Blockchain A–Z

Definitions and explanations of blockchain terms, curated on ChainMart.

Account Abstraction — Account abstraction is a blockchain protocol design improvement that replaces the rigid, key-based account model of conventional blockchain systems
Airdrop — An airdrop is the distribution of cryptocurrency tokens or digital assets directly to a set of wallet addresses, typically at no direct cost to the recipients
Atomic Swap — An atomic swap is a mechanism that allows two parties to exchange assets on different blockchain networks or in different wallets on the same network directly with each other, without relying on a trusted intermediary to hold funds during the exchange
Block Explorer — A block explorer is a web-based or API-accessible tool that allows anyone to search, browse, and inspect the contents of a blockchain
Blockchain — A blockchain bridge enables assets or data to move between different blockchain networks.
Blockchain Analytics — Blockchain analytics involves analysing blockchain data to monitor transactions, detect risks, and generate insights.
Blockchain Bridge — A blockchain bridge enables assets or data to move between different blockchain networks.
Blockchain Middleware — Blockchain middleware is the integration layer that connects blockchain systems with enterprise applications and workflows.
Blockchain Scalability — Blockchain scalability describes how well a network can handle growing transaction volumes without losing performance.
Blockchain-as-a-Service (BaaS) — Blockchain-as-a-Service (BaaS) is a managed offering that lets organizations deploy blockchain applications without running the underlying infrastructure themselves.
Central Bank Digital Currency (CBDC) — A CBDC is a digital form of a country's sovereign currency issued and backed by its central bank.
Cold Storage — Cold storage is the practice of keeping the private keys that control digital assets in an environment that is permanently disconnected from the internet.
Composability — Composability is the property of blockchain-based protocols and smart contracts that allows them to interact with, build on, and combine with each other automatically.
Consensus Mechanism — A consensus mechanism is the method by which a distributed network agrees on the validity of transactions and the state of the ledger.
Cross-Border Payments — Cross-border payments are transfers of money or value between parties in different countries.
Cross-Chain Interoperability — Cross-chain interoperability is the ability to move data, assets, or instructions across different blockchain networks.
Cryptographic Hashing — Cryptographic hashing converts data into a fixed-length string that can be used to verify integrity.
Custody — Custody refers to the secure storage and management of digital assets, including the safeguarding of private keys and access controls.
DAO (Decentralized Autonomous Organization) — A DAO is a digitally coordinated organization whose rules and decision processes are managed through blockchain-based mechanisms.
Data Integrity — Data integrity is the assurance that information remains accurate, consistent, and unchanged except through authorised updates.
Data Privacy on Blockchain — Data privacy on blockchain refers to the controls used to protect sensitive information while still benefiting from shared ledger infrastructure.
Decentralization — Decentralization distributes control, validation, or ownership across multiple participants rather than a single central operator.
Decentralized Finance (DeFi) — Decentralized Finance (DeFi) is a category of financial services built on blockchain networks rather than traditional intermediaries.
Decentralized Identity (DID) — Decentralized Identity (DID) allows individuals or organizations to control and manage their digital identity without relying on central authorities.
Digital Asset — A digital asset is any form of value that exists in digital form and can be owned, transferred, or traded, often using blockchain infrastructure.
Digital Identity Wallet — A digital identity wallet stores and presents identity credentials in digital form.
Digital Securities — Digital securities are traditional financial instruments represented and managed on a blockchain.
Digital Twin — A digital twin is a digital representation of a physical asset, process, or system that can be updated with real-world data.
Distributed Ledger Technology (DLT) — Distributed Ledger Technology (DLT) enables multiple parties to maintain and synchronise a shared database without a central controller.
EigenLayer — EigenLayer is a protocol approach that allows security from staked assets to be reused across additional services or networks.
Encryption — Encryption turns readable information into protected data that can only be accessed with the correct key.
Enterprise Blockchain Platform — An enterprise blockchain platform is the software environment used to build, operate, and govern blockchain solutions for business use.
