedure calls encoded in JSON, commonly used for blockchain APIs.

K

Keep-Alive Check: A mechanism to ensure continuous activity and connectivity in a blockchain network.

KSM: The native cryptocurrency of the Kusama network, a canary network for Polkadot.

Kusama: A scalable, multichain network for early-stage deployment and testing of Polkadot technology.

Keystore File: A file containing a user’s encrypted private key, used for securely accessing a blockchain wallet.

Know Your Customer (KYC): Regulatory requirements for verifying the identity of customers in financial services.

L

Lease Period: The duration for which a parachain slot is leased in the Polkadot network.

LIBP2P: A modular network stack used for building decentralized applications.

Layer 2: Solutions built on top of a blockchain to improve scalability and efficiency.

Light Client: A lightweight version of a blockchain client that verifies transactions and blocks without downloading the entire blockchain.

Liquidity: The ease with which an asset can be converted into cash or other assets without affecting its market price.

Liquidity Pool: A pool of tokens locked in a smart contract to facilitate trading on a decentralized exchange.

M

Mainnet: The primary and fully operational blockchain network, as opposed to a testnet.

Message: Information sent between nodes in a blockchain network to communicate and validate transactions.

Metadata: Data providing information about other data, such as transaction details on the blockchain.

Motion: A proposal submitted for voting in a blockchain governance process.

Market Cap: The total value of all tokens in circulation for a particular cryptocurrency.

Maximum Extractable Value (MEV): The maximum profit that can be extracted from blockchain reordering transactions within a block.

Memory Pool: A pool where unconfirmed transactions are stored before being added to the blockchain.

Merkle Patricia Trie: A data structure used in Ethereum for efficient storage and retrieval of blockchain data.

Mining: The process of validating transactions and adding them to the blockchain, typically in proof-of-work systems.

Mnemonic Phrase: A sequence of words used to recover a cryptocurrency wallet.

Modular Blockchain: A blockchain designed with separate components that can be independently upgraded or replaced.

Multi-Signature Wallet (MultiSig): A wallet that requires multiple signatures to authorize transactions, enhancing security.

Mint: The process of creating new tokens in a blockchain network.

N

Next Session: The upcoming period in a blockchain network where new validators or activities will be scheduled.

Node Explorer: A tool for browsing and monitoring nodes in a blockchain network.

Nominated Proof of Stake (NPoS): A consensus mechanism where validators are selected based on nominations and stake.

Nominator: An individual or entity that supports validators by nominating them in a proof-of-stake system.

Non-Fungible Token (NFT): A unique digital asset representing ownership or proof of authenticity of a specific item.

Node (Full Node): A computer that fully validates transactions and blocks in a blockchain network.

NFT Aggregator: A platform that collects and displays NFTs from multiple sources.

O

On-Chain Governance: The process of making decisions and implementing changes directly on the blockchain.

On-ramp, Off-ramp: Services that facilitate the exchange between cryptocurrencies and fiat currencies.

Optimistic RollUp: A layer 2 scaling solution that assumes transactions are valid and only verifies them if fraud is suspected.

Oracle: A service that provides external data to smart contracts on the blockchain.

Polkadot OpenGov: The governance system of the Polkadot network, allowing token holders to participate in decision-making.

Origin: The source or initiator of a transaction or proposal in a blockchain network.

P

Pallet: A module in the Substrate framework used to build blockchain applications and features.

Parachain: A parallel blockchain that connects to the Polkadot relay chain for enhanced scalability and interoperability.

ParaID: A unique identifier for parachains in the Polkadot network.

Parathread: A pay-as-you-go model for blockchain projects to access Polkadot’s shared security without leasing a full parachain slot.

Parachain Registry: A record of all parachains registered and active in the Polkadot network.

Parity Technologies: A blockchain infrastructure company and developer of the Polkadot network.

People Chain: A decentralized network focusing on identity verification and management.

Polkadot Alliance: A collective of projects and organizations supporting the Polkadot ecosystem.

P2P (Peer-to-Peer): A decentralized communication model where each participant acts as both a client and server.

Permissioned Ledger: A blockchain where access to the network is restricted to authorized participants.

Private Blockchain: A blockchain network with restricted access, typically used by organizations for internal purposes.

Private Key: A cryptographic key that allows access and control over a cryptocurrency wallet.

Proof of Authority (PoA): A consensus mechanism where trusted validators are pre-selected to produce blocks.

Proof of Stake (PoS): A consensus mechanism where validators are chosen based on the amount of cryptocurrency they hold and are willing to “stake.”

Proof of Work (PoW): A consensus mechanism where miners compete to solve complex mathematical problems to add new blocks to the blockchain.

Proof of Validity (PoV): A mechanism for verifying the validity of transactions and blocks in a blockchain network.

Protocol: A set of rules and standards for communicating and conducting transactions in a blockchain network.

Public Key: A cryptographic key that can be shared publicly and is used to receive cryptocurrency.

