Blockchain Glossary — 50 Enterprise and Regulatory Terms

AML (Anti-Money Laundering)

A set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. FinCEN administers AML requirements for US crypto businesses. Key AML requirements: customer due diligence, transaction monitoring, SAR filing, and record retention.

ATS (Alternative Trading System)

An SEC-registered trading platform for securities that is not a national securities exchange. Security tokens must trade on an ATS — not on a DEX — in the US. Examples: tZERO, INX, Fusang.

BitLicense

New York State's cryptocurrency business license, administered by the New York Department of Financial Services (NYDFS). Required for entities engaging in 'Virtual Currency Business Activity' with New York residents. One of the most stringent crypto licenses in the US.

Blockchain Trilemma

The observation that a blockchain system can optimize for only two of three properties simultaneously: Security, Scalability, and Decentralization. Layer 2 solutions attempt to inherit Layer 1 security while adding scalability.

BRC-20

An experimental token standard on Bitcoin using Ordinals inscriptions. Unlike ERC-20, BRC-20 has no smart contract execution — balance state is maintained by off-chain indexers. Suitable for fungible token creation on Bitcoin; not DeFi-composable.

BSA (Bank Secrecy Act)

The 1970 US federal law requiring financial institutions (including crypto MSBs) to maintain records and file reports with FinCEN to help detect and prevent money laundering. The primary US AML statute.

CBDC (Central Bank Digital Currency)

A digital form of fiat currency issued directly by a central bank. The Federal Reserve is researching (not yet issuing) a digital dollar. Different from stablecoins: CBDCs are direct central bank liabilities.

Certificate Authority (CA)

In Hyperledger Fabric, the CA issues X.509 digital certificates to network participants (organizations, peers, orderers). Certificate-based identity is the foundation of Fabric's permissioned access model.

Chaincode

Hyperledger Fabric's equivalent of a smart contract. Written in Go, Node.js, or Java. Runs in Docker containers on peer nodes. Defines the business logic of the blockchain application.

Channel (Fabric)

A private sub-network within a Hyperledger Fabric network. Organizations within a channel share a private ledger and chaincode. Organizations in different channels cannot see each other's transactions — the primary privacy mechanism in enterprise blockchain.

Consortium Blockchain

A blockchain network governed by a defined group of organizations, rather than public (permissionless) or private (single organization). Most enterprise blockchains are consortiums. Examples: Hyperledger Fabric networks, R3 Corda networks.

Custodian

An institution responsible for safekeeping financial assets on behalf of clients. In crypto: institutional custodians include Coinbase Custody, Fidelity Digital Assets, and BitGo. Required for institutional investors who cannot hold private keys directly.

Data Availability

Whether historical blockchain data (old blocks, transaction details) remains accessible. Ethereum's data availability challenge: nodes prune old state to save storage, making historical state queries difficult. Solutions: Ethereum Archive Nodes, The Graph, Etherscan API.

DFARS (Defense Federal Acquisition Regulation Supplement)

US Department of Defense contracting regulations. DFARS 252.204-7012 requires DOD contractors to implement NIST SP 800-171 security standards — relevant for enterprise blockchain deployments serving government contractors.

Digital Signature

A mathematical scheme proving the authenticity and integrity of a digital message. In blockchain: ECDSA (Ethereum) or EdDSA (Solana) signatures prove that the holder of a specific private key authorized a transaction.

DLT Settlement Finality

The point at which a transaction becomes irreversible. Ethereum PoS: economic finality after 2 epochs (~12 minutes). Hyperledger Fabric: immediate finality — transactions are final when committed to a block. Traditional finance: T+2 (2 business days).

ERC-1400

A security token standard for Ethereum implementing: transfer restrictions (KYC/AML compliance), forced transfers (regulatory requirement), issuance and redemption, and document management. The primary standard for compliant security token issuance on Ethereum.

FATF (Financial Action Task Force)

The intergovernmental body that sets international AML/CFT standards. FATF Recommendation 16 (the 'Travel Rule') requires virtual asset service providers (VASPs) to share originator and beneficiary information for transfers above $3,000.

Formal Verification

Mathematical proof that a smart contract satisfies specified properties for all possible inputs and states. Stronger guarantee than testing. Tools: Certora Prover, K Framework, Act. Used by highest-TVL DeFi protocols.

Governance Minimization

The design principle of reducing the number of governance decisions a protocol requires — minimizing human intervention and attack surface. Immutable protocols (e.g., Uniswap V2's core contracts) achieve the highest governance minimization.

HSM (Hardware Security Module)

A physical device that stores cryptographic keys in tamper-resistant hardware. FIPS 140-2 Level 3 HSMs are required for institutional-grade key management. AWS CloudHSM and Thales Luna HSMs are common in enterprise blockchain deployments.

IBC (Inter-Blockchain Communication)

The Cosmos ecosystem's cross-chain messaging protocol. Enables trustless asset and data transfer between any IBC-compatible blockchains. Analogous to TCP/IP for blockchain interoperability.

Immutability

The property that once data is recorded on a blockchain, it cannot be altered or deleted. This is the foundational trust guarantee of blockchain — combined with consensus, it ensures that historical records are tamper-evident.

IOSCO (International Organization of Securities Commissions)

The international body of securities regulators. IOSCO guidance on crypto asset regulation influences how SEC and CFTC develop their frameworks. Published DeFi guidance in 2023 recommending regulation of DeFi governance token holders.

IPFS (InterPlanetary File System)

A distributed content-addressed file storage system. Files are identified by their content hash (CID — Content Identifier), not their location. Used for NFT metadata and images because content addressing provides immutability guarantees.