Web3 Glossary
54 terms, 3 sentences each, no fluff — from seed to nonce. With links to tools and guides where you can touch every term.
54 terms
No match — try an English term (e.g. “seed” instead of “words”).
Seed Phrase
12 or 24 English words per BIP39 — your wallet's master key. All private keys and addresses derive from it deterministically: same words, same accounts, in every compatible wallet on earth. Whoever holds it holds everything — so paper or steel, two locations, never digital.
Private Key
The secret number signing transactions — one per chain, derived from the seed (BIP32/BIP44). It stays secret and, on hardware wallets, never even leaves the chip. Rule: private key and seed are seen by nobody — no support, no verification, no airdrop.
Address
The public receiving address — computed from the private key via one-way math (bc1… on Bitcoin, 0x… on Ethereum, Base58 on Solana). Reversing is infeasible, sharing is fine. Whether an address is formally valid is what the Address Validator checks via format and checksum.
Entropy
True randomness, origin of everything — in the browser via window.crypto.getRandomValues(), a cryptographically secure OS source. 256 bits mean 2²⁵⁶ possibilities: more than atoms in the observable universe. Brute force is not an option; weak randomness (e.g. Math.random()) has been drained before.
BIP39 / BIP32 / BIP44
Three open standards nearly every wallet rests on: BIP39 turns randomness into 12–24 words, BIP32 builds a hierarchical key tree from them (one master, arbitrarily many children, deterministically), BIP44 addresses the branches per chain (m / purpose' / coin' / account' / …). Open means: your words work in every compatible wallet — no vendor lock-in.
Derivation Path
The "folder address" in the key tree, e.g. m/84'/0'/0'/0/0 for Bitcoin's first native SegWit address or m/44'/60'/0'/0/0 for Ethereum's first account (60 = Ethereum, 501 = Solana). The Wallet Generator uses exactly the standard paths — which is why its addresses import into Sparrow, MetaMask, or Phantom.
Checksum
Error detection built into the address: mistyped characters fail validation instead of sending money to a wrong address. Depending on the system it lives in bech32 (Bitcoin SegWit), Base58Check (Bitcoin legacy, double SHA-256), or letter casing (EIP-55 on Ethereum). Verify instead of hope: Address Validator.
EIP-55
Ethereum's trick for fitting a checksum in without a single extra character: it lives in the hex address's upper/lower casing (determined via Keccak hash). An all-lowercase address is formally fine but carries no checksum — typos then go unnoticed. Always use the mixed-case spelling.
Bech32 / Bech32m
Bitcoin's modern address encodings: bech32 (BIP173) for native SegWit addresses (bc1q…), bech32m (BIP350, new checksum constant) for Taproot (bc1p…). Lowercase, error-detecting, QR-friendly — and not interchangeable: a v0 address with a bech32m checksum is invalid and vice versa.
SegWit & Taproot
Two Bitcoin upgrades with their own address types: SegWit (2017, bc1q… or 3…) separates signatures and lowers fees; Taproot (2021, bc1p…) brings Schnorr signatures and more discreet smart contracts. Old are 1… addresses (legacy, Base58Check) — they work but cost more.
Wei, Gwei & Gas
Ethereum's three units for the same currency: Wei (smallest unit, 10⁻¹⁸ ETH — everything counts in Wei internally), Gwei (10⁹ Wei — gas prices are quoted in it, e.g. 21 Gwei), Ether (trading unit). Rule of thumb: 1 ETH = 10⁹ Gwei = 10¹⁸ Wei — convert exactly (BigInt, no rounding) in the ETH Unit Converter.
Nonce
Your Ethereum address's transaction counter: strictly ascending from 0, gapless. Each transaction raises it by one — a missing nonce (e.g. soured in the mempool) blocks everything after it. Fix: deliberately send the gap or cancel via replacement (same nonce, higher gas price). Details: What Is a Nonce?.
UTXO
Unspent Transaction Output — Bitcoin bookkeeping knows no balances, only unspent coins. Transactions spend coins (inputs) and create change (outputs); the fee is the difference between them. Sweeping up many tiny coins is expensive (signatures) — consolidate while fees are low. Counterpart: account model.
Account Model
Ethereum and Solana keep real accounts: address → balance (plus nonce on Ethereum). Fees are explicit (gas price × usage), the amount barely matters — a simple transfer always costs the same. Address reuse is normal; privacy comes from separation, not change. Counterpart: UTXO.
