(blockchain jargon, terms and definitions)
An actor in the blockchain industry basically refers to any entity with the capabilities for participating in a specific network or an action.
The address in terms of blockchain generally refers to the public address related to a private key. The addresses work as the identity of an actor or an account. In most cases, the addresses are available in hexadecimal notations.
Airdrop is a method for token distribution that helps in sending tokens or cryptocurrency to wallet addresses. Airdrops are also utilized in the case of marketing purposes for simple tasks such as app downloads and reshares, and referrals.READ MORE"
The digital currency alternatives for Bitcoin are called altcoin, with the majority of altcoins being forks of Bitcoin, with few changes. READ MORE"
Bitcoin also referred to as BTC, is a decentralized blockchain tailored particularly for transaction of tokens between accounts. The most important highlight of Bitcoin is that it is the first blockchain-based cryptocurrency. Bitcoin features a Proof-of-Work or PoW consensus algorithm and leverages Unspent Transaction Outputs (UTXOs) for storing data. READ MORE"
Blockchain is an innovative method for data storage in discrete sections in the form of blocks, which are linked to each other. It is basically a consensus digital ledger including digitally recorded data in different sections such as blocks. Every block is related to the next block through a cryptographic signature. Blockchains could provide criteria for the type of data eligible for storage on the block and invalid data, which should be rejected. READ MORE"
CeFi or centralized finance refers to a structured service for controlling all orders through one central exchange without any competing parties. CeFi basically aims at ensuring fair trades, improving buying and selling processes alongside boosting additional transactions. READ MORE"
Corda is basically an open-source blockchain project tailored for business functions. It helps in developing interoperable blockchain networks with formidable indications for conducting transactions in complete privacy. Corda features smart contract technology for enabling businesses to complete direct transactions with better value. READ MORE"
Interpreted as the combination of CeFi and DeFi, CeDeFi is a hybrid centralized decentralized system. It is basically a new approach that aims to use the best of DeFi and CeFi for modernizing conventional financial management. The world’s leading crypto exchange platform, Binance, has started the DeCeFi movement with their Binance Smart Chain. READ MORE"
Consensus is an important process in the blockchain industry that is essential for helping different sections of a network in determining a single source of truth. Blockchain networks depend on consensus algorithms for reaching an agreement in terms of the blogs eligible for addition to the chain and the validity of nodes. READ MORE"
CBDC refers to the proposals that involve digital currency, issued by a central bank. Although the term is not well-defined, it represents a new form of central bank money. READ MORE"
Consortium refers to the private blockchain network operated by a company or a group of agencies. Consortium chains generally management information that is not fit for public release albeit needs to be communicated immutably between two concerned parties. READ MORE"
Cryptocurrency refers to currencies that are digitally distributed and traded with establishing proof of ownership through cryptographic methods. For instance, it is not possible to transfer Ether from an account without any control over the private key related to the concerned account. READ MORE"
DApp or decentralized apps are similar in terms of operations with regular web applications. On the other hand, they can retrieve information about their state and data from specific or multiple blockchain networks. You wouldn’t need a central web server for the functioning of DApps. In addition, DApps communicate with each other through the messaging protocol used by blockchain networks connected to them. READ MORE"
DeCeFi or decentralized CeFi is basically a new approach that aims to use the best of DeFi and CeFi for modernizing conventional financial management. The world’s leading crypto exchange platform, Binance, has started the DeCeFi movement with their Binance Smart Chain.
Decentralized points out the shift of data, actions, and other associated interests from a single actor towards distribution throughout all actors.
A decentralized Autonomous Organization or DAO points out a company or group of like-minded people operating on the basis of rules established in a smart contract. DAOs are generally helpful for transforming business logic to software logic documented on a blockchain. READ MORE"
Decentralized finance or DeFi is a paradigm shift in the economy powered by decentralization, especially in blockchain networks. DeFi points out the radical transition from centralized and closed financial systems to universally accessible economies. DeFi relies on open protocols with the assurance of programmability, ease of composition, and interoperability. READ MORE"
Digital identity is basically an online identity or identity on a network adopted by an organization, individual, or electronic device. READ MORE"
Digital signature is a code created through public-key encryption followed by being attached to electronically transmitted documents for verifying the contents of the document.
