---
id: glossary
title: Glossary
description: Helpful definitions for the wiki.
sidebar_position: 8
---

---
## Address
A string of letters and numbers used to receive or send cryptocurrencies, tokens, or NFTs.

## Airdrop
A marketing campaign used by crypto developers to distribute tokens to their early adopters and followers of their projects.

## Block
An aggregation of chunks.

## Block Explorer
A software for visualizing blocks, transactions, and blockchain network metrics (e.g., average transaction fees, hashrates, block size, block difficulty).

## Block Height
The block height is a sequential number of the most recent block in the blockchain.
In NEAR, there is not guaranteed to be a block for each sequential number, e.g. block 982 does not necessarily exist.

## Block Reward
A reward (typically cryptocurrency) awarded to publishing nodes for successfully adding a block to the blockchain.

## Blockchain
The technology underpinning cryptocurrency.
Blockchain is a technology that can safely store transaction records on a peer-to-peer network instead of storing them in a single location.
Independent servers around the world, called nodes, make up the network that operates the blockchain. 

## Bounty
A reward users receive from a project, or blockchain.
Projects that give bounties can include dApps and DAOs.

## Centralized Network
A network configuration where participants must communicate with a central authority to communicate with one another.
Since all participants must go through a single centralized source, the loss of that source would prevent all participants from communicating.

## Chunk
An aggregation of transactions which are executed within a particular shard.

## Cryptocurrency
A cryptocurrency system can be understood as a system intended for the issuance of tokens which are intended to be used as a general or limited-purpose medium-of-exchange, and which are accounted for using an often collectively-maintained digital ledger making use of cryptography to replace trust in institutions to varying extents.

Against such a backdrop, the singular term cryptocurrency can mean a token, intended to be used as a general or limited-purpose medium-of-exchange, issued via a cryptocurrency system.


## Custody
Custody, in a crypto context, refers to who owns and secures the private key that proves you own the funds in your wallet.

## Decentralization [in the blockchain space]
Decentralized and distributed modes of organization are well defined in computer science discourses and denote a particular network topology.

Even there, they can be understood either as an engineering principle, a design aim, or an aspirational claim. In the decentralization discourse these three dimensions are often conflated without merit.
A decentralized network design might not produce decentralizing effects and might not either necessarily be decentralized in its actual deployment.

When the technical decentralization discourse starts to include social, political, or economic dimensions, the risk of confusion may be even larger, and the potential harms of mistaking a distributed system for something it is not, even more dangerous.
Individual autonomy, the reduction of power asymmetries, the elimination of market monopolies, direct involvement in decision making, and solidarity among members of voluntary associations are eternal human ambitions.

It is unclear whether such aims can now suddenly be achieved by particular engineering solutions.
An uncritical view on decentralization as an omnipotent organizational template may crowd out alternative approaches to creating resilient, trustworthy, equitable, fault resistant technical, social, political or economic modes of organization.

## Decentralized Application (DApp)
A Decentralized Application (DApp) is software that exists or runs on a blockchain.

## Decentralized Autonomous Organization (DAO)
Is a blockchain-based system that enables people to coordinate and govern themselves mediated by a set of self-executing rules deployed on a public blockchain, and whose governance is decentralized (i.e., independent from central control).

## Decryption
The process of changing ciphertext into plaintext using a cryptographic algorithm and key.

## Delegated Proof of Stake (DPoS)
This is a consensus algorithm where a stakeholder (somebody who owns a token) can give their votes to a third-party who will validate new blocks for the stakeholder.
The number of votes is proportional to the number of tokens.

## Digital Assets
A digital asset (also known as a virtual asset) is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes.
Virtual assets do not include digital representations of fiat currencies, securities and other financial assets that are already covered elsewhere in the FATF Recommendations.

## Double Spending
An attack where a blockchain network user attempts to explicitly double spend a digital asset, or transacting with the same set of digital assets more than once.
This is a problem which has plagued many digital money systems, and a problem that most blockchain networks are designed to prevent.

## Epoch
A time bucket during which many blocks are produced.
Certain calculations are performed only based on this time window.

## Formal Verification
A systematic process that uses mathematical reasoning and mathematical proofs (i.e., formal methods in mathematics) to verify that the system satisfies its desired properties, behavior, or specification (i.e., the system implementation is a faithful representation of the design).

## Full Node
A blockchain node that stores the blockchain data, passes along the data to other nodes, and ensures that newly added blocks are valid and authentic.

## Fungibility
A fungible asset can be exchanged for an equal asset of the same type.
For example, tokens are fungible, so 1 NEAR is equal to any other 1 NEAR.

## Gas
Gas fees are payments made by users to compensate for the computing energy required to process and validate transactions on a blockchain.

## Genesis Block
The first block of a blockchain network; it records the initial state of the system.

## GitHub
GitHub is a version control system currently used by this Wiki to update content.

## Hash
A cryptographic hash function, such as SHA-256, which maps strings of bits to fixed-length strings of bits, satisfying the following two properties: it is computationally infeasible to find for a given output an input which maps to this output; and it is computationally infeasible to find for a given input a second input which maps to the same output.
The output of a hash function, is also known as a message digest, digest, hash digest, or hash value.

## Hash Rate
The number of cryptographic hash functions a processor can calculate in a given time, usually denominated as hashes per second.

## Interoperability
The ability of one entity to communicate with another entity.

## InterPlanetary File System (IPFS)
The InterPlanetary File System (IPFS) is a protocol and peer-to-peer network for storing and sharing data in a distributed file system.

