GLOSSARY · BLOCKCHAIN · TOKENIZATION · WEB3
The blockchain, tokenization & Web3 glossary.
Lost in the jargon? From AML to ZK Proof: every crypto concept, explained in plain, direct language.
102 TERMS · A–Z INDEX · KEY DEFINITIONS
A
2 TERMSB
6 TERMSBIP (Bitcoin Improvement Proposal)
A BIP is the formal route to change Bitcoin: proposed, debated and activated only by consensus. It dates from 2011 and was modelled on…
Bitcoin
The first decentralized cryptocurrency that revolutionized digital finance.
Blockchain
A technology that allows information to be stored in a secure, decentralized and transparent way using a chain of linked blocks.
Blockchain gaming
Use of blockchain technology for digitally owned games and integrated economies.
Book-entry security
What a book-entry security is: the system whereby a security exists as a simple electronic record in a register, with no physical paper.
Bridge
A bridge moves tokens and data between chains that cannot talk: it locks on one side and mints on the other. It is also one of the most…
C
8 TERMSCard Tokenization
What tokenizing a bank card means: the real number is replaced by a secure token in Apple Pay, Google Pay and online payments — and it has…
CASP (Crypto-Asset Service Provider)
A CASP is a firm authorized under MiCA to provide crypto-asset services across the EU.
CBDC (Central Bank Digital Currency)
What a CBDC is, how it differs from a stablecoin and from a bank deposit, and where the ECB digital euro stands.
CeFi (Centralized Finance)
Finance model based on traditional intermediaries, applied to cryptocurrencies.
Centralized Exchange (CEX)
A CEX holds your funds and matches orders on its own book. What it offers compared with a DEX, and why the EU has required a CASP licence…
CNMV Circular 1/2022 (crypto-asset advertising)
What CNMV Circular 1/2022 was, and why it has been repealed since December 2024: crypto-asset advertising is now governed by MiCA.
Cold Wallet
Device or method for storing cryptocurrency without an internet connection.
Cryptocurrency
Digital currency that uses cryptography to secure transactions and control the creation of new units.
D
11 TERMSDAC8
What DAC8 is: the EU directive requiring crypto-asset platforms to report to the tax authority and to share that data between EU countries.
DAO (Decentralized Autonomous Organization)
Digital entity governed by rules programmed in smart contracts where members collectively make decisions.
Decentralization
Decentralizing spreads validation, governance and data across independent nodes rather than one server. It removes intermediaries and makes…
Decentralized Exchange (DEX)
Platform for exchanging cryptocurrencies without intermediaries or central custody.
DeFi (Decentralized Finance)
Ecosystem of financial applications that operate on blockchain without traditional intermediaries such as banks.
Digital asset custodian
What a digital asset custodian is: the entity that safeguards and protects the cryptographic keys of your tokens and crypto-assets on your…
Digital identity
Unique representation of a person in the blockchain ecosystem, based on verifiable wallets and credentials.
Digital signature
Cryptographic method for verifying the authenticity and integrity of a transaction or message.
DLT (Distributed Ledger Technology)
What DLT or distributed ledger technology is: the shared ledger held across many computers that makes tokenization possible.
DLT Pilot Regime
The DLT Pilot Regime is the European testing framework for trading and settling tokenized securities using DLT.
DLT-MTF, DLT-SS and DLT-TSS
What DLT-MTF, DLT-SS and DLT-TSS are: the three types of market infrastructure authorized by the EU pilot regime to trade and settle…
E
11 TERMSEligible counterparty
What an eligible counterparty is under MiFID II: the category with the lowest protection (banks, investment firms, governments) in order…
EMT (E-Money Token)
An EMT is a crypto-asset regulated by MiCA that keeps its value referenced to a single official currency.
ERC (Ethereum Request for Comments)
An ERC defines the interface a contract must implement so wallets, exchanges and marketplaces can read it: ERC-20, ERC-721 and ERC-1155 all…
ERC-1155
Hybrid standard that allows both fungible and non-fungible tokens to be created in the same contract.
ERC-20
Standard for fungible tokens on Ethereum and other EVM-compatible blockchains.
ERC-3643
Standard for regulated tokens and permissions that meet legal requirements such as KYC and AML.
ERC-721
Standard for non-fungible tokens (NFTs) on Ethereum, used for unique assets such as art, collectibles or digital property.
ERIR (Entity Responsible for the Registration and Recording)
Spain's Law 6/2023 requires an ERIR to register tokenized securities on DLT. See who may act as one, what it answers for and why the CNMV…
Ethereum
Blockchain platform that allows you to create and execute smart contracts and dApps.
EVM (Ethereum Virtual Machine)
Virtual machine that executes smart contracts on the Ethereum blockchain.
Exchange (Cryptocurrency Exchange)
Platform where cryptocurrencies and tokens are bought, sold and traded.
F
3 TERMSFideicomiso (Latin American Trust)
What a fideicomiso is — the Latin American mercantile trust with a separate estate, trustee and beneficiaries — and why it is the standard…
Fork (Bifurcation)
Change or update to a blockchain protocol that creates two possible routes.
Fungible Token
A token that can be exchanged for an identical token, used as a currency or as a representation of assets.
G
2 TERMSH
4 TERMSHash
A cryptographic function that transforms data of any size into a fixed string of characters, unique for each entry.
Hot Wallet
Digital wallet connected to the internet to manage cryptocurrencies quickly and affordably.
Howey Test
What the Howey Test is: the US criterion for deciding whether a token or investment is a security subject to financial regulation.
