Glossary

Definitions of common terms used within the crypto and digital asset industry

Airdrop

A marketing tactic in which a company sends tokens of their cryptocurrency into the wallet address of a member of a blockchain at no charge, to raise awareness of their cryptocurrency.

Blockchain

The fundamental basis of cryptocurrency. A blockchain is a digital ledger of transactions stored simultaneously on multiple nodes of the same network. Unlike traditional banking and payments solutions, a blockchain’s open and decentralized network allows for instant, low-cost transactions where anyone can participate, while securing transactional history by cryptography and social consensus.

Burn

To remove tokens from circulation permanently. See also Mint.

Chain

A short-hand way to reference a blockchain. See also blockchain.

Coin

A short-hand way to reference a cryptocurrency (such as ETH) running on a given blockchain, or a single unit of that cryptocurrency. (See also Token).

Custody

The capacity of a third-party or an individual to retain and safeguard a user’s assets in a wallet address. Custody solutions can be either custodial or self custody, depending on which entity has control over the private keys of the wallet address. (See also Private Keys).

ETH

The native cryptocurrency built into the Ethereum blockchain that is used to pay gas (or network fees) and can be staked to secure the network. (See also Gas.

Ethereum

A public blockchain network with smart contract functionality.

EVM (Ethereum Virtual Machine)

A virtual machine that executes code in a precise manner to create smart contracts on Ethereum. Many other blockchain networks are based on the EVM and are known as EVM-compatible blockchains.

Faucet

A developer tool that issues testnet tokens of no monetary value to be used for testing payment flows and interactions with smart contracts on blockchain test networks.

Gas

A network fee charged in ETH by EVM-compatible blockchains to execute transactions. Non-EVM blockchains such as Solana charge network fees in SOL. End users pay the fee by default, although developers can sponsor the fee to provide a simpler user experience.

Mint

To generate new tokens and put them into circulation (see also Burn).

NFT

A non-fungible token is a unique digital identifier that is recorded on a blockchain, and is used to certify ownership and authenticity. It cannot be copied, substituted, or subdivided.

Onchain

A short-hand way to reference “on the blockchain”. Often used to denote an activity that takes place on a blockchain.

Primitive

A fundamental building block that developers can build on top of on a blockchain network.

Private key

An encrypted password that safeguards a user’s holdings in a wallet address. This can take the form of a data string of letters and numbers 64 characters or longer. A user (or a user’s app) must present a private key to authorize a transaction. Translated to the world of traditional finance, the private key could be compared to a personal signature or PIN code.

Public key

A public-facing address of a user’s wallet that must be shared to receive funds. Every wallet address has both a private key and a public key. Translated to the world of traditional finance, the public key could be compared to an account number or ATM card.

Smart contract

A protocol on a blockchain network that is facilitated, verified, or enforced automatically with no third-party approval or interaction required.

Stablecoin

A cryptocurrency that is pegged to an offchain reserve asset like the US dollar or the euro. Stablecoins are designed to provide a sound store of value and facilitate payments in a familiar currency. Circle issues two stablecoins, USDC and EURC, which reflect 1:1 the value of the US dollar and the euro respectively.

Testnet

A blockchain network used for testing purposes by developers, similar to a staging environment. A testnet will operate just like its corresponding mainnet (similar to a production environment), but the transactions on a testnet use tokens of no monetary value.

Token

A cryptocurrency running on a given blockchain, or a single unit of that cryptocurrency. (See also Coin)

USDC

A US dollar-backed stablecoin issued by Circle on public blockchain networks. USDC is fully reserved and can always be exchanged 1:1 for US dollars.

Wallet

A software or hardware device that is designed to hold and safeguards a user’s wallet address containing their digital assets (e.g. tokens or NFTs).

Wallet address

A data string that identifies a location where digital assets are stored on a public blockchain. Similar to a public key, however a public key serves to facilitate transactions for a wallet address.