Enterprise Web3 Stack — An enterprise Web3 stack is the combination of infrastructure, middleware, wallets, data services, and governance tools needed to run blockchain applications in a business context.
Fractional Ownership — Fractional ownership splits an asset into smaller interests so multiple parties can own portions of it.
Gas Fees — Gas fees are the transaction charges paid to process activity on a blockchain network.
Governance Framework — A governance framework sets the rules, roles, approvals, and controls used to manage a blockchain initiative.
Governance Token — A governance token gives holders a formal role in voting or influencing decisions within a blockchain ecosystem.
Hard Fork — A hard fork is a fundamental, backward-incompatible change to a blockchain's protocol rules.
Identity Layer — An identity layer is the set of tools and standards used to recognise, verify, and manage participants in a digital system.
Immutable Ledger — An immutable ledger is a record designed to be extremely difficult to alter once entries have been confirmed.
Intent-Based Transactions — Intent-based transactions let a user specify the desired outcome of a transaction while the system determines the best execution path.
Interoperability — Interoperability is the ability of different blockchain systems to exchange data and assets seamlessly.
Inventory Visibility — Inventory visibility is the ability to track stock levels, movement, and status across locations and partners.
KYC/AML Integration — KYC/AML integration connects blockchain workflows with customer verification and anti-money-laundering controls.
Layer 1 — Layer 1 is the base blockchain network where transactions are ultimately recorded and secured.
Layer 2 — Layer 2 refers to scaling solutions built on top of a base blockchain to increase transaction speed and reduce costs.
Lending Protocol — A lending protocol is a blockchain-based system for issuing, managing, or settling loans.
Liquidity Pool — A liquidity pool is a pool of digital assets made available to support trading, lending, or other market activity.
Liquidity Provision — Liquidity provision is the act of supplying assets so a market or protocol can facilitate transactions efficiently.
Logistics Automation — Logistics automation uses software and connected data to trigger, streamline, or monitor supply chain workflows.
Modular Blockchain — A modular blockchain separates functions such as execution, data availability, and settlement into distinct layers or services.
Multi-Chain Architecture — Multi-chain architecture is a system design that uses more than one blockchain to support a product or workflow.
Multi-Signature Wallet — A multi-signature wallet requires multiple approvals to authorise a transaction, distributing control across several parties.
Network Participation — Network participation refers to the roles and actions through which users, validators, or organizations contribute to a blockchain ecosystem.
Network Throughput — Network throughput is the volume of transactions or data a blockchain network can process in a given period.
Node Infrastructure — Node infrastructure is the network of servers and software that keeps a blockchain running and available.
Non-Fungible Token (NFT) — A non-fungible token (NFT) is a unique digital token used to represent ownership of a specific item, right, or asset.
Off-Chain Data Integration — Off-chain data integration brings external data or system events into blockchain-based processes.
Off-Chain Transaction — An off-chain transaction occurs outside the main blockchain and is later reconciled or settled back to it when needed.
On-Chain Governance — On-chain governance is a decision-making model where rules or votes are executed directly through blockchain mechanisms.
On-Chain Settlement — On-chain settlement occurs when final transfer of value is completed directly on a blockchain ledger.
On-Chain Transaction — An on-chain transaction is recorded directly on a blockchain and becomes part of the permanent ledger.
Oracle Network — An oracle network is a group of services that provide external data to blockchain-based applications.
Oracles — Oracles are tools that bring external data, events, or triggers into blockchain systems.
Payment Rail — A payment rail is the underlying system that moves money or value between parties.
Permissioned Blockchain — A permissioned blockchain restricts network access to approved participants, enabling controlled collaboration between organizations.
Private Blockchain — A private blockchain is a restricted network operated by a single organization or consortium, designed for internal or partner use.
Programmable Payments — Programmable payments are payments that execute automatically according to predefined rules or events.
Proof of Stake — Proof of Stake is a consensus model in which validators are selected based on assets they have committed to the network.
