Infrastructure & Chains — Crypto Glossary
Crypto infrastructure terms describe the lower layers almost everything else depends on: how blocks are produced, who runs the nodes that validate them, how layer-2s compress activity off the base chain, and how external data (prices, weather, sports scores) gets pulled onchain via oracles. If a protocol fails, it's usually something at this layer.
Blockchain A blockchain is an append-only database maintained by a distributed network of computers (nodes) that agree on its contents via a consensus mechanism. Consensus Mechanism A consensus mechanism is the protocol a blockchain uses to agree on the order and validity of transactions across its distributed validator set. Finality Finality is the guarantee that a transaction, once included in a block, cannot be reversed. Gas Fee A gas fee is the payment a user makes to have a transaction included in a blockchain block. Layer 2 A layer 2 (L2) is a blockchain that settles on a base-layer blockchain (L1) rather than maintaining its own independent security set. Node A node is a computer running blockchain software that maintains a copy of the chain's state and relays transactions across the network. Optimistic Rollup An optimistic rollup posts transaction batches to L1 assuming they're valid, with a challenge window (typically 7 days) during which anyone can submit a frau… Oracle An oracle is a service that brings off-chain data (prices, weather, election results, API responses) onto a blockchain so smart contracts can act on it. Proof of Stake Proof of stake (PoS) is a consensus mechanism where validators lock tokens as collateral and are pseudo-randomly selected to propose and attest to new blocks. Proof of Work Proof of work (PoW) is a consensus mechanism where miners compete to solve a computational puzzle — finding a hash that meets a difficulty target — and the w… Rollup A rollup is a specific type of layer-2 blockchain that executes transactions off-chain but posts transaction data to an L1 for data availability and security. Sharding Sharding is the partitioning of a blockchain's state and execution across multiple parallel shards to scale throughput. Smart Contract A smart contract is code deployed to a blockchain that runs when invoked and whose execution is guaranteed by the network's consensus. Validator A validator is a participant in a proof-of-stake blockchain who locks tokens as collateral and is then eligible to propose or attest to new blocks. ZK Rollup A ZK rollup (zero-knowledge rollup) is a layer-2 chain that posts a cryptographic proof of correct execution to L1 with each batch of transactions.