The Ultimate A-Z of Web3 Terms

digital transformation course with tom goodwin

Web3 is the future of the internet. 

Stop picturing all of that Jetson's nonsense, it's all about virtual reality, AI, and Decentralisation. Although a sentient robot maid sounds pretty cool. 

glossary

So, marketers have got to keep up with the changes in tech. Plus, it means you can understand what your nephew is saying at the next family BBQ. 

Now, let's jump into some terms. We've got all the way past A, over H, round by N, and landing all the way with W. You can't say we don't treat you. 

A

ABI

An acronym for Application Binary Interface. It is an interface between two binary program modules at the level of machine code, not source code. 

Airdrop


A marketing technique in which crypto projects send their native tokens directly to the wallets of their users in an effort to increase awareness and adoption.


Alpha


Valuable or insider information, usually regarding the value of digital assets like cryptocurrencies and NFT. It is a measure of the return on investment over and above the return offered by the market or other benchmark.


Altcoin

Initially used to refer to any cryptocurrency that wasn’t Bitcoin, altcoin may now refer to any new cryptocurrency with a relatively small market cap.


Alts

Short for altcoins.


Ape

Someone who invests heavily in a cryptocurrency or stock


Archival Nodes


An archival node is a full node in the blockchain that keeps a complete history of transactions and addresses state changes since the genesis block


AR

An interactive experience of a real-world environment. Objects and scenarios that exist in the real world are recreated to be experienced through technology.

ATH- All-Time High


The highest price an asset has ever had.


ATL- All-Time Low


The lowest price an asset has ever had.

Avatar

An avatar is a digital rendering of a human being or other entity in VR, a video game, the internet or another virtual space.

B

Bear Market

A prolonged period of decline in a financial market.


Bitcoin

A decentralised, digital currency that can be transferred from peer to peer. 


Block

A block is a package of data that contains zero or more transactions; the hash of the previous block (“parent”); and optionally other data. Because each block (except for the initial “genesis block”) points to the previous block, the data structure that they form is called a “blockchain”.


Blockchain

A secure, digital recording of transactions that are captured in a way that is very difficult to change or hack.


Bridge

A protocol allowing separate blockchains to interact with one another, enabling the transfer of data, tokens, and other information between systems.


Burn

The process by which cryptocurrency is taken out of circulation and placed in a private, inaccessible location.


Bulletproofs

Bulletproofs are short, non-interactive zero-knowledge proofs that require no trusted setup. Bulletproofs can be used to convince a verifier that an encrypted plaintext is well-formed.

C

Centralised 

A hierarchical structure in which authority and control are concentrated within a small group of decision-makers.

CEX- Centralized Exchange


A cryptocurrency exchange managed by a centralised business or entity.

Collateral

any asset accepted as security for a loan, such as a physical asset like real estate, or a digital asset like an NFT.

Consensus

Consensus is how a decentralized network such as a blockchain maintains security. The blockchain is copied across the whole network of computers that have formed the blockchain through contributing individual blocks.

Crypto wallet 

An account, application, service or device for storing, trading or spending cryptocurrencies. A “hot wallet” is a crypto wallet that’s connected to the internet, leaving it vulnerable to certain kinds of scams, fraud and other attacks. A “cold wallet” is a crypto wallet that is not connected to the internet, making it safer for the long-term storage of cryptocurrencies.

Cryptocurrency 

Any form of digital currency that uses cryptography, an encryption process, to secure transactions making counterfeiting or double-spending almost impossible. Unlike regular currencies, they are rarely issued by a central bank or other authority. Most popular cryptocurrencies — like Bitcoin and Ethereum — use a blockchain as a record of transactions. Less popular cryptocurrencies are often called “altcoins.”

Crypto winter 

A period of steep decline within the cryptocurrency market, which results in the loss of huge sums of money for some investors.

D

Dapp

A decentralised application. A Dapp is an application constructed on the blockchain. Like any other app, dapps come with a user interface and are designed to provide some kind of practical utility.