Hyperliquid
What Hyperliquid is: the decentralized derivatives exchange with an on-chain order book, its own blockchain, the HYPE token and its risks.
I
3 TERMSIberclear (Central Securities Depository)
What Iberclear is: Spain's central securities depository, which records who owns each security and ensures that trades settle correctly.
Immutability
Immutability means a validated block cannot be rewritten: hash chaining plus PoW or PoS consensus enforce it. See how it holds and where it…
Interoperability
The ability of different blockchains to communicate and share data with each other.
K
2 TERMSL
5 TERMSLayer 1
Blockchain base that processes and validates all network transactions.
Layer 2
Solutions that operate on top of a main blockchain to improve scalability and reduce costs.
Layer 3
Layer that adds advanced functionality and user experience to Layer 2 and Layer 1.
Liquidity Pool
A pool locks two tokens in a contract so swaps trade against it instead of an order book. You collect a fee and you take on impermanent…
LMVSI (Law 6/2023 on Securities Markets)
The LMVSI is the Spanish law governing securities markets and recognizing securities represented through DLT.
M
7 TERMSMainnet
The main network of a blockchain where transactions and contracts have real value and permanent consequences.
Merkle Tree
Cryptographic data structure that allows large amounts of data to be verified in an efficient and secure way.
MiCA (Markets in Crypto-Assets Regulation)
MiCA is the European regulation governing the issuance of and services related to crypto-assets across the EU.
MiFID II
MiFID II is the European directive that regulates markets in financial instruments and protects investors.
MiFIR
MiFIR is the European regulation that complements MiFID II with transparency and reporting rules for markets.
Minting
Minting creates the token and records it on-chain through a smart contract: an ERC-20 is born with its supply, an NFT with its tokenId and…
Modelo 721
What Modelo 721 is: the informational return used to report to the Spanish tax authority cryptocurrencies held on platforms abroad.
N
4 TERMSNFT (Non-Fungible Token)
A unique digital token that represents ownership of a specific asset, such as digital art, music, or collectibles.
NFT metadata
Additional information that describes the characteristics of an NFT, such as a name, image, description, or unique attributes.
Node
A node stores the ledger and validates every block. Tell the five types apart, full, light, validator, miner and archive, and what each one…
Nonce
A nonce orders your Ethereum transactions and is the number miners change until a Bitcoin block hash is valid. Explained twice: for dummies…
O
2 TERMSP
5 TERMSProfessional client
What a professional client is under MiFID II: an experienced investor who receives less protection. Per se and on-request routes.
Proof of Stake (PoS)
Consensus mechanism where validators are chosen based on the number of tokens they hold and stake.
Proof of Work (PoW)
A consensus mechanism that requires solving complex calculations to validate transactions and create new blocks on the blockchain.
Prospectus
What a prospectus is: the document detailing the risks and features of a securities offering before they are sold to the public.
Public and private key
A pair of cryptographic keys used to secure and sign blockchain transactions.
Q
1 TERMR
3 TERMSReal Estate Crowdfunding
What real estate crowdfunding is: how licensed platforms work, what you actually buy, the real risks and how it differs from tokenization.
Real World Assets (RWA)
RWAs tokenize rights over property, bonds, art or commodities, not the thing itself: ownership still follows the Civil Code (arts. 609 and…
Remote Procedure Call (RPC)
RPC is the door your wallet or dApp uses to talk to a node: it reads balances and sends transactions. If the endpoint goes down, the app is…
S
14 TERMSSecurity Token
Financial instrument (share, bond or holding) represented on blockchain and subject to securities-market rules.
Self-custody
Full and personal control of private keys and digital assets without intermediaries.
Side Chain
Independent blockchain that connects to the main chain to increase scalability or add functions.
Slashing
Automatic penalty that reduces funds from validators who act poorly on Proof of Stake blockchains.
Smart Contract
Program that automatically runs on a blockchain to fulfill agreements without intermediaries.
Smart contract
Self-executing blockchain programs that automate agreements and processes without intermediaries.
SOCIMI (Spanish REIT)
What a SOCIMI is: Spains listed real estate investment vehicle, its requirements, special tax regime and how it compares to real estate…
Solidity
Main programming language for creating smart contracts in EVM.
Solidity language
Programming language used to create smart contracts on Ethereum and other blockchains compatible with EVM.
Stablecoin
Cryptocurrency designed to maintain a stable value, generally backed by assets or algorithms.
Staking
What staking is in proof-of-stake networks: how rewards are generated, what slashing is, the variants (delegated, pools, liquid staking)…
State Channel
Off-chain private channel that allows multiple quick and cheap transactions before recording the result on the blockchain.
STO (Security Token Offering)
An STO is the issuance of tokens that are transferable securities, subject to securities markets law.
Supply Chain
Use of blockchain to track and ensure the traceability of supply chains
T
5 TERMSTestnet
A testnet mirrors the consensus, gas and blocks of the live network with worthless tokens: it is where contracts, wallets and dApps are…
Token
Digital representation of an asset, value or utility within a blockchain.
Tokenization
The process of representing on blockchain tokens the rights over a real or digital asset. The token mirrors the right; it does not transfer…
Tokenized Deposit
What a tokenized deposit is: commercial bank money represented on a DLT, how it differs from a stablecoin and a CBDC, and what banks use it…
Tokenized transferable security
A tokenized transferable security is a security (share, bond) represented on a blockchain and regulated as a financial instrument.