A hashed time-locked contract: a conditional payment combining a secret-hash requirement with a timeout.
An HTLC links payment to revealing the required secret before a deadline, with a timeout route if that does not happen. This supports routed Lightning payments and some atomic exchanges. The relationship between secrets and deadlines is part of the mechanism, rather than simply promising that any transfer will complete.
IN THE WILD
The Lightning recipient reveals the required preimage, allowing the hash-conditioned routed payment to complete before its timeout.
InterPlanetary File System: a protocol suite for addressing and sharing content through content-derived identifiers.
An IPFS identifier refers to particular content rather than only a location on one server. Retrieved content can be checked against that identifier. Availability still requires peers to retain and serve it, so a working identifier and lasting storage are separate concerns when an NFT or app relies on IPFS.
IN THE WILD
Your NFT viewer asks peers for the content identified by its IPFS reference; a peer retaining that content serves it.
A JSON-based request and response format commonly used by applications to communicate with blockchainnodes.
An RPC endpoint is how many wallets and apps ask a node for balances, contract data or transaction submission. JSON-RPC provides the message format for those requests. A response is information from that provider, so reliability and freshness matter. Reading data or simulating a call is different from signing an action that can move assets.
IN THE WILD
Your wallet asks an Ethereum RPC endpoint for your account balance, then sends a signed transaction through it when you approve a transfer.
A Keccak hash function with a 256-bit output, used extensively in Ethereum.
Ethereum uses Keccak-256 for many identifiers and commitments. It is related to SHA-3, but Ethereum's variant and standardized SHA3-256 use different padding conventions and produce different digests. This matters when a developer reproduces a function selector or checks data against an Ethereum-generated value.
IN THE WILD
"My function selector doesn't match." The tool used SHA3-256, while the Ethereum contract expects its Keccak-256 variant.
An algorithm that derives cryptographic key material from input secrets and contextual data.
A KDF turns inputs such as a secret, password or salt into key material for a particular purpose. Password-based designs can make each guessing attempt more expensive. They still start with the supplied secret, so a weak password or exposed input is not magically fixed by deriving a key from it.
IN THE WILD
Your wallet processes the password and salt through a password-based KDF before using the resulting key to encrypt its local file.
A blockchain's base network, responsible for its own consensus and canonical state.
Layer 1 is the base chain that other systems may use for settlement or security. Ethereum is one example beneath many rollups. Separate L1s have separate consensus and asset histories, so the label identifies their role in a stack rather than making their security models or balances interchangeable.
A system that processes activity outside a base blockchain while relying on it for key security or settlement functions.
An L2 moves some work away from the base chain, but its connection to that chain is central to the design. Rollups are a common example. The details still matter: sequencing, upgrades, data availability and withdrawals can introduce dependencies beyond simply seeing Ethereum listed as the settlement layer.
IN THE WILD
You submit a transaction on the rollup; its batch later posts a commitment to the Ethereum base chain.
Exposure to a position larger than the capital directly supporting it.
Leverage can come from borrowing or a derivative contract supported by margin. A price move then affects a larger exposure than the collateral alone would suggest. This amplifies losses as well as gains, and the venue's margin rules can force liquidation before the trader chooses to close the position.
IN THE WILD
"My position has five times my collateral's exposure. A small price move matters more to that collateral than I first pictured."
A client that checks selected blockchain information using compact proofs and protocol-specific assumptions.
A light client trades some independence for lower data and storage needs. It can verify particular claims, such as transaction inclusion, without processing everything a full node does. The important question is what it actually checks and how it obtains trustworthy headers; those assumptions vary between protocols.
A Bitcoin payment network that uses channels so every payment does not need its own onchain record.
Lightning payments move through channels backed by enforceable Bitcointransactions. That can make small payments practical, but the route needs enough available liquidity in the right direction. Channel setup and settlement still involve the blockchain. A Lightning payment failing doesn't necessarily mean Bitcoin itself is down; the route may be the problem.
IN THE WILD
'The Lightning payment didn't go through.' The wallet tries another route because the first one lacks enough channel liquidity.
The daily pick rotates automatically. Our initial collection was published on October 9, 2026. New words join on their publication date. Every concept includes a reference.