Account Abstraction
A paradigm shift in blockchain wallet design (formalized in Ethereum's ERC-4337) that replaces traditional externally owned accounts (EOAs) requiring direct private key management with programmable smart contract wallets. Account abstraction enables features previously impossible: social recovery, gas sponsorship (someone else pays your fees), session keys, transaction batching, and multi-factor authentication — all at the wallet level.
“With account abstraction, you could set up a wallet that recovers access through trusted friends (no seed phrase needed), batches multiple DeFi operations into one transaction, and lets a dApp pay your gas fees.”
Wallet
A software application or hardware device that stores the cryptographic private keys needed to access and manage cryptocurrency holdings. Despite the name, wallets don't actually store crypto — the assets exist on the blockchain. The wallet stores the keys that prove ownership and authorize transactions. Wallets can be hot (internet-connected) or cold (offline).
Smart Contract
Self-executing programs stored on a blockchain that automatically enforce the terms of an agreement when predetermined conditions are met. Smart contracts enable trustless transactions without intermediaries because the code, once deployed, executes exactly as written and cannot be altered (unless specifically designed to be upgradeable). They form the foundation of DeFi, NFTs, DAOs, and virtually all dApps.
Gas
A unit measuring the computational effort required to execute operations on the Ethereum network. Users pay gas fees in ETH to compensate validators for processing transactions. Since EIP-1559, gas fees consist of a base fee (burned) and an optional priority fee (tip) to incentivize faster inclusion.
Web3
A vision for the next evolution of the internet built on decentralized blockchain infrastructure, where users own their data, digital assets, and identity rather than relying on centralized platforms. Web3 encompasses DeFi, NFTs, DAOs, decentralized identity, and dApps — aiming to shift power from corporations (Web2) back to individuals through cryptographic ownership and governance.