DAO

Decentralized Autonomous Organizations (DAOs) are an organizational structure used to run and oversee projects in Web3 in a decentralized manner.

decentralised system

This a system that’s controlled in equal measure by each of its constituent parts. Blockchains – the technological framework for web3 – are decentralised, meaning that no single individual, corporation or other entity is able to exert a disproportionate degree of control over how they are constructed and run.

Defi. 

Decentralised finance, or Defi, refers to a financial system built upon the blockchain, and therefore fully distributed and not subject to any centralized authority, such as a bank, government agency or financial management firm.

DEX- Decentralized Exchange


A peer-to-peer cryptocurrency exchange built on the blockchain. A DEX is run by its users and smart contracts instead of an intermediary figure or centralized institution. 

Digital twin

This is a virtual rendering of a physical object. But a digital twin is more than a mere three-dimensional simulacrum – they’re designed, ideally, to be as dynamic and environment-dependent as the objects they’re imitating. 

Drop

The release of limited edition items or collections used by brands to generate consumer enthusiasm. For example in the context of Web3, a brand may use an exclusive NFT drop as a marketing tactic.

E

Ethereum (ETH)

A decentralised blockchain for the Ether cryptocurrency, and the second most popular cryptocurrency by market cap.

Ethereum 2.0

Ethereum 2.0 is a deprecated term that was used to describe the consensus layer of Ethereum as part of it's migration from a Proof-of-Work consensus mechanism to a Proof-of-Stake consensus.

Ethereum Virtual Machine (EVM)

The Ethereum Virtual Machine (EVM) is a software application that blockchain developers use to deploy decentralised applications (Dapp) on the Ethereum blockchain.

F

Fiat

A currency established as legal tender often backed and regulated by a government, such as the US Dollar

Fork

A change to a blockchain protocol. When these changes are minor, this results in a soft fork. When the changes are more fundamental, this may result in a hard fork, leading to the formation of a separate chain with different rules.

Fractionalise

the process of locking an NFT into a smart contract, and then dividing it into smaller parts which are issued as fungible tokens. This lowers the price of ownership and allows artwork and other digital assets to be owned by a community.

Full Node

A blockchain node stores the blockchain’s complete history, as well as verifies and relays transactions.

Fungible

Interchangeable; exchangeable with something else of the same kind.

G

Gas 
a fee paid by a user to conduct a transaction or execute a smart contract on the Ethereum blockchain. 

Gas Fees

Gas fees are the fees users must pay in Ethereum's native currency, Ether (ETH), to complete a transaction. 

Genesis Block 
the very first block of a blockchain network.

Gwei

a denomination of ether used as the unit of measure for Ethereum gas prices. 10^9 gwei = 1 ether.

 

H

Hard Fork 

A fundamental change to a blockchain that is not compatible with the existing protocol, requires the formation of a new chain.

Hashing

the process of taking an input of any size and producing a corresponding fingerprint of a fixed length.

I

ICO 

An Initial Coin Offering (ICO) is where developers of a cryptocurrency will release a set amount of tokens to crowdfund a project. This is similar to a company raising capital through an Initial Public Offering (IPO).

Internal transaction

An internal transaction is a transaction between one smart contract and another smart contract.

Initial Coin Offering (ICO) — An event where a company raises money by selling a new cryptocurrency. ICOs are generally unregulated, and pump-and-dump scams have been an issue in the past. 

Interoperability,

Refers to the ability of multiple blockchains to cooperate and exchange information with one another, enabling virtual assets (such as NFTs), avatars and other pieces of code to move seamlessly from one platform to another.

L

Light Node 

A blockchain node that downloads just enough data from the blockchain in order to process and verify transactions. Unlike full or master nodes, light nodes do not store a blockchain’s complete history.

Liquidity 

A measure of how easily an asset can be bought, sold, or traded in a given market or on an exchange.


Liquidity Pool

A collection of user-provided funds locked into a smart contract to facilitate trading on a Defi platform. On decentralised exchanges and lending protocols, liquidity must be provided by the users, as there is no central bank or figure to do so. 

