Glossary of Digital Assets

Digital Assets
Digital assets are intangible assets that involve a property right and are based on blockchain protocols. They include, in particular, protocol tokens (cryptocurrencies), utility tokens, security tokens, non-fungible tokens, etc.

Address
An address is a string of characters used to store, receive, and send digital assets. It is derived from the public key, which is itself derived from the private key. From a technical standpoint, the address is calculated using hash functions, which are irreversible: it is therefore impossible to derive the private key from the address.

Airdrop The term “Airdrop” refers to the distribution of digital assets to the public with the aim of encouraging their use. To be eligible, participants must hold a wallet or digital assets. This initiative differs from an ICO (Initial Coin Offering) in that it is free of charge.

Altcoin (Alternative Coin)
An altcoin refers to a digital asset other than Bitcoin.

Atomic Swaps
An atomic swap refers to a peer-to-peer exchange of digital assets using smart contract technology—computer protocols that automatically execute a program. The term “atomic” refers to a program that either executes in its entirety or does not execute at all.

Bitcoin
Bitcoin is a decentralized computer protocol designed in 2009 by a developer known by the pseudonym Satoshi Nakamoto. Its unit of account is the bitcoin.

Bitcoin ATM (Automated Teller Machine)
ATM stands for Automated Teller Machine. A Bitcoin ATM allows you to exchange cash for bitcoins.

Block
A block records the history of transactions that occurred prior to its creation. Once validated, a block is linked to previous blocks to form a chain (blockchain). For Bitcoin, a block is created approximately every 10 minutes. The genesis block is the first block in a blockchain.

Blockchain
A blockchain is a technology for storing and transmitting information. It is a tamper-proof, transparent, and decentralized database that stores a record of transactions, the validity of which anyone can verify. 

Public Blockchain
A public blockchain is a blockchain that does not require authorization to access it (“permissionless blockchain”). Any user can read the ledger and contribute to the network’s proper functioning, provided they adhere to the consensus rules. A public blockchain is characterized by its resilience and high degree of decentralization.
A public blockchain, such as the Ethereum network, can be open (Ethereum Mainnet) or closed (Ethereum test networks): it is possible to create scenarios where authorization is required, such as controlling access to data.

Private Blockchain A private blockchain is a blockchain deployed in a private environment that requires authorization to access (permissioned blockchain). It enables companies to ensure a certain level of security, privacy, compliance, and performance. Only predefined users have the right to read the ledger and participate in the network’s operation. The Proof-of-Authority protocol is often used, but a private blockchain does not necessarily involve the use of digital assets.

CBDC (Central Bank Digital Currency)
A central bank digital currency is a legal tender (such as the dollar or the euro) in digital form. 

Private key
A private key is a string of random characters. Generally invisible to the user, it is stored in the wallet and is used to sign and validate transactions sent, thereby verifying the identity of the digital asset holder. The public key is derived from the private key; the reverse is not possible.

Public key (address)
The public key is derived from the private key using an asymmetric cryptography algorithm. The user signs their transaction with their private key, and the public key is used to verify that signature. If the public key matches the signature, the transaction is validated and added to the blockchain.

Cold storage
A method of storing digital assets offline to keep them secure (hardware wallet in the form of a USB drive, paper wallet). Cold storage specifically refers to hardware wallets.

Consensus
Consensus is a process by which users of a peer-to-peer network agree on a set of information. It is the governance mechanism inherent in the decentralized blockchain system. Any modification to the protocol’s source code requires majority approval. 
The best-known of these, which forms the basis of Bitcoin, is the Proof-of-Work consensus algorithm. This is based on a simple principle: each block is added to the blockchain through an energy expenditure (proof of work), and the longest blockchain (the one with the most proof of work) is the chain considered valid by the network.

Protocol tokens
A protocol token (commonly referred to as “cryptocurrency”) is an asset based on the principles of cryptography and traded on a decentralized peer-to-peer network using blockchain technology. Protocol tokens are often likened to currencies, but unlike fiat currencies, these tokens are not legal tender and are not universally accepted as a means of payment in France. Protocol tokens are one of the categories comprising digital assets.  

Custodial wallet
A custodial wallet involves entrusting your digital assets to a third party. The benefit is that it mitigates the risks associated with theft or loss of private keys, whether they are stored in an offline wallet (cold storage) or in a wallet connected to the Internet (hot storage). Custodians differ from banks in that they cannot use the assets for their own purposes. 