Directed Acyclic Graph or DAG is a directed graph structure, such as a flow chart, without any recursive routes. DAGs are applicable in the blockchain industry primarily for creating links between blocks, data storage structures, and transactions. READ MORE"
Distributed ledger is the database spread throughout various sites, institutions, and countries with sequential storage of records in a continuous manner. The data in distributed ledger could be permissioned or unpermissioned, depending on the control privileges for viewership of the data. READ MORE"
Double-spend attacks basically refer to malicious attempts for convincing two different parties about the validity of one of two conflicting transactions. In such cases, both transactions can appear valid, although with setbacks when combined together. Blockchain reorganizations such as natural forks imply that verification of the addition of a transaction in a block does not refer to its immutability. Transactions will be immutable only after reaching a certain chain depth where chain reorganization cannot affect them. It is possible to reduce double-spend attacks by waiting to confirm a transaction by the network.
Ether, also known as ETH, is the base cryptocurrency tailored for the Ethereum blockchain network. Ether basically serves as the currency for paying transaction fees to miners. Most important of all, it is stored in terms of individual accounts rather than in the form of Unspent Transaction Outputs or UTXOs. READ MORE"
EWASM refers to the web assembly or WASM version implemented by the Ethereum Virtual Machine for ensuring improved functionalities in blockchains.
EOS basically points out the Blockchain 3.0 chain, tailored specifically for emphasizing transaction throughput. It leverages the web assembly or WASM for smart contracts and the delegated proof-of-stake or DPoS consensus mechanism. READ MORE"
Ethereum is one of the prominent examples of the decentralized chain in Blockchain 2.0. As a matter of fact, it will be the first major smart contract platform that enjoys considerable support of Fortune 500 companies through the Ethereum Enterprise Alliance or EEA. Ethereum presently depends on a Proof-of-Work or PoW consensus algorithm. However, future modifications in the protocol can imply the need for updating to a Proof-of-Stake or PoS algorithm for better scalability. READ MORE"
A cryptocurrency exchange is commonly evident in the world of blockchain, especially as a service for trading cryptocurrency tokens for fiat or other tokens. Exchanges are subject to intensive regulations in the US, the European Union, and eastern Asia.
ERC refers to Ethereum Request for Comment and is associated with an assignment number related to the standard. ERC20 is a technical standard for smart contracts implemented by the majority of Ethereum tokens. The ERC20 standard lists certain rules which specify requirements that a token should fulfill for maintaining compliance and functioning in the Ethereum network. READ MORE"
The Ethereum Enterprise Alliance or EEA refers to a group of medium to large businesses with a public commitment to support Ethereum development and creating applications tailored for the protocol. READ MORE"
Ethereum Improvement Proposals or EIPs provide a description of standards for the Ethereum platform, such as contract standards, core protocol specifications, and client APIs.
Ethereum Virtual Machine is a simulated state machine that depends on eWASM bytecode for processing transactions. In addition, it can also facilitate opportunities for performing state transitions for the Ethereum blockchain. The state of the EVM will be similar on all nodes in the network, with the impossibility of generating different states by using the same inputs.
Decentralized exchange basically refers to a cryptocurrency exchange hosted completely through a decentralized app on a specific blockchain. Decentralized exchanges generally don’t allow the conversion of cryptocurrency to fiat. Furthermore, decentralized exchanges also present more difficulties in comparison to standard exchanges for regulations and sanctions.
Fiat refers to a nationally adopted currency that has the backing of the government. For example, the US Dollar and Euro are examples of fiat currencies. Fiat currencies are generally favorable due to their traditional applications and legal status.
