Glossary

In blockchain terms, the address generally refers to the public address related to a private key. The addresses work as the identity of an actor or an account, and in most cases are available in hexadecimal notations.

Airdropping is a method of token distribution, which helps in sending tokens or cryptocurrency to wallet addresses. Airdrops are typically utilized for marketing purposes to increase app downloads, sign-ups, reshares, and referrals.

Altcoins are digital currency alternatives for Bitcoin. The majority of altcoins are forks of Bitcoin, with few changes. An example of this is Ethereum (ETH).

Anti-money laundering refers to the collection of international laws implemented for reducing the possibilities of money laundering through cryptocurrencies.

Legislation passed in the United States in 1970 that requires financial institutions to assist government agencies in detecting and preventing money laundering. BSA requirements include mandatory reporting of certain activities, record keeping for all customers, and limitations on what kind of monetary instruments may be purchased or exchanged.

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.

Block explorer is the software or GUI graphical user interface, which helps users in reading and analyzing data on a blockchain.

A block’s position index in the blockchain relative to the genesis (zeroeth) block. The 5th block added to a chain will have a block height of 5.

Blockchains with native cryptocurrency allow miners to allocate a specific number of tokens for generating spontaneously and sending to the desired address. The reward compensates for the miner’s support in building a block and the network alongside incentivizing other miners for joining the network.

A canonical block is one that has been incorporated in the primary blockchain. The canonical block is referenced either directly or indirectly by future blocks. Non-canonical blocks which might have validity could be rejected in favor of canonical blocks.

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.

Blockchain transaction fees refer to the fee users are charged when they perform transactions on a blockchain network. The fee is basically the payment for processing a transaction on the network and can help in speeding up blockchain transactions.

Bug Bounty basically refers to a reward paid for completing specific tasks such as identification of code vulnerabilities, design work, social impact, content creation, research, and more.

The closed source software points out proprietary software featuring source code that is not accessible to the public. Users can access the compiled binaries in the form of an executable program. However, the binaries are not human-readable, and users other than the original software developer cannot access them for modifications.

Closed source software is proprietary software with source code that cannot be accessed by the public. The compiled binaries may be available in the form of an executable program (files that end in .exe, .dpkg, etc.) but are not human-readable or available for modification by anyone but the original software developer.

Coinbase is a US-based cryptocurrency brokerage platform, which is the largest exchange in terms of transaction volume and customer base. In comparison to other exchanges, Coinbase features a small count of cryptocurrency offerings. It provides only a specific few dozen tradable cryptocurrencies out of all the available options in the ecosystem.

CLI or Command-Line Interface is a text-based user interface that can offer the core functionalities alongside access to system resources in a better way than GUIs. However, CLI generally lacks the benefits of usability. Therefore, CLI is more suitable for developers in comparison to the average users.

Confirmation in the world of blockchain refers to the process of determining the extent of the immutability of the information in a blockchain. In some cases, confirmations refer to the number of nodes accepted in a transaction, the number of transactions referencing the confirmation, or the number of blocks prior to it. A general transaction in Bitcoin features five confirmations upon producing five blocks after the block containing a specific transaction.

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.

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.

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.

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.

In most specific terms, money in any form, when used in circulation as a medium of exchange is known as currency. Every country has its own currency, like the US dollar is the currency of the USA.

A system of abstract representations of the ability to reconcile debts that is generally accepted or in use. Money is a currency. In the United States of America, the U.S. Dollar is the national currency.

Decentralized Apps (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.

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.

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.

Digital identity is an identity on a network adopted by an organization, individual, or electronic device.

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.

A distributed ledger is the database spread throughout different sites, institutions, and countries with sequential and continuous storage of records. The data in distributed ledger could be permissioned or unpermissioned, depending on the control privileges for viewership of the data.

A malicious attempt to convince two separate parties that one of two conflicting transactions is valid. In such a situation, both transactions appear individually valid, but their combination is not. Thus, only one is included in the blockchain.

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.

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 the miner’s preferences.

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.

Hashgraph is a decentralized ledger that depends on a gossip protocol for communicating transactions alongside a tangle-style consensus approach.

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.

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.

JavaScript is the ideal programming language tailored for browsers and web pages on the grounds of its flexibility. It follows the ECMAScript and is also an interpreted language for developing back-end and front-end solutions.

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.

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.

A miner that utilizes an application-specific integrated circuit (ASIC) to perform block validation and production.

A miner that utilizes its central processor to perform block validation and production. CPU miners are used for mining algorithms that require more generalized processing and cannot be done in parallel (i.e., each operation depends upon the result of the previous one).

A miner that utilizes its graphics processor to perform block validation and production. GPU miners excel at mining algorithms that can be performed in parallel and have a limited number of unique operations (such as Proof-of-Work).

A node that has the complete state of the blockchain is available.

A node that has enough block data to validate the chain but lacks the complete state data for each block.

NFT is a token that doesn’t have any equal token i.e. considered to be a unique digital asset.

Open source software is software for which the source code that is available to the public.

Peer-to-Peer or P2P refers to a model of interaction between actors involved in a transaction without any external intermediary.

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.

A private key can be used to decrypt a message that is symmetrically encrypted using the corresponding public key. Private keys are kept secret from anyone that isn’t the owner. Once a private key is made public, it is useless as a point of authentication.

Proof-of-Work (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.

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.

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.

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.

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.

Smart contract in blockchain refers to the code that you can execute in the environment of a virtual machine.

Stablecoin is a 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.

A consensus mechanism in which transactions must confirm the validity of at least two preceding transactions.

A fork of a blockchain network that has relaxed access requirements in order to allow rapid development of applications without the overhead of the main network.

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.

The quality of not requiring trust. In trustless systems, bad actors are unable to negatively impact the system without the coordination of the rest of the network. Trustless systems use verifiable information or actions to operate and validate the quality of other actors.

Turing completeness refers to the ability of a programming language to simulate a Turing Machine.

A machine that’s capable of performing any algorithm or task that can be accomplished by a computer.

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.