M

Mainnet 

Short for main network, this is a main layer 1 blockchain, as opposed to a testnet or layer 2 solution.

Market Cap 

the total value of an asset based on its current market price. A cryptocurrency’s market cap is found by multiplying the price of a single coin by its circulating supply.

Metaverse

A persistent virtual world with a digital economy, which is generally accessed by virtual reality (VR) or augmented reality (AR) technology.

Mining 

The process of creating new units of cryptocurrency that can be introduced to the marketplace. Mining is used by Bitcoin, Ethereum and some other cryptocurrencies that deploy a “proof of work” algorithm to verify transactions without a centralized authority.

Minting 

The process of validating information, such as domain ownership, and registering that onto the blockchain.

Moon / To the moon!


This phrase implies that the value of an asset will go so high that it will reach the literal moon. 

 

N

NFT- Non-fungible token 

A digital certificate of authenticity used to assign and verify ownership of a unique digital or physical asset. Unlike fungible tokens, NFTs are not interchangeable with one another. 

NFT Domains 

Domain names minted on the blockchain which allow people to govern their own data, set their Web3 username, take control of their digital worlds, and harness the power of the internet.

Node

Any device connected to a blockchain network. Different nodes have varying levels of responsibility, and may help validate transactions, store the blockchain’s history, relay data, and perform other functions.

Non-fungible 
unique; not interchangeable.

O

Oracle 

A service supplying smart contracts with data from the outside world. Smart contracts are unable to access data that exists off-chain, so they rely on oracles to retrieve, verify, and provide external information. 

P

P2P- Peer-to-Peer 

A distributed network of two or more computers which interact directly without a central server or entity.

Polygon 

A “sidechain” or extension of the Ethereum blockchain that allows for faster transactions and lower fees.

Private Key 

an alphanumeric passcode required to withdraw assets from a blockchain wallet and authorize digital transactions. Because these private keys are long and difficult to memorize, wallets will generally associate them with a seed or recovery phrase that is easier to remember.

Proof of stake (PoS) 

A method used to validate cryptocurrency transactions. Proof of stake enables cryptocurrency holders to stake coins and run a “validator node” (a computer connected to the network running specialized software) to create and verify blocks being added to a blockchain. Proof of stake is a more energy-efficient alternative to proof of work.

Proof of work (PoW)

A consensus method used to validate cryptocurrency transactions. Proof-of-work miners compete to be the first to solve a complex cryptographic equation.

Protocol 

The foundational software layer of a program.

Public Key 

Uses to point to your wallet address. A public Key is an alphanumeric code that serves as the address for a blockchain wallet, similar to a bank account number. 

Pump and dump 

A scheme where a cryptocurrency or other asset is hyped up, leading many to buy into it, raising its price. Those who did the hyping then sell their holdings of the asset as the price rises for a short period of time. This then leads to a sharp selloff where anyone who did not sell suffers a loss.

Q

Queued Pool

The queued pool is a pool of transactions in the mempool that are not yet ready to be processed because they are 'out of order.' Blocknative's pending transaction monitoring tools can be used to gain insights into transactions in the queued pool.

R

Rinkeby

Rinkeby is a Proof-of-Authority testnet for Ethereum where smart contract developers can test code before deploying it to Ethereum's mainnet. 

Ropsten

Ropsten is the primary Ethereum testnet (test network) where blockchain developers can test their smart contract code in a live setting without spending actual money.

Rug pull 

A scam maneuver where a crypto project takes the funds that have been invested into its protocol and runs. An inside job pump-and-dump, if you will. A rug pull can also occur in assets with highly centralized ownership. If someone is able to sell a large portion of the circulating supply at once, this rapidly increases the supply, which can cause the price of the asset to plummet.

Rollup 

A scaling solution that aims to improve transaction throughput and decrease fees by batching multiple transactions off-chain and then submitting them to the main chain as a single transaction.