Fork in the world of blockchain refers to the process of creating a unique network by using the same consensus mechanism or protocols as the previously existing network. Forks could contain the state of the original network or instantiate their own state. You can find two categories of forks such as hard fork and soft fork. The hard fork features permanent incompatibility with the existing network. The soft fork features compatibility with the data on the original chain. READ MORE"
Fintech word is a combination of two terms finance and technology. The combined term Fintech refers to a business that involves the use of technology for the automation or enhancement of financial services and processes.
FINCEN is the U.S. federal agency that investigates and prosecutes finance-related crimes, like money laundering. The rules and regulations of FinCEN cover many points related to the use of cryptocurrency.
Gas in the blockchain terminology refers to a measure of the computational difficulty needed for processing a smart contract function. Functions with additional complexity would require additional gas. Users could find gas as hardcoded values for each operational code, such as in the case of Ethereum. On the other hand, gas could also refer to subjective values that depend on miner’s preferences. READ MORE"
Gas price refers to the number of tokens charged as fee for every unit of gas consumed by function of smart contract. Gas prices can help a network in responding dynamically to fluctuations in bandwidth demand on the grounds of market forces.
It is the initial data block that was computed first in the history of blockchain network.
Gossip protocol refers to a process through which actors in a network can exchange information with other members easily. Upon receiving new information, an actor relays the information to all other actors. The cumulative connection of all actors in a network ensures that all of them receive the information eventually.
The Graphical User Interface or GUI is basically an instrument for displaying information to users through personalized design of on-screen elements such as taskbars and windows.
Hash is an important element in the description of blockchain infrastructures. It refers to the output of a cryptographic function for mapping inputs to particular outputs that seem arbitrary. Hashes are primarily useful for efficient data identification. READ MORE"
Cryptocurrencies such as Bitcoin run on a finite supply, thereby implying their characterization as a scarce digital commodity. The total amount of Bitcoin issued could never cross 21 million. So, the number of Bitcoins generated for every block is reduced by half every four years in a process known as halving.
Hashrate refers to the rate at which a specific machine is capable of addressing a particular hashing function. The Hashrate is generally similar to common CPU speed. Hashrate is calculated on the basis of number of times that a machine could perform specific functions per second. As a result, ASICs are capable of showcasing higher hashrate in comparison to processors with similar clock speed.
Hashgraph is a decentralized ledger that depends on a gossip protocol for communicating transactions alongside a tangle-style consensus approach. READ MORE"
Hardware wallet refers to any physical device such as the popular Ledger Wallet, which can be connected to the web with a facility for interaction with online exchanges.
Hash collision happens in the circumstances when two inputs are mapping to the same output hash. However, it is impossible to offer two sets of meaningful data with colliding hashes. Although users can construct hashes from data, they cannot reconstruct data from hashes.
Hash function refers to a cryptographic function that enables mapping of inputs to particular yet visibly random outputs.
Hexadecimal notation is basically the representation of raw data in base of 16 rather than base of two or base of 10.
The hot wallet in blockchain points out to wallets that are connected directly to the internet at all times, such as the ones held on centralized exchanges.
The hybrid consensus model focuses on combining the best functionalities from Proof of Stake (PoS) and Proof of Work (PoW) consensus mechanisms. Hybrid consensus model enables validation of blocks by miners as well as voters, thereby leading to balance in network governance.
Hyperledger is one of the top enterprise favorites for leveraging the power of blockchain. Hyperledger features an assortment of tools offered by IBM and helps in creating enterprise-level consortium chains with hosting by The Linux Foundation. READ MORE"
Immutability is the property of data for showcasing additional resistance to modifications. It is a key aspect of blockchain networks and ensures that data written on a blockchain ledger cannot be modified.
ICO or Initial Coin Offering, also known as Initial Token Offering, is similar to the public offering of stocks in the financial markets. It offers a way for tokenized businesses to obtain investment from the public. ICOs come under the regulation of the Securities and Exchange Commission or SEC. READ MORE"
IPFS basically refers to a system for decentralized file storage and referencing for the Ethereum blockchain. It is an open-source protocol for enabling the storage and sharing of hypermedia in a distributed manner. Most important of all, IPFS does not depend on a single point of failure.
KYC is a procedure in which a business verifies the genuineness of the customers by verifying their background and identity.
