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
Threshold Signatures Scheme (TSS)
- Threshold Signatures Scheme (TSS) removes the burden of the single atomic private key and splits the responsibility between multiple parties. Each of the parties generates its own secret and uses this secret to distributively sign a transaction without revealing the secret to the other parties.
- 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