COVER ยท REFERENCE
Basics
The terms you need - and only those
ELEVEN TERMS
In the order in which they build on each other
| Blockchain | A shared ledger that many computers keep at the same time and that cannot be changed afterwards. |
|---|---|
| Wallet | Not a purse but a key. Whoever has it may move whatever sits at the corresponding address. |
| Transaction | An instruction to the blockchain. Once confirmed there is no reversal. |
| Signature | Proof that an instruction comes from the holder of the key. Four different things are often confused here. |
| Smart contract | A program that sits on the blockchain and moves money by fixed rules. The starting point of most cover products. |
| Protocol | Several smart contracts that together make an application - lending, swapping, saving. |
| DeFi | Financial business that runs directly between program and user, without a bank. |
| Stablecoin | A token meant to hold a fixed value. What carries that value is the decisive question. |
| Onchain | What is in the blockchain and verifiable by anyone - as distinct from everything that happens beside it. |
| Oracle | The place that tells a program what is going on outside. The price, for instance. |
| Hack and exploit | The difference between “somebody broke in” and “somebody followed the rules exactly”. |