P2E (Play-to-Earn): A model where players can earn cryptocurrency or other digital assets by participating in games.

PFP (Profile Picture): Digital art or images used as profile pictures, often associated with NFTs.

Polkadot Host: The software framework for building and running parachains in the Polkadot ecosystem.

Preimage: The original data that is hashed to produce a specific hash value.

Proposal: A formal suggestion for change or action in a blockchain governance process.

R

Random Seed: A value used in cryptographic algorithms to ensure randomness.

Referendum: A vote by the community or stakeholders on a specific proposal or decision in blockchain governance.

Relay Chain: The central chain in the Polkadot network that provides security and interoperability for connected parachains.

Runtime: The environment in which blockchain operations and smart contracts are executed.

Runtime Module: A component of the blockchain runtime that defines specific functionality and logic.

Relayer: An entity that facilitates cross-chain communication and transactions.

Rollups: A layer 2 scaling solution that batches multiple transactions into a single transaction for efficiency.

RPC (Remote Procedure Call): A protocol for requesting services and executing code on a remote server or node.

RPC Node: A server that provides access to the blockchain network via RPC.

Rug Pull: A malicious act where developers abandon a project and take investors’ funds with them.

S

Shared Security: A feature where multiple blockchain projects benefit from the security of a common network.

Slashing: A penalty imposed on validators who act maliciously or fail to perform their duties.

Spend Period: The time frame during which funds can be spent in a blockchain network.

Staking: The process of locking up cryptocurrency to support network operations and earn rewards.

State: The current status of all accounts and balances in a blockchain network.

State Transition Function: The logic that defines how the blockchain state changes with each new block.

Substrate: A framework for building customizable blockchains, developed by Parity Technologies.

System Parachain: A parachain dedicated to providing essential services and infrastructure for the Polkadot network.

Satoshi Nakamoto: The pseudonymous creator of Bitcoin.

Scalability: The capability of a blockchain network to handle increasing amounts of transactions.

Seed (phrase) Secret Recovery Phrase: A set of words used to recover access to a cryptocurrency wallet.

Smart Contracts: Self-executing contracts with the terms of the agreement directly written into code.

Solidity: A programming language used for writing smart contracts on the Ethereum blockchain.

Stablecoin: A cryptocurrency designed to maintain a stable value, often pegged to a fiat currency.

Swap: The exchange of one cryptocurrency for another.

SPL Token: A token standard on the Solana blockchain, similar to ERC-20 on Ethereum.

T

Tabling: The process of submitting a proposal or motion for consideration in a governance system.

Teleport: A method for transferring assets between different blockchain networks.

Testnet: A version of the blockchain used for testing and development purposes.

Tracks: Categories or paths for governance proposals, often with different requirements and voting mechanisms.

Transfer: The act of moving cryptocurrency from one account to another.

Transaction: An action initiated by a user that changes the state of the blockchain.

Token: A digital asset that represents value, ownership, or utility within a blockchain network.

Total Value Locked (TVL): The total value of assets locked in a DeFi protocol.

Transaction Block: A block that contains a batch of transactions to be added to the blockchain.

Transaction Fee: The cost paid by users to process transactions on the blockchain.

Transaction Pool: A pool of pending transactions waiting to be added to the blockchain.

Trustless: A system that operates without requiring participants to trust each other.

Turing-complete: A system capable of performing any computation given enough time and resources.

TPS (Transactions Per Second): A measure of how many transactions a blockchain network can process in one second.

V

Validator: A participant in a blockchain network responsible for verifying transactions and maintaining the network.

Vertical Message Passing: A method for enabling communication between different layers of the Polkadot network.

Voting: The process of casting votes on proposals or decisions in a blockchain governance system.

W

Waiting Nomination: A state where a nomination is pending and not yet active in the validator selection process.

Wallet: A digital tool for managing cryptocurrency holdings and conducting transactions.

WASM (WebAssembly): A binary instruction format for a stack-based virtual machine, used for executing code on the web.

Web3 Foundation: An organization dedicated to advancing decentralized web technologies and applications.

Web Assembly: A low-level, binary code format that allows high-performance execution of code on the web.

Westend: A testnet for the Polkadot network used for testing and experimentation.

Whitelist Pallet: A module in Substrate for managing a list of approved entities or actions.

Web3: A term referring to the decentralized web and applications built on blockchain technology.

Whale: An individual or entity that holds a large amount of cryptocurrency.

Z

ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge): A cryptographic proof that allows one party to prove possession of certain information without revealing the information itself.

Zero Address: A special address used to denote an empty or uninitialized account in a blockchain network.

%

51% Attack: A scenario where a malicious entity gains control of more than 50% of the blockchain network’s hash rate or staking power, potentially compromising the network.

This comprehensive glossary provides an in-depth understanding of essential terms in the blockchain and Polkadot ecosystems, enhancing knowledge and improving content visibility in the Web3 space.