## Layer 1
A Layer 1 network can validate and finalize transactions without using another network.

## Layer 2
A Layer 2 network is built on top of a base network, and works as a secondary framework on top of an existing network.

## Liquidity
This is how easy it is to swap a token on one network for a token on another network.

## Liquidity Providers (LP)
A liquidity provider is a user who funds a liquidity pool with crypto assets they own to make trading on the platform possible.
Liquidity Providers earn passive income on their deposit.

## Mainnet
Mainnet is the term used to describe when a blockchain protocol is fully developed and deployed.
This is a live blockchain, where real transactions are run.

## Metadata
Information describing the characteristics of data including, for example, structural metadata describing data structures (e.g., data format, syntax, and semantics) and descriptive metadata describing data contents (e.g., information security labels).
Sometimes called the key's attributes.

## NEAR Foundation (NF)
A non-profit foundation headquartered in Switzerland that is responsible for contracting protocol maintainers, funding ecosystem development, and shepherding core governance of the NEAR protocol.

## NEAR Protocol (NEAR)
Also referred to as NEAR Platform or NEAR Network, these terms are often used interchangeably to mean the software platform to which smart contracts can be deployed.
Technically speaking, the “protocol” is the set of rules which define the “platform”, the “network” is just the networking layer or the grouping of nodes who make it up, and “NEAR” is just what that platform is called… but popular usage has caused their meanings to effectively merge so we use them synonymously in most cases. 

## Node
An individual system within the blockchain network.

## Non-Fungible Token (NFT)
Non-Fungible Tokens (NFTs) are digital certificates of ownership for digital assets.
These digital certificates are published into an [NEP-171](https://nomicon.io/Standards/Tokens/NonFungibleToken/Core) token, and once written, they're secured on the blockchain.

To create NFTs, the identifying information for these unique digital assets must be recorded on a smart contract.
The information on the smart contract is what makes an NFT unique.
Anything can be turned into an NFT, with the most popular being videos, media files, or images.

Non-fungible means that they can't be exchanged for an "equal" asset because they are unique. They also can't be divided into smaller parts, so you can't trade part of an image, or part of a ticket.

## Off-Chain
Refers to data that is stored or a process that is implemented and executed outside of any blockchain system. 

## Open Web Sandbox (OWS)
A community based organisation within the NEAR Protocol ecosystem.

## Oracle
A tool which transfers off-chain data on-chain and vice versa.

## Paper Wallet
A paper wallet is an offline method (written on a piece of paper) that includes a user’s private key, public key, and wallet address that are used to store and transact cryptocurrencies online with an exchange or blockchain node.

## Peer-to-Peer (P2P)
A peer-to-peer blockchain network works by connecting different computers (or nodes) together so they are able to work in unison.
This process creates a censorship resistant, open, public computing network that allows important data and other functionalities to be shared across the network.

## Private Key
A private key is an extremely large number that is used in cryptography, similar to a password.
They are used to create verifiable digital signatures while keeping the key private.
They also indicate ownership of a blockchain address.

## Proof of Stake (PoS)
A consensus model where the blockchain network is secured by users locking an amount of cryptocurrency into the blockchain network, a process called staking.
Participants with more stake in the system are more likely to want it to succeed and to not be subverted, which gives them more weight during consensus.

## Proof of Work (PoW)
Proof of work (PoW) is a form of adding new blocks of transactions to a cryptocurrency's blockchain.
The work, in this case, is generating a hash (a long string of characters) that matches the target hash for the current block.

## Reputation
In a blockchain-based system is a digital representation of an entity’s standing or status in a specific domain.
Reputation is usually derived from aggregated peer-evaluation of the entity’s past actions.
It can be leveraged both explicitly through functions in the code (voting power, economic rights) or implicitly as a means of signaling an entity’s trustworthiness.

## Seed Phrase
A seed phrase, also referred to as a "recovery phrase" or "recovery seed phrase", is a 12, 18, or 24-word code that is used as a backup access mechanism when a user loses access to a cryptocurrency wallet or associated private key.
You should keep your seed phrase safely so that you can regain access to a locked wallet.

## SHA-256
Abbreviation for Secure Hash Algorithm 256-bit, a hash algorithm that can be used to generate digests of messages.
The digests are used to detect whether messages have been changed since the digests were generated.

## Smart Contracts
Are code deployed in a blockchain environment, or the source code from which such code was compiled.
It is executed in a distributed manner by the miners of the underlying blockchain network if and when the underlying conditions are met.
Execution of a smart contract is triggered via a blockchain transaction and will produce a change in the blockchain state.

## Staking
Protocol-defined token collateralization earning yields and/or providing privileges, either at the base layer (in proof-of-stake consensus models) or at the smart contract layer.

## Staking Pool
A staking pool allows multiple stakeholders (or bagholders) to combine their computational resources as a way to increase their chances of being rewarded.

## Testnet
This is a separate blockchain on a network where developers can put new features through their paces without worrying about jeopardizing the main network.

## Token Lockup
This refers to a time period during which crypto tokens cannot be exchanged or traded.

## Transactions Per Second (TPS)
This is the speed that a blockchain network processes transactions.

## Wallet
A wallet, in the blockchain sense, stores your virtual assets.

## Web 3.0
This refers to an iteration of the web based on blockchain technology.
Decentralization is an important aspect of Web 3.

## White Paper (WP)
A white paper is an informational document from an organization the explains complex topics.
