Blockchain is a challenging topic, especially for newbies in the industry, since it tends to have complex technical terms. Just like the internet in its beginnings, this technology can be hard-to-explain and let alone grasp.
Hence, despite the good will to dive in this world, getting familiar with its terminology seems to be a ‘must’. So first things first! Here is a list of the most commonly used words which are most likely to construct the path down to your domain knowledge.
101: Blockchain Terminology
We say to you:
“Don’t be afraid to ask!”
- Else known as Majority Attack – the event happening when one group of miners is controlling more than half of the network power posing a threat to the integrity of the blockchain.
- Unique string of text that is utilized to recognize who sends and receives in cryptocurrency exchange
- Distribution of token assets to the public, particularly regarding blockchain’s ICOs, either as a reward for positive activity or for no incentive at all Algorithm
- The process of clear instructions to be followed for problem-solving purposes
- The highest level a digital money or equity has reached
- Any alternatives to Bitcoin such as Ethereum
API(Application programming interface)
- A set of keys and functions that a program or application uses to communicate with another (i.e exchange) in order to have access to its features
- The process of taking advantage in different markets through buying and selling of the same asset over specific period of time
- Integrated circuit chip which intends and dedicates to one specific purpose
- A cryptocurrency that is mining-resistant towards dedicated (ASIC) machines
- Occasions that don’t occur simultaneously and do not dependent on the principle program flow.
- Smart contracts that make sure users exchange the cryptocurrencies without the need of using centralized exchange.
- Digital currency, firstly depicted as a “Peer-to-Peer e-cash”
- The execution of the product that allows people to use the Bitcoin network
- Tool, which is used to check the past or current transactions on a blockchain. Also, it provides you with more details like transaction growth and network hash rate.
- The quantity of blocks in the chain among itself and the block 0 on that blockchain
- The entirety of coins granted by the blockchain protocol to digital money miners for each approved block.
- A distributed ledger technology (DLT) that contains nodes/blocks with sequential recordings of the exchange data on the cryptocurrency using a consensus to agree on the value
- An incentive posted in order to boost a particular activity, conduct or advancement.
- A virtual/digital currency verified by cryptography in order to be distributed, exchanged and traded in a Peer-to-Peer network
- The process of creating another adaptation of the blockchain from its current accessible version
- The study of utilizing numerical hypotheses and calculation so as to encrypt and decrypt data
- A method used in encryption and decryption of values, which can be done either asymmetrically or symmetrically depending on the key type
- Applications that run in decentralized networks and are not controlled by a solitary entity
- Decentralized Autonomous Organization – system made popular due to Ethereum, that states hard-coded rules or decentralized organizations but has vulnerabilities that can’t be rolled back
- Decentralized Exchange – exchange systems where people can access trading legitimately from their wallets without having to store or hold their assets initially
- The process of turning indiscernible information into coherent information
- It refers to the difficulty level to verify blocks in the blockchain network in Proof-of-Work mining.
- Ledgers that hold data across the blockchain without the need to contain its own currency
- Instruction and Decision-making mechanisms do not execute on one single entity, but instead are distributed over blocks (nodes).
- An identifier code that derives from encrypting public key and goes along with the verification document of the sender.
- The process of turning coherent information into indiscernible information for security reasons related to unauthorized availability to the data.
- The standard protocol that refers to the tokens issuing on Ethereum.
- Ethereum Classic – a hard fork of the original Ethereum blockchain that happened right after the DAO hack
- Platform technology that, unlike Bitcoin, enables the developing and functioning of blockchain-based applications by running smart contracts
- The basic unit of the network effort to go through with the exchange data on Ethereum
- Else known as Consortium blockchain – a partly private system that consists of a user group with controlled access and that can function across different companies
- Money that is formally authorized by a government
- Fear of missing out – When the user makes a decision based on fearful perception he/she may have on the going opportunity of making profit when crypto coin price rises, i.e Bitcoin price increase.
- Fear, Uncertainty and Doubt – In relation with the cryptocurrency’s whole concept, i.e Bitcoin’s FUD on being a bubble.
- A machine that does the complete implementation of the protocols of the blockchain and makes sure the transactions and blocks that go through it are validated.
- The mechanism that Ethereum has implemented for calculating the pricing and fees of smart contract operations and transactions.
- The highest level a user is willing to pay for a transaction’s or smart contract’s fee.
- The initiating block on a specific blockchain, else known as Block 0 or 1
- A web-based version-control and collaboration platform/repository for software developers to store the code they own or an open source one.
- The predetermined process of a block reward of a crypto asset decreasing by 50% with the purpose to reach a finite supply of this specific asset.
- A function that aims to produce a new mapped version of data inputted.
- The speed at which a machine can calculate new hashes (hashes/second)
- An HD Wallet, or Hierarchical Deterministic wallet, is a digital wallet that automatically generates a hierarchical tree-like structure of private/public addresses (or keys), thereby addressing the problem of the user having to generate them on their own.
- Hashed TimeLock Contract – a feature that creates smart contracts in cryptocurrency which can edit its channels by implementing time-bound transaction and eliminating risk.
- High-Frequency Trading – type of algorithmic trading that enables the execution of a large number of orders in a very short period of time.
