1) Core Building Blocks
These are the primitives every chain relies on: how data is packaged, stored, executed, and verified. Master these to decode most whitepapers and docs.
Blockchain — append-only ledger of timestamped blocks linked by cryptographic hashes
Block — batch of transactions plus header (hash, timestamp, previous hash, Merkle root)
Transaction (tx) — signed instruction that changes state (e.g., transfer, contract call)
State — current record of balances/contract storage at a given block height
Node — machine running a client that participates in the network
Full node / Light client — full: verifies everything; light: verifies headers & proofs
Virtual Machine (EVM/WASM) — runtime that executes smart contract bytecode
Gas — unit measuring computation/storage; fees paid to execute transactions
Merkle tree — structure that enables efficient proofs a tx is in a block
Nonce — number used once (anti-replay / mining parameter / account tx counter)
Fork (soft vs hard) — protocol change; backward-compatible vs incompatible
Genesis block — first block; establishes initial state and parameters
These building blocks define how chains store data, run code, and keep a shared source of truth.
2) Networks, Consensus & Scaling
This group covers how participants agree on the next block and how chains scale without sacrificing security or decentralization.
Consensus — rules/algorithms nodes use to agree on valid blocks
Nakamoto consensus — probabilistic finality via longest/most-work/weight chain
Proof of Work (PoW) — miners expend energy to propose blocks
Proof of Stake (PoS) — validators stake tokens; weight & rewards tied to stake
Slashing — penalties for misbehavior (e.g., double-signing, downtime)
Finality (probabilistic vs deterministic) — how/when a block becomes irreversible
Liveness vs Safety — system keeps making blocks vs never finalizes conflicting blocks
Permissionless vs Permissioned — open participation vs vetted members
Layer 1 (L1) — base chain providing security and data availability
Layer 2 (L2) — protocols that inherit L1 security to scale (rollups, channels)
Optimistic rollup — assumes validity; challenges catch fraud
ZK rollup — validity proofs ensure correctness of bundled transactions
Payment/state channels — off-chain interactions with on-chain settlement
Sidechain — separate chain bridged to L1 with its own security model
Consensus secures agreement; layering and rollups scale throughput while leaning on L1 guarantees.
3) Cryptography & Security
Crypto primitives power identity, privacy, and integrity; security concepts explain common risks and defenses.
Public/private key pair — asymmetric keys for identity and signing
Address — hash/encoding of a public key; destination for assets
Digital signature — proves message authenticity & ownership without revealing the private key
Hash function (SHA-256/Keccak-256) — one-way mapping; small changes → big output changes
Elliptic curve crypto (e.g., secp256k1) — math underlying many key schemes
Seed phrase (mnemonic) — human-readable backup that derives keys (BIP-39)
Multisig / Threshold signatures / MPC — split control across multiple parties
Zero-knowledge proofs (zk-SNARK/zk-STARK) — prove a statement without revealing data
Merkle proofs / Patricia tries — efficient proofs of inclusion/state in light clients
Randomness / VRF — verifiable randomness used for fair validator/lottery selection
51%/Majority attack — adversary controls consensus weight to rewrite history
MEV (Maximal Extractable Value) — profit from transaction ordering/selection
Keys, hashes, and proofs underpin trustlessness; sound operational security reduces key and protocol risks.
4) Tokens, Economics, Apps & Governance
Here are the concepts that explain “why it matters” economically and how users actually interact with the ecosystem.
Coin vs Token — native L1 asset vs asset issued by a contract/protocol
Fungible tokens (ERC-20) — interchangeable units; basis of most DeFi assets
NFTs (ERC-721/1155) — unique or semi-fungible digital items
Stablecoins — price-pegged assets (fiat-backed, crypto-collateralized, algorithmic)
Tokenomics — issuance, supply schedule, utility, incentives, and sinks (burns)
Staking / Delegation — lock tokens to secure network and earn rewards
DApp — application with on-chain components and smart contracts
AMM / Liquidity pool — on-chain market making via formulas (e.g., x·y=k)
Impermanent loss — LP value divergence versus HODLing
Lending/Borrowing — collateralized credit primitives (health factor, liquidation)
Oracle — brings external data on-chain (prices, events)
DAO — on-chain governance using tokens or reputation to vote
Airdrop — token distribution to users, often to bootstrap communities
Tokens encode incentives, apps provide utility, and governance steers protocol evolution over time.
How to use this guide
Use these terms as a quick-reference when reading whitepapers, audits, and docs, or when evaluating projects and designing Web3 products.
Knowing the vocabulary speeds due diligence, improves threat modeling, and sharpens product decisions.
Helpful Links
Bitcoin Whitepaper (Satoshi Nakamoto): https://bitcoin.org/bitcoin.pdf
Ethereum Documentation: https://ethereum.org/en/developers/docs/
Hyperledger Fabric Docs: https://hyperledger-fabric.readthedocs.io/
NIST Blockchain Overview: https://www.nist.gov/blockchain
Chainlink Oracles Intro: https://chain.link/education/blockchain-oracles