Cypherpunk
Cypherpunks are a movement of individuals that emerged in the late 1980s, advocating for online privacy through the use of cryptographic tools and the writing of computer code. The movement’s founders are Eric Hughes, Timothy C. May, and John Gilmore. The core principles of cypherpunk philosophy were outlined inA Crypto-Anarchist Manifesto(1988),A Cypherpunk Manifesto(1993), andCyphernomicon(1994).
Aware of the risks posed by new forms of surveillance and censorship in the Internet age, cypherpunks have developed a philosophy centered on the importance of preserving one’s anonymity and freeing oneself from any trusted third party, whether public or private. 

DAO (Decentralized Autonomous Organization)
A decentralized autonomous organization is a governance system based on blockchain technology. It enables projects to be organized without a centralized governing body, in a transparent and secure manner, through the use of smart contracts—programs that execute predefined conditions. 

DeFi (Decentralized Finance)
Decentralized finance is an application of blockchain technology. The goal is to provide greater access to financial services without intermediaries, such as banking institutions. Ethereum is one of the cryptocurrencies involved in decentralized finance through its DAI token.

DEX (Decentralized Exchange)
Decentralized exchanges allow users to trade digital assets peer-to-peer using blockchain technology, and primarily operate "on-chain" via smart contracts. 
Reaching consensus and executing transaction orders can be slower compared to “off-chain” platforms (transactions that do not occur directly on the blockchain, but instead pass through a higher layer of the protocol—such as the Lightning Network on Bitcoin—or through a database management system like MySQL).

Difficulty
Difficulty is a mechanism that comes into play during the block mining process. It varies depending on each cryptocurrency that uses the Proof-of-Work consensus protocol. The goal is to maintain a constant rate of block production by adjusting the difficulty level as needed. 
In the case of Bitcoin, the network automatically adjusts the difficulty using Proof-of-Work: the higher the difficulty, the more computing power is required to solve the proof-of-work. This difficulty is recalculated every 2,016 blocks, or every two weeks (a block is created every 10 minutes).

Crypto-to-cryptoexchanges
Crypto-to-crypto exchanges refer to peer-to-peer transfers of digital assets in exchange for other digital assets.

Crypto-fiat exchanges
Crypto-fiat exchanges refer to peer-to-peer transfers of digital assets in exchange for fiat currency.

Ethereum
Ethereum is a blockchain network that goes beyond mere monetary transactions and is part of a broader initiative aimed at creating a fully decentralized web (without trusted third parties or fees). It operates using ether. Smart contracts were popularized by the Ethereum blockchain.

Exit scam
An exit scam is a common scam on the Dark Web, particularly in the context of ICOs (Initial Coin Offerings). Scammers collect funds from investors in exchange for the promise of a product, then disappear without ever delivering it.

Faucet
Faucets are websites that distribute digital assets for free—often in very small amounts—with the aim of making them more accessible to everyone.

Fees
See TransactionFees

Fork
A fork refers to a split of the blockchain into two separate chains. It can be accidental (when the same block is validated by two different validators) or intentional (a change to the protocol governing the blockchain).
A hard fork is a protocol change that is incompatible with the previous version, resulting in a split between two blockchains. A soft fork is a protocol change that is compatible with the previous version, and nodes that have not been updated are still able to process new blocks in the blockchain.

Hash Function A hash function is a sequence of mathematical and cryptographic operations that produces an output, known as a hash or signature. It is part of the context of mining and hash rate.

Transaction Fees These are the fees charged for executing a transaction on a public blockchain. These fees cover infrastructure costs. They are usually distributed to miners but can sometimes be partially or fully “burned” (i.e., destroyed).

Gas
Every contract executed on blockchain protocols consumes a certain number of computational units depending on its complexity. Gas is the unit of account used to measure the complexity of a transaction on the Ethereum blockchain. The amount of gas depends on the computational resources required to perform an operation. Gas therefore allows for the allocation of resources on the Ethereum Virtual Machine (EVM). Each transaction is assigned a gas cost. To have a transaction executed on the blockchain, a user must agree to pay the gas fee. Fees are paid in Ether (ETH), which is paid to the miner responsible for validating the transaction; the conversion rate between ETH and gas is dynamically determined by an open market. Since each miner is free to choose which transaction(s) to include in the next block, they will typically seek to increase their revenue by selecting transactions with a high gas price in ETH.