- Hold on for Dear Life – hold on to the ownership of the asset and not sell
- Initial Coin Offering – The stage at which the new digital coin assets are offered and sold to investors
- Initial Exchange Offering – The stage at which a credible intermediary is put between the coin offering team and the user in order to facilitate and reduce risky purchases
- Initial Public Offering – The stage at which the private companies’ shares are offered and sold to the public for the first time
- A chip that consists of transistor, resistors or capacitors that is used for different functions such as for computer memory or microprocessor.
- The process of validating the compatibility of blockchains which allows for further usage of their features
KYC(Know your customer)
- A process in which a business must verify the identity and background information (address, financials, etc) of their customers.
- Time taking from the submission of the transaction until the confirmation of its acceptance to the blockchain
- Physical or digital file where transactions are tracked and recorded
- The original BTC locations which are supported by all wallets for transactions.
- The layer 2 payment protocol that executes on top of the blockchain-based cryptos that enables speed increase in transactions within nodes and aims to solve scalability problem.
- A blockchain protocol that offers users the possibility to send and receive digital assets. Unlike Testnet, Mainnet is fully developed and deployed for the end-user.
- Migrating coin from one blockchain network to another by replacing it with a new digital asset.
- A user that is placing an order which doesn’t not get traded right away and as such it is maintained in the order book.
- A program or application that operates with the intention to produce threat to a computer system.
- The process of merging two or more mining processes without putting the overall performance at risk.
- A type of data structure that contains hash functions and that facilitates the organization and structuring when dealing with lots of data
- An actor in blockchain technology which is capable of creating new predetermined number of blocks or by competing to add to the network.
- The addresses that enable several parties to need more than one key to authorize the transaction. These addresses have much higher resistance to theft.
- A unit of the blockchain that enables communication between other units for security and integrity purposes
- A decentralized blockchain platform that is open-source and that creates efficient dApps through smart contracts 2.0
- Non-fungible token – A token that the user can’t substitute and is useful for unique asset representation.
- Transaction that is not happening on a blockchain for cost and speed facilitation
- A physical print of the digital asset’s address with the private keys in accordance
Peer to Peer
- Instruction and Decision-making mechanisms do not execute on one computer, but the workload is instead shared with the participating computers
Progressive Web application
- A web-app developed using modern technologies and that meets certain web standards
- Proof-of-Stake – an algorithm that doesn’t need a lot of powering energy, where the more digital assets are staked, the higher is the probability that the block will be picked for deciding on the consensus
- Proof of Work – an algorithm where work is considered to be the activity done in mining which determines the amounts of reward the miner receives
- Private Blockchain only allows authorized entities to send or receive transactions within the network. No one can write/read or audit the records stored on the private blockchain unless someone has permission to do.
- The text string that is used for enabling security in a block chain by going through encryption and decryption processes and additionally for having wallets and transactions accessible on the blockchain
- Public Blockchain is an open network which allows anyone from the world to send or receive transactions.
- The study where data encoding is done not in the traditional bits but into bits that can represent a one, a zero, or some combination
- The process of posing threat in an ISP level in order to affect blockchain
- Smallest unit in Bitcoin named after Satoshi Nakamoto, the creator
- A device which is used to grant access to a restricted resource and are given to investors after participating in an ICO
Segregated Witness (SegWit)
- A process that enables a higher number of transactions to be part of a block by separating them from coin bitcoin transactions
- Segregated Witness Wallets – service that is executed on Bitcoin blockchain and is concerned on separating particular transaction signature information and it can either be nested or native.
- Non-physical contracts that programmatically state business conditions, which are derived from the participants, into the network
- A digital asset that is intended to keep its stable value and not go through changes
- An interaction channel between two participants, either users or blocks, on a network
- A programming language used in the Ethereum blockchain for smart contract creation
- A type of software used by cryptocurrency with the sole purpose of testing changes while not affecting the overall functioning of the main blockchain
- The short version name of the coin on the trading platform (i.e BNB)
- Else known as ICO – Issuance of tokens and then selling them to another digital asset
Transaction ID (TXID)
- Else known as Transaction has – The users use it to recognize and reference transactions in the network.
Transaction Per second (TPS)
- The quantity of transactions that the processing power of a blockchain can operate each second
- A system that represents the automation of solving any kind of problem given enough resources
- The establishment of the interaction ways between a machine and a user
- Token aimed for accessing a specific product and that are also used in the ICOs processes
- Unspent Transaction Output – abstract chain ownership that takes care for starting and finalizing each transaction.
- The concept of being a member as longs as the user has 1/10,000th of all the mined Bitcoin
- The software, hardware or paper location where a user can keep private keys, and that he uses for sending and receiving cryptocurrencies.
- The necessity of particular node to rely on the other nodes when defining the current state of the system. It is a prerequisite on PoS.
- The smallest denomination of ether, the digital coin on the Ethereum blockchain.
- Entities that own a high number of digital currencies
- ERC-20 token – Shows Ether at 1:1 ratio and enables users to trade it with ETH.
- Extended public Key – key containing information on public keys in cryptocurrencies’ transactions which permits complete read-only view to a particular wallet regarding locations, transactions and balances compatible with Legacy wallets
- Key containing information on public keys in cryptocurrencies’ transactions which permits complete read-only view to a particular wallet regarding locations, transactions and balances, compatible with Nested SegWit Wallets
- Technology used to verify transactions happening on blockchain without posing threat to the privacy of the wallets or the data which is being exchanged