Technical & Protocol

1. A property of a distributed computing system that enables it to continue operating correctly even when some nodes fail or act maliciously — sending conflicting or incorrect information to different parts of the network. Named after the Byzantine Generals Problem, a thought experiment formalized by Lamport, Shostak, and Pease in their 1982 paper.

2. A system is Byzantine Fault Tolerant if it can reach consensus despite up to ⌊(n−1)/3⌋ faulty or malicious nodes, where n is the total number of nodes. Bitcoin's proof-of-work achieves a probabilistic form of BFT; classical BFT protocols (PBFT, Tendermint, HotStuff) achieve deterministic finality.

See also: Consensus Mechanism · Proof of Stake · Validator

1. A graph data structure in which edges have a defined direction and no cycles exist — meaning it is impossible to traverse the graph and return to the starting node. In distributed ledger technology, DAGs are used as an alternative to linear blockchain architecture, allowing transactions to reference multiple prior transactions rather than a single previous block.

2. DAG-based ledgers theoretically offer higher throughput and lower fees than traditional blockchains by enabling parallel transaction processing. Notable implementations include IOTA's Tangle, Hedera Hashgraph, Nano, and Avalanche's consensus (which uses a DAG for its primary network).

See also: Distributed Ledger Technology · Blockchain · Layer 2

1. The decentralized computation engine that executes smart contracts on the Ethereum network. The EVM is a quasi-Turing-complete, stack-based virtual machine that processes bytecode compiled from high-level languages such as Solidity and Vyper. Every Ethereum full node runs an identical instance of the EVM, ensuring deterministic execution across the network.

2. The EVM has become the dominant smart contract execution standard, with EVM compatibility adopted by dozens of alternative networks including Polygon, BNB Chain, Avalanche C-Chain, Arbitrum, Optimism, and Base — creating a vast ecosystem of interoperable tooling, developer libraries, and deployed contracts.

See also: Smart Contract · Gas & Gas Fees · Layer 2 · Ethereum Launch

1. A secondary protocol or network built on top of an existing Layer 1 blockchain (the "base layer") that processes transactions off-chain and periodically settles state to the Layer 1 for final security. Layer 2 solutions are designed to increase transaction throughput and reduce fees while inheriting the security guarantees of the underlying Layer 1.

2. The primary L2 architectures are: Optimistic Rollups (Arbitrum, Optimism, Base) — assume transactions are valid by default with a fraud-proof challenge window; ZK-Rollups (zkSync, StarkNet, Polygon zkEVM) — use zero-knowledge proofs to cryptographically verify batch validity; State Channels (Lightning Network) — bilateral off-chain payment channels; Plasma — child chains with periodic checkpoints.

See also: Zero-Knowledge Proof · Blockchain · Blockchain Trilemma

1. A binary tree data structure in which every leaf node contains the cryptographic hash of a data block, and every non-leaf node contains the hash of its two child nodes. The single hash at the top — the Merkle root — cryptographically summarizes all data in the tree. Any modification to any leaf node produces a completely different Merkle root, providing tamper-evidence for the entire dataset.

2. In Bitcoin, the Merkle root of all transactions in a block is included in the block header. This enables Simplified Payment Verification (SPV) — light nodes can verify that a specific transaction is included in a block by requesting only the relevant branch of the Merkle tree (a "Merkle proof"), without downloading the entire block.

See also: Hash Function · Blockchain · SPV Verification

1. A consensus mechanism in which validators are selected to propose and attest to new blocks in proportion to the amount of cryptocurrency they have staked as collateral. Validators who act dishonestly risk having their staked funds slashed (partially or fully destroyed) — aligning economic incentives with honest behavior without requiring energy-intensive computation.

2. Ethereum transitioned from Proof of Work to Proof of Stake in The Merge (September 15, 2022), reducing the network's energy consumption by approximately 99.95%. Ethereum's PoS requires validators to stake a minimum of 32 ETH to operate a validator node, with slashing conditions for double-signing or prolonged inactivity.

See also: Proof of Work · Validator · The Merge · Staking

1. A self-executing program stored on a blockchain whose terms are directly written in code. Smart contracts automatically enforce and execute predefined conditions when triggered by transactions, without requiring intermediaries. Once deployed, the code is immutable and executes deterministically across all nodes in the network.

2. The term was coined by cryptographer and legal scholar Nick Szabo in 1994 — predating Bitcoin by 15 years. Szabo's canonical example was a vending machine: a mechanical device that automatically executes a contract (dispense item) upon receiving the correct input (payment), without requiring a trusted third party.

See also: Ethereum Virtual Machine · The DAO Hack · Smart Contract Law

1. A cryptographic method by which one party (the prover) can prove to another party (the verifier) that a statement is true without revealing any information beyond the truth of the statement itself. A ZKP must satisfy three properties: completeness (a true statement can always be proven), soundness (a false statement cannot be proven), and zero-knowledge (the verifier learns nothing beyond the statement's validity).

2. In blockchain applications, ZKPs serve two primary functions: privacy (proving transaction validity without revealing amounts or parties — as in Zcash's zk-SNARKs) and scaling (proving the validity of thousands of transactions in a single compact proof — as in ZK-Rollups). The latter application has become the dominant scaling paradigm for Ethereum Layer 2 networks.

See also: Layer 2 · Privacy Coins · Rollup