Liquidity refers to the availability of liquid assets to a market or company. An asset is associated with higher liquidity for easier conversion to cash. Difficulties in converting an asset into cash make the asset illiquid. The liquidity of an asset influences its market price and risk potential.
Liquid Democracy, also known as Delegative Democracy, is a system, generated by government in which votes can be proxied (delegated) to any other individual. This term was founded as a mechanism for Decentralized Autonomous Organizations where every participant can delegate their vote to another individual.
Miner in the world of blockchain points out to an actor with the ability to create and submit new blocks to the chain. CPU miners generally use central processors for block production and validation. GPU miners are known for using their graphics processor to address block validation and production. Miners using ASIC for block validation and production are known as ASIC miners.
Mainnet is the largest blockchain network run by a specific protocol or the most valuable chain of a community. They exist in places of deriving real value and representation of truest intents of the core developers. READ MORE"
Market Caplitalization, also known as Market Cap, is the total value of a particular market, industry, company, or asset. For a company that is publicly traded, the market capitalization is the total market value (in dollar) of the outstanding shares of a company.
Merkle Proof basically refers to the process of passing through a Merkle tree from leaf to root. Along the way, you have to hash every level with the previous level for producing a unique hash for the tree’s structure.
Merkle Root refers to the cryptographic has of all other hashes in the Merkle Tree. In the case of a blockchain, the Merkle Root refers to a hash of all the transaction hashes in the chain.
Merkle Tree is a data tree with leaves at the end of every branch labeled with an identifier or a cryptographic hash. All branches on a Merkle Tree are labeled with all leaves and sub-branches. The redundancy on a Merkle Tree ensures that any individual with the tree could provide reliable proof of completeness of the data. READ MORE"
The mining pool refers to a group of miners working together for generating the next block on a blockchain before the others in the network.
Multi Signature is a crypto-asset wallet for which there is a requirement of multiple keys to access it. More than one (specified) individuals have to sign a transaction for approval, only then they would be able to access the wallet.
Any participant in the blockchain network connected to peers with the capability of validation and propagation of new blocks is referred to as a node. A full node generally features the complete state of the blockchain. On the other hand, a light node features adequate block data for validation of the chain, albeit without the complete state data related to every block.
The set of actors interconnected collectively for achieving a single purpose is referred to as a network.
NFT is a token that doesn’t have any equal token i.e. considered to be a unique digital asset. READ MORE"
Opcode is basically a machine-level instruction for processors, and they are generally very basic commands such as bit shifting, addition, and multiplication.
The company Oracle creates enterprise-level software systems. On the other hand, as a service, oracles are services for connecting real-world data and blockchain applications.
Protocol refers to a set of rules defined for the exchange and transmission of data. In blockchain, protocol refers to the rules that define how the actions should be performed across a network. READ MORE"
Peer to Peer or P2P refers to a model of interaction between actors involved in a transaction without any external intermediary. READ MORE"
A private blockchain is a closed network where authorized participants are controlled by a single entity. It limits the individuals who can participate in the consensus of the blockchain network. There is a verification process for the new participants to authorize them for participation. READ MORE"
A token or currency that is issued by a private firm or individual. Private currency has limitations to use within a network of that firm or individual who issued it.
Private key is one of the significant components in the public/private key pair and is suitable for asymmetric encryption and decryption.
PKI or Private Key Infrastructure refers to a collection of rules and policies for managing identification through public-key encryption associated with a network.
Proof of Liquidity is a cryptographic assertion method by third-party auditor for verifying that an actor holds a specific number of resources.
PoS refers to a consensus mechanism that ensures that the ability to produce a block must be proportional to the amount of native cryptocurrency held by the actor.
PoW refers to a consensus mechanism that encourages actors to solve computationally difficult problems for developing the ability to produce the next block in a blockchain. READ MORE"
A public blockchain is a globally open network, such that, anyone can participate in the transactions, in the execution of consensus protocol, and in the maintenance of shared ledger. READ MORE"
A specific type of cryptographic equation or collection of parameters corresponding to a related private key is known as public key. Public key is helpful for decrypting a message encrypted symmetrically by leveraging the related private key.