Mempool
The queue of unconfirmed transactions on every network node. Under load, transactions bid for block space via fees — bid too low and you wait (or stall, see nonce). The mempool is the world's most honest fee market: live viewable, no signup, no mercy.
Self-Custody
Holding the keys yourself instead of trusting an exchange ("not your keys, not your coins"). All freedom — no forgot-password, no support undoing anything. Prerequisites: understood seed storage, tested backup, a plan for worst cases. Start: How a Wallet Actually Works.
Hardware Wallet
A separate device generating keys and signing transactions without ever revealing the key — even a compromised computer only sees finished signatures. The standard for savings. But it doesn't protect against misuse: back up the seed by hand, test recovery, verify the receiving address on the device display. Ritual: Using a Hardware Wallet Right.
Multisig
One account, several keys: only e.g. 2-of-3 signatures move the money. No single loss, theft, or mistake is fatal — ideal for companies, families, and inheritance planning. Price: more setup complexity and a documented process of who holds which key where.
Watch-Only & xpub
Observe without spending: the extended public key (xpub for legacy, zpub for native SegWit) derives all addresses of an account — view balances yes, spend no. Perfect for tax tools and stocktaking without ever touching the private key. But beware: an xpub reveals your entire payment history — only give it to services you grant that.
Paper Wallet
Keys on paper: print (or copy) seed or address and store offline — fireproof only on steel. The Wallet Generator has a dedicated print view for exactly this (seed, addresses, and QR codes only, no buttons or explanations). Fine for dust amounts and gifts; for savings prefer hardware plus tested backup.
Public Key
The bridge between private key and address: from the secret key, elliptic-curve math first produces a public key, and from that the address — and the way back is impossible. That is why you can share the address, but the public key is usually kept too (it can leak address history). For most users the public key is invisible plumbing, but it explains why private keys must stay strictly secret.
Hash
A digital fingerprint: any input is compressed to a fixed length by a one-way function (e.g. SHA-256, Keccak-256) — Bitcoin and Ethereum rely on it for almost everything. The original input cannot be recovered from the hash, and tiny changes produce wildly different outputs. Checksums, block chaining, and address derivation are hash applications that make the system trustless.
Token
Not every "coin" has its own blockchain: tokens run on an existing chain, usually Ethereum. ERC-20 is the standard for interchangeable tokens like USDC or Uniswap, ERC-721 for unique NFTs. They are essentially smart-contract accounts that record balances and ownership — the real value comes from the contract underneath.
Smart Contract
Programmable code on the blockchain that executes rules automatically and immutably — a contract that needs no notary. On Ethereum they run inside the EVM and pay for every action with gas. Code bugs are expensive: once deployed, nobody can just "turn it off", so auditing must come before trust.
Blockchain
A distributed, chronologically chained ledger: each block stores transactions and the hash of the previous one, making retroactive changes impossible. Instead of a bank, thousands of nodes validate consensus — open, permissionless, but with a cost per operation. It is the canvas on which addresses, tokens, and smart contracts exist.
Cold Wallet & Hot Wallet
Hot wallets are online (browser extensions, apps) and convenient — but attackable. Cold wallets keep the private key offline: hardware wallets, paper wallets, or even computers never connected to the internet. Hot is fine for everyday and dust; cold is the minimum for savings and company treasuries.
Testnet & Mainnet
Mainnet is the real network with real money; testnet (Ethereum: Sepolia, Solana: Devnet, Bitcoin's own testnet) simulates the same protocol with worthless coins from a faucet. Trying a new tool, an unfamiliar address, or a freshly built wallet on testnet first costs nothing but a few clicks. The classic mix-up: a mainnet address technically accepts testnet coins, but they're worthless — real money never accidentally lands on the wrong network.
Dust & Dusting Attack
Dust is tiny UTXOs, often worth less than the fee to spend them — digital loose change at the bottom of the wallet. In a dusting attack, someone deliberately sends tiny amounts to many addresses, hoping that later merging them (via coin control) links those addresses to the same owner and breaks privacy. The countermeasure: leave suspicious dust unspent instead of consolidating it, and use coin-control features that let you choose inputs deliberately.
Replace-By-Fee (RBF)
Replace-By-Fee (BIP125) lets you replace a still-unconfirmed Bitcoin transaction with a new one at a higher fee — handy when the mempool isn't moving. It only works if the original transaction opted in with the RBF flag; otherwise you're stuck waiting or need a child-pays-for-parent transaction. Ethereum's equivalent is simpler: same nonce, higher gas price, done.
