State Machine
A computational model where the blockchain maintains and updates a global state based on transactions.
What is State Machine?
In blockchain systems like Bitcoin and Ethereum, a state machine is a model where the network maintains a global state—representing account balances, smart contract data, or other variables—that evolves through validated transactions. Bitcoin’s state machine tracks unspent transaction outputs (UTXOs) to manage balances, while Ethereum’s tracks account balances and smart contract states via the Ethereum Virtual Machine (EVM). Each valid transaction triggers a state transition, ensuring all nodes agree on the updated state, enforced by consensus mechanisms like proof-of-stake (Ethereum) or proof-of-work (Bitcoin).
Related Terms
BitLicense (New York)
New York Department of Financial Services' licensing requirement for virtual currency businesses, including stablecoin issuers, with enhanced blockchain analytics in 2025.
Conversion Ratio (MSTR)
The number of common shares receivable per convertible security upon exercise.
Decentralization
Decentralization is the distribution of control, authority, and operations across a network of nodes in a blockchain, eliminating the need for a central authority.
Surprisingly Popular Mechanism
A method to elicit truthful answers by identifying responses that are more common than participants expect.
Transaction Fee (DEX)
A transaction fee on a decentralized exchange (DEX) is the cost paid by users to execute trades or provide liquidity, typically comprising trading fees paid to liquidity providers and network fees (gas) paid to blockchain validators.
Decentralized Data Marketplace
A platform for trading data assets without centralized control.