 

S

Sandwich Attack

A sandwich attack is a form of crypto market manipulation prevalent within the Defi ecosystem. It occurs when an attacker attempts to profit from an asset's price volatility.

Scalability 

A protocol’s capacity to handle higher demand and increase transaction throughput as the network grows.

SDK

A software development kit (SDK), also known as a devkit, is a collection of software tools and programs developers can use to quickly deploy an application in their development environment. 

Shitcoin 
a cryptocurrency with weak fundamentals and little to no use case.

Soft Fork

A backwards-compatible update to a blockchain. Unlike a hard fork, these changes do not require the creation of a separate chain.

Solidity

The native programming language of Ethereum mainly used to write smart contracts.

Sidechain

A side chain is a blockchain that allows tokens from one blockchain to be securely used within a completely separate blockchain but still move back to the original chain if necessary.

Smart Contracts

A smart contract is a piece of code that executes according to its instructions exactly like a traditional contract between two people would be executed.

Stablecoin

A token with its value pegged to another asset. Stablecoins are usually backed by a fiat currency, like the US dollar, but can also be pegged to physical assets like precious metals, or even other cryptocurrencies like Bitcoin.

Stuck Transactions

A stuck transaction is when transactions cannot be mined. Many stuck Ethereum transactions are caused by nonce gaps, and until the nonce gap has been resolved, wallets cannot process new transactions.

T

Testnet
a software environment that mimics a mainnet blockchain, used to test network upgrades and smart contracts before deploying them to the mainnet. 

Token 

A generic term for one unit of a cryptocurrency. 

Tokenomics

A blending of the words ‘token’ and economics, is an umbrella term that refers to all of the various qualities of a virtual currency that can cause its market value to fluctuate.

TPS- Transactions per second


the number of transactions that a blockchain can handle per second, used as a benchmark to measure its computational power.

TradFi 

The shorthand that some in the crypto community use to refer to as ‘traditional finance’ – basically the pre-DeFi paradigm of centralised financial authority, in which governments, banks and other institutions control and regulate currency.

Transaction

The data written to a blockchain. New transactions are verified by nodes on the network and then broadcasted to other nodes. Once enough nodes have verified the transaction, it is considered valid and added to a block.

U

Ultrasound Money

A rebuttal against the argument that Bitcoin is “sound money” or the “hardest form of currency” by saying that Ethereum post-EIP 1559 and post-ETH2 merge will be more sound than Bitcoin.

Up Only

A tongue-in-cheek saying, which implies that a cryptocurrency or other asset can only increase in value. This is used to voice one’s bullish stance on an asset, although it may also be used sarcastically.

V

Virtual reality (VR)

A simulated experience accessed using virtual reality goggles. Today, virtual reality or VR is mostly used for video gaming

W

Wallet 

A software application or hardware device used to store the private keys to blockchain assets and accounts. 

Web 1.0 

The earliest version of the internet. Web 1.0 is the read-only web with static pages that people could visit, but not interact with. Web 1.0 was named after the concept of Web 2.0 was developed so it is, by necessity, defined as things that aren’t Web 2.0. 

Web 2.0 

The modern version of the world wide web. Web 2.0 is the social web, which is driven by user-generated content. Social media, blogging, podcasting, uploading videos to YouTube and writing reviews online are all things made possible by the technologies that underlie Web 2.0. 

Web 2.0 websites are dynamic and interactive. People can create accounts or see content specifically intended for them. The vast majority of popular websites fit under the broad umbrella of Web 2.0.

Web3 

The future of the world wide web, at least theoretically.

WETH

Wrapped ETH – a cryptocurrency that allows users to make pre-authorized bids that can be fulfilled at a later date without any further action. WETH is used to buy and sell at auctions on OpenSea. ETH and WETH are worth exactly the same amount and can be exchanged directly on an OpenSea profile. However, users need to pay gas fees to exchange ETH for WETH if they win the bid. 

Whale – an individual who holds a large amount of a particular cryptocurrency, social token, or NFT. A whale has enough coins or tokens to cause a significant impact on the market prices by selling or buying large amounts.