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A blockchain records activity under network rules; a wallet manages the keys used to interact with it; and terms such as “coin,” “token,” and “stablecoin” depend on context. This glossary explains the essentials, with Bitcoin- and Ethereum-specific details labeled where they matter.
How blockchain records work
Blockchain
A blockchain is a ledger whose records are grouped into blocks and maintained according to a network’s rules. Bitcoin.org describes Bitcoin’s blockchain as a public, chronological record of transactions. That description is Bitcoin-specific: blockchains do not all have identical visibility or governance. Bitcoin.org’s explanation of how Bitcoin works.
Block
A block is a batch of records—such as transactions—that is validated and added to a chain. In Bitcoin, blocks record and confirm transactions waiting to be processed. The exact contents and validation process vary by network.
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Consensus is the process by which network participants agree on accepted records or a chain under protocol rules. It is distinct from the rules that determine whether a transaction is valid: participants can agree on a chain while still applying rules that reject invalid activity. Ethereum.org describes consensus in the context of Ethereum’s protocol. Ethereum’s consensus mechanisms.
Transaction
A transaction is a signed request or record that changes a blockchain’s state, such as by transferring value. Ethereum defines a transaction as data committed to its blockchain and signed by an originating account. Other networks may use different transaction formats and processing rules. Ethereum transactions.
What crypto wallets and keys do
Wallet
A crypto wallet is software, hardware, or a service that manages keys and provides a way to interact with a blockchain. Saying that a wallet “holds crypto” is convenient shorthand, but on-chain assets are recorded by the network; the wallet manages the credentials used to control or access them. Whether you control the keys yourself depends on the wallet and its custody model. Bitcoin.org describes a Bitcoin wallet as containing private keys, while Ethereum.org describes wallets as apps for sending and receiving ETH and managing assets. Bitcoin.org’s wallet guide; Ethereum wallets.
Address and public key
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 advice is Bitcoin-specific, not a universal rule for all networks. 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 derived from a public key. Bitcoin.org’s practical Bitcoin guidance; Ethereum accounts.
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A private key is secret data used to sign transactions or otherwise prove control of assets. Keep it private: anyone who obtains the relevant key may be able to authorize actions. Some wallet systems use a recovery phrase, also called a mnemonic, to derive or restore keys. Ethereum documentation describes a mnemonic as a seed for key generation. Never share a private key or recovery phrase, and do not enter a recovery phrase into an untrusted site. A computer, dedicated hardware device, or backup phrase can be a storage method; none is a guarantee of safety. Bitcoin.org on securing a wallet; Ethereum account and key concepts.
Coins, tokens, and stablecoins
Coin and token
In common usage, a coin is the native asset of its own blockchain, while a token is an asset issued on an existing blockchain. The distinction is a convention, not a universal standard: some documents use “token” broadly. Check how a particular network, project, or legal document uses the words rather than assuming every source follows the same terminology. An SEC-filed glossary illustrating broader usage.
Stablecoin
A stablecoin is a crypto asset designed to track a reference asset, often a fiat currency. The label alone does not guarantee a stable market price, reserve quality, redemption rights, or a particular legal classification.
In the United States, an SEC educational page updated May 15, 2026, says payment stablecoins under the GENIUS Act are generally not securities subject to the Act’s terms, while other stablecoins may be securities depending on their features. This is a U.S.-specific, feature-dependent legal statement, not a worldwide classification or a guarantee about any individual asset. SEC educational material on crypto assets.
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Fees, gas, and network activity
Transaction fee
A transaction fee is a cost associated with having a transaction processed by a network. Fees are not necessarily fixed: Bitcoin.org says Bitcoin fees vary and that higher fees tend to be confirmed faster, especially when the network is busy. This is not a promise of a particular confirmation time. Ethereum fees also respond to network demand. Bitcoin.org on fees and confirmations; Ethereum gas and fees.
Gas
On Ethereum, gas is the unit used to account for the computational work required by transactions and smart contracts. The fee paid depends on the gas required and fee-market conditions, so “gas” is not a single fixed fee and does not describe every blockchain’s fee system. Ethereum’s gas documentation.
How networks reach agreement
Mining and proof of work
Proof of work is a consensus approach in which miners use computation to produce blocks and support network security. Bitcoin uses mining in this way. The term “crypto mining” should not be taken to mean every cryptocurrency uses proof of work: Ethereum switched off mining and no longer uses proof of work as its consensus mechanism. Bitcoin.org on mining and block creation; Ethereum’s proof-of-work documentation.
Proof of stake, staking, and validators
In proof-of-stake systems, participants stake assets and validators perform protocol duties such as checking transactions or proposing blocks. The requirements and any penalties depend on the network. Ethereum uses proof of stake; its validator role is specific to Ethereum’s design, and should not be assumed to work identically elsewhere. Ethereum staking; Ethereum proof of stake.
Smart contracts and network layers
Smart contract
A smart contract is code deployed on a blockchain that performs predefined actions when its conditions are met. The phrase does not by itself mean there is a legally enforceable contract: an SEC-filed glossary cautions that code alone is not a legal contract. Legal effect depends on the circumstances and applicable law. SEC-filed glossary.
Layer 1 and Layer 2
Layer 1 is a base blockchain in a multi-layer arrangement. A Layer 2 is a network or scaling system built on top of a base chain. Ethereum describes Layer 2 systems as handling some transactions while relying on the main network in specified ways. Their security models and how they rely on the base chain differ, so “Layer 2” does not mean every system offers the same protections. Ethereum.org’s Layer 2 overview.
An optional Bitcoin term: UTXO
UTXO means “unspent transaction output.” In Bitcoin, wallets track outputs that can be spent later; this differs from thinking of a balance as one simple account figure, as in a conventional bank account. The term describes a Bitcoin transaction model and should not be applied to every network. Bitcoin.org’s developer guide to transactions.
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