Hardware wallet
A hardware wallet is a physical device used to store a private key. It typically consists of an electronic component whose sole purpose is to secure the key (a Secure Element).

Hash
In cryptography, a hash, or "fingerprint," is the result of encrypting a message. 

Hot storage
A method of storing digital assets on any device connected to the Internet (mobile phone, computer).

ICO (Initial Coin Offering)
An ICO is a fundraising campaign using cryptocurrencies that takes place as part of the launch of a blockchain project. Investors can purchase tokens—issued and sold in large quantities—to participate in the project and speculate.

Know Your Transaction (KYT)
An acronym for the English phrase “Know Your Transaction.” KYT tools enable the real-time analysis of blockchain transactions and assign a suspicion score. They are designed to combat money laundering and terrorist financing.

Layer-one
Layer-one (Layer 1) is the term used to describe the core architecture of ablockchain.

Layer-two
Layer-two (Layer 2) is a network built on top of an underlying blockchain. The main goal of these protocols is to address the speed and scalability issues faced by major blockchain networks and to improve their scalability. For example, theBitcoinnetwork is the Layer 1 protocol, while the Lightning Network is the Layer 2 protocol.

MasterNode
A masternode (“central node” or “main node”) is a server that holds a complete copy of the blockchain and is responsible for providing functionality to the protocol. They are a special category of nodes that are more important than standard nodes (which only hold a partial copy of the blockchain).
Masternodes serve multiple purposes: they can relay transactions across the network to lower-tier nodes, speed up transaction validation, grant voting rights to certain nodes, and more.

Maximalist
A "maximalist" or "Bitcoin maximalist" is a Bitcoin enthusiast who views it as the only viable digital asset—or at least as the one that will be widely used in the future. The term can also refer to an investor who puts all their eggs in the BTC basket, without diversifying their portfolio.

CBDC (Central Bank Digital Currency) 
See CBDC

Mining
Mining is a process that involves solving complex mathematical problems. It is a computational challenge required by the consensus mechanism that validates transactions and secures the network. Each mined transaction entitles the miner to a reward in the form of newly issued bitcoins or altcoins.

Miner
In the Proof-of-Work mechanism, a miner is someone who invests in one or more computers and spends significant amounts on electricity to mine crypto-assets. Their job is to follow the transaction validation protocol and meet the required difficulty level. Each miner is compensated in proportion to the computing power they contribute to the network. 

NFT (Non-fungible tokens)
A non-fungible token is a digital token stored on a blockchain that possesses unique characteristics. It is inherently unique and cannot be replaced. In 2012, Bitcoin saw the emergence of the first non-fungible tokens with Colored Coins. They are among the best known, along with Cryptokitties on the Ethereum blockchain.

Node A node is a computer that stores a copy of every transaction that has taken place since a digital asset was created, and forwards user requests to miners or validators. The number of nodes is a key factor in the quality of a decentralized network.

Non-custodial wallet
A non-custodial wallet means you are solely responsible for your digital assets and private keys. Unlike a custodial wallet, the owner is the sole holder of the funds. This can take the form of a web extension like Metamask or a cold wallet. The goal is to maximize the security of the digital asset environment: a hacker would have to attack the devices themselves directly, rather than a platform. 

Oracle
An oracle is essentially a data source that acts as an intermediary between smart contracts and other external sources. Its role is to provide vital and reliable information by translating real-world events (non-deterministic data) into numerical values that can be recognized by smart contracts (deterministic data).

Peer-to-peer
A peer-to-peer network is a network in which each computer can act as a central node or server (storing and processing data, communicating information, and issuing requests), and in which data is transferred directly between two network nodes. 
This architecture offers security advantages because all data is distributed across the network nodes, making it difficult to gain control of it.

Mnemonic phrase
A mnemonic phrase, or "recovery phrase," is a sequence of 12 or 24 words used to prove ownership of your keys and addresses and to recover your funds in the event of loss or theft. This is the only piece of information that users must not lose and must keep in a safe place.

Proof-of-Authority
Proof-of-Authority is a consensus protocol that grants a limited number of pre-designated participants the power to validate transactions and update the more or less distributed ledger. Unlike Proof-of-Stake and Proof-of-Work protocols, Proof-of-Authority is characterized by a high degree of centralization in the hands of a small number of participants. It is primarily favored in the context of private blockchains by players in the banking sector.