Proof of Work — Proof of Work is a cryptographic consensus mechanism that requires participants to perform computational work to validate transactions and secure a blockchain network.
Provenance Tracking — Provenance tracking records where an item came from, how it moved, and what happened to it over time.
Public Blockchain — A public blockchain is an open network that anyone can access, where transactions are transparent and validated by a distributed community.
Public Key Infrastructure (PKI) — Public Key Infrastructure (PKI) is the framework of keys, certificates, and processes used to secure digital communications and identity.
Quantum Resistance — Quantum resistance refers to the design of cryptographic systems that remain secure against attacks by quantum computers
Real-Time Settlement — Real-time settlement is the immediate completion of a transaction without waiting for end-of-day or batch processing.
Real-World Asset (RWA) Tokenization — RWA tokenization represents physical or traditional financial assets as digital tokens on a blockchain.
Refi — Regenerative Finance is an emerging movement within the blockchain and Web3 ecosystem that uses decentralized financial infrastructure to fund, incentivize, and verify activities that generate measurable positive environmental or social outcomes.
Regulatory Compliance — Regulatory compliance is the process of meeting legal, reporting, and control requirements set by regulators.
Restaking — Restaking allows already staked assets to be used again to help secure additional services or protocols.
Risk Scoring — Risk scoring assigns a measurable risk level to users, transactions, or activities based on defined indicators.
Rollup — A rollup is a scaling technique that processes transactions off-chain and submits them in batches to the main blockchain.
Self-Custody — Self-custody is the practice of managing and controlling digital assets directly, without relying on a third-party provider.
Settlement Layer — A settlement layer is the part of a system where transactions are finalised and recorded as complete.
Sidechain — A sidechain is a separate blockchain connected to another network so activity can occur outside the main chain.
Smart Contract — A smart contract is self-executing code that automatically enforces rules and agreements when predefined conditions are met.
Smart Contract Audit — A smart contract audit is an independent review of code, logic, and controls before deployment.
Stablecoin — A stablecoin is a digital asset designed to maintain a stable value, typically by being pegged to a fiat currency or reserve asset.
Supply Chain Traceability — Supply chain traceability uses blockchain to track the origin, movement, and status of goods across a supply network.
Token Standards — Token standards are the technical specifications that define how tokens behave and interact on a blockchain network.
Tokenization — Tokenization is the process of converting ownership rights of an asset into a digital token that can be issued, transferred, and managed on a blockchain.
Tokenized Fund — A tokenized fund is an investment fund whether a money market fund, a bond fund, a private equity vehicle, or any other pooled investment structure.
Tokenomics — Tokenomics is the study and design of the economic systems that govern how digital tokens are created.
TradFi — TradFi (Traditional Finance) is the term used within the blockchain, crypto, and Web3 ecosystem to refer to the conventional financial system
Transaction Finality — Transaction finality is the point at which a transaction can be treated as irreversible.
Transaction Monitoring — Transaction monitoring is the ongoing review of transaction activity to detect suspicious patterns, breaches, or policy issues.
Utility Token — A utility token is a digital token that provides access, usage rights, or participation within a platform or network.
Validator — A validator is a network participant responsible for checking transactions and helping confirm new blocks.
Verifiable Credentials — Verifiable credentials are digitally signed claims that can be independently verified without needing to contact the issuer.
Wallet — A wallet is the tool or interface used to hold the credentials needed to access, send, and receive digital assets.
Web3 — Web3 is an idea for a new iteration of the World Wide Web that incorporates concepts such as decentralization, blockchain technologies, and token-based economics.
Wrapped Tokens — Wrapped tokens are blockchain assets represented on another network in tokenized form.
Yield Farming — Yield farming is the practice of actively allocating digital assets across different DeFi protocols and liquidity pools to maximize the return earned on those assets
Zero-Knowledge Proof — A zero-knowledge proof allows one party to prove a statement is true without revealing the underlying data.