Relayer refers to a party that hosts an off-chain orderbook. Relayer assists traders to find out counter-parties and then exchange order between them in a cryptographic manner.
Ring signature is a private-key focused cryptographic signature with an option for decryption or verification through multiple valid keys.
A small portion of the entire network is known as Shard, whereas Sharding is the process of splitting the complete network into many small portions, shards. Each shard has an independent state i.e. unique smart contract and account balance. READ MORE"
Solidity is a popular smart contract programming language specifically tailored for the Ethereum Virtual Machine.
It’s the name that was used by the assumed individual/ individuals who developed bitcoin. Nakamoto published the white paper in 2008, describing about the project. He also invented the first blockchain database. READ MORE"
Scalability refers to the ability of a blockchain project to handle the network traffic, capacity of application, and future growth.
Secure Hash Algorithm or SHA is a cryptographic hashing function tailored by the United States National Security Agency. You can find the specific implementation of the algorithm by its numeric suffix.
It is process of converting a data structure into an encoding format that consists of the series/sequence of bytes.
Smart contract in blockchain refers to the code that you can execute in the environment of a virtual machine. READ MORE"
Stablecoin is the cryptocurrency that minimizes the volatility of the stablecoin price, with respect to an asset or assets. Stablecoin is measured with respect to a known amount of an asset, so it remains stable. READ MORE"
State machine basically points out to a model of computation, and at any specific instance, a state machine could feature one out of a finite set of states.
A token is the digital representation of an asset built over existing blockchain. They are designed for uniqueness, instant transferability, liquidity, digital scarcity, and security.
An alternative to blockchain developer who tests the applications in a somewhat real (near-live) environment.
It refers to an Ethereum Testnet that supports parity clients and uses Proof of Authority consensus.
It refers to an Ethereum Testnet that supports geth clients and uses Proof of Authority consensus.
It refers to an Ethereum Testnet that supports both the geth and parity clients and uses Proof of Authority consensus.It is mostly similar to mainnet.
Tokenization is a process that allows the translation of business goods, strategies, or services into discrete units that are tradable and can be recorded on a blockchain. READ MORE"
It is a functional, less universal programming language that lacks non-deterministic functions, but have more characteristics.
An input/ addition into a blockchain that can make some changes in the existing blockchain data is known as a transaction. READ MORE"
Transaction block refers to a collection of transactions on the blockchain that can be hashed and submitted to the blockchain.
The minimal fee imposed on certain transactions delivered through a blockchain network is known as the transaction fee.
Transaction pool is a pool or list of transactions, propagating through a common network, but haven’t added in a block.
A machine that can perform any task or algorithm, that can be performed by a computer.
UTXOs enabled blockchains to have each transaction referencing the output of previous transactions and consuming all the tokens of the output. UTXO is important for reinforcing the immutability of blockchain.
Vyper is a programming language, that is used for building smart contracts. It can also be complied for Ethereum.
The validator in a blockchain ecosystem basically refers to a participant in Proof of Stake consensus algorithm. Validators have to submit security deposits for inclusion in the validator set.
Virtual Machine refers to an operating system that runs on another operating system. Virtual Machines are important for allocating the processing strength of large servers to the simpler / smaller applications.
Wallet is a software, containing private keys, that interact with the PKI (Private Key Infrastructure).
A multi signature wallet needs more than one private key signature for generating a valid transaction. Multi signature wallet can be shared by multiple actors while it’s not necessary that they all will participate in every transaction.
Zeppelin is a reference to a community of smart contract developers. It is also sometimes known as "Open Zeppelin".
zk-SNARK (zero-knowledge succinct non-interactive argument of knowledge) is a cryptographic proof system that is used to verify a transaction without disclosing the transaction data, and without connecting with the user who initiated that transaction.
Zero-Knowledge Proof is a cryptographic mechanism meant for helping users in representing assertions where output value can be determined easily without any input information.