Proof-of-Stake
Proof-of-Stake is a consensus protocol for validating transactions on a blockchain. Unlike the Proof-of-Work mechanism, Proof-of-Stake does not require miners to use their computing power to solve mathematical problems, but rather to prove ownership of a certain amount of crypto-assets in order to earn the right to validate additional blocks. The Ethereum blockchain is transitioning to Proof-of-Stake. 

Proof-of-Work
Proof-of-Work, or "proof of computation," is one of the two major consensus protocols used to validate transactions on blockchains, and it is also the oldest, as Bitcoin is based on this protocol. It relies on mining and involves a miner solving a complex mathematical problem to validate transactions and add new blocks to the blockchain. The miner who finds the solution is rewarded with newly minted crypto-assets.

Satoshi
A Satoshi is the smallest unit of Bitcoin, equal to one hundred-millionth of a bitcoin (1 Satoshi = 0.00000001 BTC), and is named after Satoshi Nakamoto, the pseudonym of the person or group of people who created it between 2009 and 2010. 

Scalability Scalability refers to a blockchain’s ability to adapt to a growing number of users and transactions without compromising decentralization and security. It is currently the biggest challenge facing blockchains as they strive to achieve widespread adoption.

Scam
A scam is an online fraud. The most common example involves raising funds through cryptocurrencies for an ICO project, where the organizers disappear with the investors' money.

Security tokens
Security tokens are a type of token that allows investors (both professional and individual) to invest funds, finance, or speculate on a blockchain project. Their value depends on the work carried out by the issuers. Very often, they have no utility until the objectives are met, and they confer no rights regarding the decisions of the issuing entity.

Security Token Offering (STO)
An STO is a process similar to an ICO, in which an investor exchanges money for tokens. However, an STO is unique in that it distributes tokens that are classified as securities, similar to financial instruments. 

Sharding
Sharding involves dividing a blockchain to improve the network’s scalability. It is a layer-one solution in that it is implemented at the level of the main blockchain. A common practice in centralized databases, the goal is to limit the risk of corruption by certain nodes that might attempt to take control of the network.

Sidechain
A sidechain is a secondary blockchain (layer-two) that operates in parallel with a main blockchain (layer-one) but is linked to it in order to increase the volume of data that would otherwise be limited. The goal is to improve the network’s scalability.

Smart contract 

A smart contract is a computer program that automatically executes predefined conditions using conditional "if–then" statements (if a certain condition is met, then a certain action is executed). These smart contracts rely on the Ethereum network’s blockchain technology to ensure that the terms and conditions of their execution are tamper-proof.

Stablecoin
A stablecoin is a type of crypto-asset designed to maintain a stable value in the market. Although the mechanisms vary depending on the specific stablecoin, these crypto-assets are intended to withstand market volatility and should therefore not experience significant price fluctuations. They may be backed by fiat currency: this is the case with Tether (USDT) and MakerDAO’s DAI.

Staking
Staking refers to the process of holding and locking up crypto-assets in order to contribute to the operations of a blockchain. Closely linked to the Proof-of-Stake mechanism, staking involves locking a specific amount of crypto-assets in a wallet and staking them to validate transactions. Validators are selected based on the number of crypto-assets they commit to staking. 

Hash rate
The hash rate refers to the speed at which a miner or validator generates a hash—that is, the number of times a hash function is calculated per second—before creating and adding a new block. The difficulty adjusts in response to increases or decreases in the hash rate to maintain a constant block time (close to 10 minutes) and to ensure high levels of data integrity and security.

Token
A token is a digital asset that exists on a protocol’s blockchain. For example, bitcoins are the tokens of the Bitcoin network, and ethers are the tokens of the Ethereum network. Tokens are at the heart of ICOs.

Tor
Tor is a computer network consisting of multiple servers located around the world, designed to anonymize the source and destination of traffic through an encryption protocol. It is primarily used as a tool to circumvent internet censorship by whistleblowers, journalists, lawyers, political dissidents, and NGO representatives.

Wallet
A wallet is a place where you can store your private key and keep your digital assets. There are online wallets on platforms connected to the Internet, as well as physical wallets that do not rely on any intermediaries (hardware wallets).

Wei
Wei refers to the smallest unit of value of Ether (ETH), the currency used on the Ethereum network. 

White paper
A white paper is a guide that introduces a crypto-asset, explaining how it works (technical fundamentals, consensus mechanism) and providing insight into its viability before investing. It is the best possible source of information for learning about a crypto-asset project