This A–Z guide explains today’s most searched crypto and blockchain terms in crisp, practical language. It’s educational, not financial or legal advice.
Airdrop
A promotional distribution of tokens—often free—to existing users or wallets to kick-start usage or reward early supporters. Commonly used for governance and growth.
Asset-Referenced Token (ART)
Under the EU’s MiCA rules, an ART is a crypto-asset designed to keep a “stable” value by referencing a basket of assets (e.g., currencies, commodities). It is distinct from e-money tokens.
Bitcoin (BTC)
The first widely adopted cryptocurrency and peer-to-peer payment network. Bitcoin’s ledger bundles transactions into blocks and secures them with proof-of-work.
Bitcoin Halving
Roughly every four years Bitcoin cuts its block reward in half, slowing new supply and affecting mining economics.
Block
A batch of verified transactions appended to a blockchain; each block references the previous one, forming a tamper-resistant chain.
Blockchain
A shared, append-only ledger that is replicated across nodes; cryptography enforces order and integrity of transactions.
Bridge (Cross-Chain Bridge)
Software that lets users move assets or data between otherwise separate blockchains; powerful but a frequent target of exploits, so caution is warranted.
CBDC (Central Bank Digital Currency)
A digital liability of a central bank; typically not a cryptocurrency but sometimes built on similar technologies. (See BIS overviews for broader context.)
Consensus Mechanism
The method nodes use to agree on the next block. Bitcoin uses Proof-of-Work (PoW); Ethereum now uses Proof-of-Stake (PoS).
Data Availability (DA)
Ensuring rollups or other layers can publish enough transaction data for anyone to verify the state. On Ethereum, EIP-4844 (“proto-danksharding”) introduced blob-carried data to reduce L2 costs.
Decentralized Exchange (DEX)
A non-custodial marketplace where trades settle on-chain, often via an automated market maker (AMM).
EIP-1559 (Ethereum Transaction Fees)
Ethereum’s fee mechanism with a dynamically adjusting “base fee” that is burned plus a “priority tip” to validators; designed to make fees more predictable.
EIP-4844 (Proto-Danksharding)
An upgrade that added “blobs” to lower data costs for rollups, improving L2 scalability ahead of full danksharding.
E-Money Token (EMT)
In MiCA, a token meant to maintain a stable value by referencing a single official currency (e.g., EUR or USD).
ERC-20
Ethereum’s standard for fungible tokens (interchangeable units like most utility and governance tokens).
ERC-721 (NFT Standard)
Ethereum’s standard for non-fungible tokens—unique items like artwork or collectibles.
ERC-1155 (Multi-Token Standard)
A flexible standard that can manage both fungible and non-fungible tokens in one contract, enabling efficient batch operations.
Gas (Ethereum)
A unit measuring computational work; users pay gas fees to execute transactions and smart contracts.
Howey Test (US)
The long-standing US test for whether something is a security: investment of money in a common enterprise with a reasonable expectation of profits from the efforts of others. Often applied to digital assets.
ICO (Initial Coin Offering)
A token sale that raises funds for a crypto project. Whether a given ICO involves securities depends on facts and circumstances under the Howey framework.
IEO (Initial Exchange Offering)
A fundraising sale conducted on a crypto trading platform, which intermediates the token distribution and often claims some vetting.
IDO (Initial DEX Offering)
A public token sale run on a DEX; liquidity pools usually enable immediate trading after the sale.
Lightning Network
A Bitcoin “Layer 2” that uses payment channels to enable fast, low-fee payments secured by the base chain via hashed timelock contracts (HTLCs).
MEV (Maximal Extractable Value)
Value captured by block producers (or their supply chain) from ordering, including, or excluding transactions beyond standard rewards and fees; a key topic on Ethereum.
Merkle Tree
A hash-based data structure that allows efficient verification of large sets of transactions; Bitcoin blocks include a Merkle root summarizing their transactions.
Multisig (Multi-Signature)
A wallet or script that requires multiple private keys to authorize a transaction—useful for shared control and security.
Nonce (Ethereum)
A per-account counter that prevents transaction replay and enforces ordering for each sender.
Node (Full Node)
Software that validates and relays transactions/blocks according to consensus rules; full nodes independently verify the entire chain.
Oracle
A service that feeds off-chain data (e.g., prices, weather) into smart contracts—crucial but introduces the “oracle problem” of trusting external inputs.
Proof-of-Stake (PoS)
Validators stake crypto and are chosen (probabilistically) to propose/attest to blocks; Ethereum moved to PoS in 2022.
Proof-of-Work (PoW)
Miners expend computational work to find a valid hash below a difficulty target, securing the network and pacing block production.
Rollup (Optimistic & ZK)
Layer-2 systems that execute transactions off-chain and post data back on L1. Optimistic rollups assume validity subject to fraud proofs; ZK-rollups post succinct validity proofs.
Smart Contract
Code deployed on a blockchain that executes deterministically when called; power dApps, tokens, and DeFi. Secure coding practices are essential.
Stablecoin
A token designed to maintain a stable value—typically against a fiat currency—using reserves, algorithms, or both. In the EU, stablecoins fall under MiCA as ARTs or EMTs.
Staking & Slashing
In PoS networks, participants lock tokens to help secure the chain and may earn rewards; misbehavior (e.g., double-signing) can be penalized by “slashing.”
Travel Rule (FATF Recommendation 16)
AML standard requiring VASPs to collect and share sender/recipient information for certain transfers of virtual assets; global implementation is ongoing.
UTXO vs. Account Model
Bitcoin tracks unspent outputs (UTXO); Ethereum uses account balances and nonces—two different state models with different tooling and privacy trade-offs.
Wallet (Custodial vs. Non-Custodial)
Custodial wallets hold keys for you; non-custodial wallets give you control of private keys. “Hot” wallets stay online; “cold” wallets keep keys offline for security.
Wallet Seed / Mnemonic (BIP-39)
A human-readable phrase that encodes the master key for a wallet; anyone with the seed can control the funds—store it offline and never share it.