BIP39 Passphrase (25th Word)
An optional, self-chosen extra word (or phrase) added to the seed phrase — cryptographically treated as a 25th word. Every passphrase derives a completely separate, hidden wallet from the same seed: anyone who only knows the 24 words sees an empty or unimportant account, while the real funds sit behind the passphrase. The catch: the passphrase itself is stored nowhere — forget it, and the wallet behind it is gone for good.
Vanity Address
An address with a chosen pattern at the start (e.g. bc1qcafe… or 0x000…), produced by brute-forcing through thousands to millions of random keys until one matches — no shortcut exists. The longer the desired pattern, the exponentially longer the search: each extra character multiplies the effort. Security note: vanity addresses from third-party online generators are a risk — the private key has to be generated locally, or someone else knows it too.
Consensus: PoW & PoS
How thousands of strangers' computers agree on one shared truth without a boss: Proof of Work (Bitcoin) has miners compete to solve a computational puzzle — the winner writes the next block and earns a reward. Proof of Stake (Ethereum since 2022, Solana) replaces raw computing power with capital at risk: validators lock up their own coins as collateral, and misbehaving costs them that stake. Both solve the same problem — security without trust — they just charge for it differently: energy for PoW, locked capital for PoS.
RLP
Recursive Length Prefix is Ethereum's serialization format: nested byte lists, field by field, with no field names at all — every transaction is exactly such a list. The type sits in the very first byte (0xc0… legacy, 0x01 type 1, 0x02 type 2). If you can read raw hex, you understand what a wallet actually signs.
EIP-1559
Ethereum's fee system since 2021: instead of one gas price there is a base fee that rises and falls with demand — and gets burned instead of paid to miners. Users add a priority fee (tip) and set a max fee cap. Transactions of this kind are called type 2 and are today's standard; the difference between max fee and actual cost is refunded.
EIP-191
The standard for signed messages: a wallet signs arbitrary text, anyone can check with address and signature whether the statement really comes from that address — with no blockchain transaction at all. The prefix \x19Ethereum Signed Message prevents a message from being mistaken for a transaction. Typical uses: login proofs ("Sign in with Ethereum") and authenticity attestations.
x402
A payment protocol for AI agents: instead of API keys, an agent answers HTTP status 402 Payment Required with a crypto payment (usually stablecoins) and receives the response — machine-readable, no account, in seconds. Since 2025 several protocols compete for this standard; whether and which one wins is open. Relevant because agents could buy services on their own for the first time.
Quishing
Phishing via QR code: humans cannot see what is inside the code — exactly what attackers exploit, from swapped stickers on parking meters to manipulated links in mails. A QR code only proves error-free transmission, never the sender. Defense: after scanning, compare the decoded address with the source and only then send — for crypto addresses a checksum check helps.
Satoshi (sat)
Bitcoin's smallest unit, named after its inventor's pseudonym: 1 BTC = 100,000,000 sat. Fees are quoted in sat/vByte, and everyday amounts increasingly in sats rather than fractions of a bitcoin. The Lightning Network even counts in millisatoshis (msat) internally — Bitcoin's counterpart to Ethereum's wei.
Halving
Every 210,000 blocks (about four years) the reward miners may create per block is cut in half — most recently in April 2024, from 6.25 to 3.125 BTC. Total supply therefore approaches just under 21 million; the rule lives in the protocol, not in a central bank's discretion. In the long run, transaction fees have to pay for the network's security.
Lightning Network
A payment network on top of Bitcoin: two parties open a payment channel with one on-chain transaction, then any number of payments move back and forth instantly and almost free — only closing the channel hits the blockchain again. Chained channels let you reach strangers too; invoices start with lnbc…. Ideal for small amounts, less so for large sums you leave untouched for years.
Confirmations & finality
A transaction is only safe once enough blocks build on top of it. On Bitcoin every new block (~10 minutes) counts as one confirmation; six are the convention for large amounts. Ethereum has real finality: after two epochs (about 13 minutes) a block could only be reverted if validators sacrificed huge amounts of their stake.
Soft fork & hard fork
How blockchains change their rules: a soft fork tightens them backwards-compatibly — old nodes keep running (examples: SegWit, Taproot). A hard fork loosens or changes them so old software rejects new blocks; if not everyone upgrades, the chain splits (Ethereum Classic 2016, Bitcoin Cash 2017). After a split your coins exist on both chains — beware of replay attacks and shady "claim" tools asking for your seed.
