Skip to main content
Hero Banner
cypto glossary banner

A glossary of crypto and blockchain terminology

From smart contract and oracle to metaverse and web 3.0, the crypto and blockchain space can be a confusing hodgepodge of unfamiliar and poorly defined terms.

Here we provide a glossary of key terms to help people navigate this evolving space. We keep the definitions succinct—although each term really merits its own dedicated article.

For more context around the terms, please read our reports Tokens on a chain: A role for banks in cryptocurrencies, crypto collectibles and everything in between and A new set of building blocks: Blockchain in retail.

 

 

 

 

blockchain illustration

Blockchain

Immutable records of ownership that are generated once devices connected to the blockchain reach a consensus over a transaction’s validity.

 

Blockchain layers

 

Blockchain types

  • Permissionless: a blockchain open to the public.
  • Private: a closed blockchain network that only allows known devices to operate.
  • Permissioned: a blockchain available to users that meet the criteria determined by a central authority; it may operate as a public or a private network.

Central bank digital currency (CBDC)

A digital currency issued and backed by a central bank that runs on a centrally permissioned blockchain as an alternative to cash.

 

Cryptocurrency

A cryptographically secured digital currency that is transacted as tokens on a blockchain.

 

Cryptocurrency wallet

A storage device for a private key—which allows access to cryptocurrency holdings and the signing of transactions—that is linked to a public key, which functions as an account number.

 

Decentralized app (DApp)

An application. that runs on the application layer of a blockchain.

 

 

 

 

 

cryptocurrency illustration

 

 

 

 

 

crypto chain with person sitting

Decentralized autonomous organization (DAO)

A form of cooperative where voting rights on communal investments are tied to specific kinds of utility tokens known as governance tokens.

 

Decentralized exchange (DEX)

A cryptocurrency exchange that allows anonymous trading by making markets automatically through liquidity pools of invested assets and then accepting trades via smart contracts.

 

Decentralized finance (DeFi)

A blockchain-based financial system that does not rely on intermediaries to maintain trust.

 

Decentralized oracle network (DON)

A network of oracles that prevents one centralized oracle from dominating the outcome of a smart contract.

Metaverse

An interactive online environment with an inbuilt on-chain economy.

 

Non-fungible token (NFT)

A record of ownership on a blockchain of a unique or rare asset that cannot be transacted in a like-kind exchange.

 

Oracle

An interface that provides dynamic off-chain inputs, such as financial market data or supply chain events, to on-chain smart contracts.

 

Smart contract

A fixed piece of code in the application layer of a blockchain that self-executes an agreement between parties when certain events happen, such as the initial creation of a token or its transfer to a new owner.

 

 

 

 

 

illustration two people sitting on blocks

 

 

 

 

 

crypto illustration c

 

Stablecoin

A cryptocurrency pegged to a stable asset, such as a fiat currency.

 

Token

A record of ownership on a blockchain of a fungible or non-fungible asset.

 

Utility token

A usually fungible, but sometimes non-fungible, token that provides access to an organization’s services and is also known as a governance token when granting voting rights within a decentralized autonomous organization (DAO).

 

Web 3.0

A yet to be defined concept of a decentralized internet following on from the user-generated dynamic content that characterizes Web 2.0 relative to the passive content of Web 1.0.

Tancho Fingarov
Tancho Figarov Senior Principal of Business Development

Related Resources

tokens on a chain tile image
Report
Tokens on a chain: A role for banks in crypto

In 2009, the first successful decentralized cryptocurrency was launched. In 2021, a piece of digital artwork was auctioned for a value of US$69 million. Two landmark events 12 years apart. The auction house’s acceptance of cryptocurrency for the purchase of the artwork was not just a token gesture.

Guest Payment Past
Blog
The guest of payment past: How Click to Pay and tokens are redefining holiday spend

Online sales are more important than ever. But many customers don’t make it through the checkout process. Read about two solutions now addressing that challenge.

Open Banking - Egypt
White Paper
A Global Microcosm: Open Banking in the Gulf States and Egypt

The Gulf Cooperation Council (GCC) member states and Egypt are becoming hubs for financial technology companies (fintechs). And fintech growth is increasingly reliant on open banking. Learn about the variety of approaches to open banking in the region and how they fit into a global context.

Mastercard Data & Services
Report
Marketing technology for banks

Mastercard Client Services has helped banks and issuers strategize, design and execute MarTech roadmaps. Here are six steps that can help banks and issuers get started on building a strong MarTech stack.