A blockchain records activity under network rules; a wallet manages the keys used to interact with it. Those two ideas explain many other crypto terms, including addresses, fees, coins, tokens, mining and staking. This glossary defines the basics and flags where a term is specific to Bitcoin, Ethereum, another network or a legal context.
What does a blockchain record?
A blockchain is a ledger whose records are grouped into blocks and linked according to a network’s rules. Participants use a consensus process to agree on accepted records, while protocol rules determine which records are valid. The exact visibility and governance model varies by blockchain.
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Block
A block is a batch of records added to a chain after validation. In Bitcoin, blocks record and confirm transactions that are waiting to be processed, according to Bitcoin.org.
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Consensus is the process a network uses to agree on its accepted records or chain. It is distinct from the rules that define whether a transaction or block is valid. Ethereum’s consensus documentation describes the mechanism in Ethereum’s specific context; other networks may work differently.
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Transaction
A transaction is a signed request or record that transfers value or changes a network’s state. Its fields and processing depend on the blockchain. Ethereum.org, for example, defines an Ethereum transaction as data committed to the Ethereum blockchain and signed by an originating account.
What is a crypto wallet?
A wallet is software, hardware or a service for managing keys and interacting with a blockchain. Saying a wallet “holds crypto” is convenient shorthand: on-chain assets are recorded by the network, while the wallet manages the credentials used to control or access them. Bitcoin.org describes a Bitcoin wallet as containing private keys; Ethereum.org describes wallets as apps for sending and receiving ETH and managing assets.
Custodial and self-custodial wallets
In a self-custodial arrangement, you control the private keys. With a custodial service, a provider controls them on your behalf. The distinction matters because whoever controls the keys can generally authorize actions associated with them. A hardware wallet is one possible way to store private keys, not a requirement or a guarantee of safety.
What are a public address, public key and private key?
Address
An address is an identifier or destination you can share to receive assets. Bitcoin.org compares a Bitcoin address to a physical or email address and recommends ideally using a Bitcoin address only once for privacy. That guidance is specific to Bitcoin; address and privacy practices differ across networks.
Public key
A public key is a cryptographic value used in relation to signatures and addresses. It is not necessarily the same thing as an address: on Ethereum, an address is based on a public key, but implementations differ.
Private key
A private key is secret data used to sign or authorize actions, or otherwise prove control of assets. Keep it private: do not share it or enter it into a site you do not trust. Keys may be stored on a computer or dedicated device, or backed up through a recovery phrase; a storage method does not by itself ensure security.
Recovery phrase or mnemonic
A recovery phrase is a sequence of words used by some wallet systems to derive or restore keys. Ethereum.org describes a mnemonic as a seed for key generation. Anyone who obtains the phrase may be able to access the associated assets, so do not share it or enter it into an untrusted site.
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In common usage, a coin is the native asset of its own blockchain, while a token is issued on an existing blockchain. The distinction is a convention, not a universal standard: some documents use “token” broadly for digital assets. Identify the network and context when the distinction matters.
What are crypto transaction fees and Ethereum gas?
Transaction fee
A transaction fee is paid for a network to process a transaction. Fees are not necessarily fixed: Bitcoin.org says Bitcoin fees vary and that a higher fee tends to help a transaction confirm sooner, particularly when the network is busy. Ethereum.org also explains that fees respond to network demand. Neither statement guarantees a particular confirmation time or fee.
Gas
On Ethereum, gas is the unit associated with the computational work required to process transactions and run smart contracts. The transaction fee depends on the gas required and fee-market conditions. “Gas” is Ethereum terminology; do not assume every blockchain calculates fees the same way.
How do proof of work and proof of stake differ?
Mining and proof of work
Bitcoin uses mining, in which computation is used to produce blocks and support the network’s security. Mining is not a universal crypto process. Ethereum.org’s proof-of-work documentation notes that proof of work is no longer Ethereum’s consensus mechanism and that Ethereum mining has been switched off.
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Staking, proof of stake and validators
In proof-of-stake systems, participants stake assets and validators carry out protocol duties such as checking transactions or proposing blocks. Requirements and penalties vary by chain. Ethereum’s staking and validator descriptions refer to Ethereum, not every proof-of-stake network.
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What are Layer 1 and Layer 2?
Layer 1 is the base blockchain in a multi-layer setup. A Layer 2 is a network or scaling system built on top of a base chain. Ethereum.org describes Layer 2 systems as offloading some transactions while relying on the main network in specified ways. The details—and the security model—are not identical for every Layer 2.
What is a stablecoin?
A stablecoin is a crypto asset designed to track a reference asset, often a fiat currency. The label describes an intended relationship, not a guarantee that its market price will remain stable. It also does not establish the quality of reserves, redemption rights or legal classification.
Legal treatment depends on features and jurisdiction. In a U.S. educational page last reviewed or updated May 15, 2026, the SEC says payment stablecoins under the GENIUS Act are generally not securities subject to that Act’s terms, while other stablecoins may be securities depending on their features. This is a U.S.-specific, changeable legal statement, not a universal classification.
What is a smart contract?
A smart contract is code deployed on a blockchain that performs predefined actions. The term does not necessarily mean the code is a legal contract: an SEC-filed glossary makes that distinction. Whether a separate legal agreement exists depends on the circumstances and applicable law.
Optional Bitcoin term: What is a UTXO?
UTXO means “unspent transaction output.” In Bitcoin, a wallet manages outputs that can be spent later rather than a single account balance in the same sense as a conventional bank account. This is a Bitcoin-specific way to understand how transaction value is tracked.
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