Block explorer
The search engine for a blockchain: enter an address, transaction hash or block number and see what happened — e.g. mempool.space for Bitcoin, Etherscan for Ethereum, Solscan for Solana. That way you check yourself whether a payment is confirmed instead of trusting a screenshot. Two rules: an explorer never needs your seed, and every lookup tells the operator which addresses you care about.
Stablecoin
A token tracking the value of a government currency — usually backed 1:1 by bank deposits and treasury bills (USDC, USDT, EURC). It combines blockchain speed with euro or dollar stability and is the backbone of agent payments and DeFi. The risk sits with the issuer: reserves, the freeze function in the contract and regulation — algorithmic stablecoins without real reserves have already collapsed (TerraUSD, 2022).
Layer 2 & rollups
Networks that batch transactions outside Ethereum and write only compressed data plus proof to the main chain — cents instead of euros in fees. Optimistic rollups (Arbitrum, Optimism, Base) assume honesty and allow a challenge window (withdrawals often take ~7 days), ZK rollups provide a mathematical validity proof. How decentralized a rollup really is varies a lot — L2BEAT rates this publicly.
Bridge
A bridge moves value between blockchains that know nothing about each other: usually the coin is locked on chain A and a "wrapped" copy is issued on chain B. Exactly these vaults are popular targets — the Ronin and Wormhole hacks (2022) together cost nearly a billion dollars. Rule of thumb: use each chain's official bridges, only move what you need, and don't park funds on the foreign side long-term.
DeFi
Decentralized finance: financial services as smart contracts — swapping, lending, borrowing, earning interest, without a bank or account opening. Anyone can inspect the code and participate around the clock; collateral and liquidations are handled automatically by the protocol. The flip side: bugs, manipulated price feeds and no deposit insurance — yield here is always a risk premium too.
DEX & AMM
A decentralized exchange (DEX) without an order book: instead of matching buyers and sellers, you trade against a liquidity pool whose price is set by a formula — for the classic automated market maker x · y = k. Large trades move the price (slippage), liquidity providers carry the risk of "impermanent loss". Before every swap: check the token address and set a slippage limit.
Oracle
Smart contracts only see their own blockchain — what a euro costs or who won a football match, they don't know. An oracle brings such external data on-chain, usually via a network of independent providers (e.g. Chainlink). Because DeFi loans and liquidations depend on these prices, manipulated oracles are among the most common causes of large exploits.
MEV & front-running
Maximal extractable value: the profit block producers and bots capture by cleverly ordering, inserting or dropping transactions. The classic is the sandwich attack: a bot spots your DEX swap in the mempool, buys before it and sells after — you pay the worse price. Protection: tight slippage limits and RPC endpoints that send transactions privately instead of through the public mempool.
Token approval
Before a DEX or any other contract may move your ERC-20 tokens, you grant an approval via approve — often unlimited and permanent. If the contract gets hacked or was a "drainer" from the start, it can pull the approved balance at any time, without another signature. So: approve only the amounts you need, be just as suspicious of gasless "permit" signatures, and revoke old approvals regularly.
Account abstraction
Turns the account itself into a programmable smart contract: multiple signatures, daily limits, recovery via trusted contacts, or fees paid by a third party (paymaster). ERC-4337 (since 2023) does this without a protocol change via separate "UserOperations"; EIP-7702 (Pectra upgrade, May 2025) lets regular addresses use contract code too. Opportunity and risk at once: a malicious delegation can take over an account just as completely.
ENS (.eth names)
The Ethereum Name Service translates readable names like alice.eth into addresses — much like DNS for websites. Names are rented yearly and can also store addresses on other chains, websites or profiles. Convenient, but no proof of authenticity: look at the resolved address before sending, because typo and look-alike names are a popular scam.
MiCA
The EU Markets in Crypto-Assets Regulation ((EU) 2023/1114) — the first comprehensive crypto rulebook of a major economic area. Stablecoin rules (e-money tokens and asset-referenced tokens) apply since June 2024, the rest since December 2024: exchanges, custodians and brokers need a licence as crypto-asset service providers (CASP), in Germany via BaFin. Genuine self-custody wallets and most NFTs are out of scope — your own keys remain your business.
Term understood — now what?
Looking up is the start, touching is the rest: generate a wallet, validate an address, convert units — all locally in the browser. And when real amounts, company setups, or agent payments are involved, a conversation helps.