A CLEARER VOCABULARY
The Digital Assets Glossary
Use this glossary to unpack the terms that appear across our digital asset guides. Definitions provide a starting point, while the linked topic pages explain mechanisms and tradeoffs in more detail. A familiar word can still describe different arrangements in different systems.
- Digital asset
- An asset represented or administered digitally. On this site, the term includes crypto assets, digital claims, and domain registrations whose rights and control can differ.
- Blockchain
- A record organized into linked blocks and maintained under a network's validation and consensus rules. Its security and operating assumptions depend on the specific system.
- Token
- A digital unit recorded by a system. It may serve a network function or represent a defined claim; its name alone does not establish rights.
- Wallet
- Software or hardware used to interact with digital assets and manage signing or access. The assets' records usually remain on the relevant network or service.
- Private key
- Secret cryptographic information used to create signatures authorizing particular actions. Control of a key can confer control over associated assets or account permissions.
- Custody
- The arrangement for controlling assets and the authority to move them. Review who holds keys, approves transfers, maintains records, and handles recovery.
- Consensus
- The process by which network participants coordinate on an accepted record under the system's rules. Different networks use different mechanisms and security assumptions.
- Proof of work
- A mechanism using computational work to support block production and chain selection. Bitcoin's rules evaluate accumulated valid work as part of coordinating its ledger.
- Proof of stake
- A family of mechanisms in which participants commit stake to take part in consensus. Selection, penalties, rewards, and finality rules vary by protocol.
- Smart contract
- Code executed according to a platform's rules. It can automate defined actions but does not automatically establish legal enforceability or verify outside information.
- Gas
- A unit used by Ethereum to measure computational work. Transaction fees depend on the amount of gas used and the applicable price per unit.
- Stablecoin
- A token designed to track a reference value, such as the US dollar. Its backing, redemption process, and operating dependencies require separate examination.
- Redemption
- Returning an asset or claim through a process defined by its arrangement to receive a specified entitlement. It differs from selling to another buyer.
- Liquidity
- The practical ability to transact in an asset at a given size, cost, and time. Technical transferability alone does not establish a willing buyer.
- Bridge
- A mechanism connecting blockchain systems for assets or information. Designs can introduce additional validation, custody, software, and recovery dependencies.
- Domain name
- A readable internet name maintained through a registration arrangement and used with DNS. Registration, website hosting, email, and brand rights are separate elements.
- Top-level domain
- The final label of a conventional domain, such as .com or a country-code ending. Extensions can have different operating and registration conditions.
- Tokenization
- The representation or administration of an asset or claim using tokens. Its usefulness depends on the connection between the digital record and the underlying rights.
- Real-world asset (RWA)
- An asset or right outside a blockchain that a tokenization arrangement may represent, such as a financial claim or commodity. Explore the rights and records involved.
- Net asset value (NAV)
- The value of an investment vehicle's assets minus its liabilities. Per-share NAV divides that amount by outstanding shares and may differ from a traded price.
- Fund
- A pooled investment arrangement governed by its own structure and documents. The mandate, fees, custody, valuation, and exit terms determine how it operates.
- Due diligence
- A structured examination of claims, documents, controls, and evidence. It makes assumptions and unanswered questions visible without guaranteeing a particular outcome.
For additional Ethereum-specific terminology, consult the Ethereum glossary. Terms should be interpreted within the rules and documentation of the system being discussed.