Glossary of Blockchain Terms and Definitions

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51% Attack
A situation in which a majority of miners in the blockchain launch an attack on the rest of the nodes (or users). This kind of attack allows for double spendig. However, this is impossible to achive unless someone finds a way to control 51% of the Bitcoin nodes.

A

Altcoin
All cryptocurrencies that exist as an alternative to bitcoin. As Bitcoin is the first cryptocurrency that captured the world’s imagination, all other coins were subsequently termed “altcoins"(alternative coins)

Address
A Bitcoin address is similar to a physical address or an email. It is the information you need to provide for someone to pay you with Bitcoin. Bitcoin address is nothing but the public key of the keypair. Private of the keypair is retained securely by the user and public key is shared to others to recive the funds (Bitcoins)

Account
In Bitcoin world, an account means Bitcoin address which can be used is to share funds and also to track its the financial activities

Anonymous
Anonymity is when something is not known or named. Bitcoin addresses are 'anonymous', but if an address can be linked to a real-world identity, Bitcoin offers no privacy.

B

Bitcoin
The first, and most popular, cryptocurrency based off the decentralized ledger of a blockchain

Blockchain (Public)
A distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database which is immutable, peer-to-peer ledger that is incredibly difficult to fake and yet remains accessible to anyone. Blockchain is the basis for cryptocurrencies.

C

Centralized
Maintained by a central, authoritative location or group

Chaincode
A program that initializes and manages a ledgers state through submitted applications. It is the Hyperledger Fabric equal to Smart Contracts

Coin
Representation of a digital asset built on a new blockchain

Consensus
When a majority of participants of a network agree on the validity of a transaction

Cryptographic Hash Function
A function that returns a unique fixed-length string. The returned string is unique for every unique input. Used to create a “digital ID” or “digital thumbprint” of an input string. Hash value is also called as Message Digest.

D

Dapps
Decentralized Applications

DAO
A decentralized autonomous organization is an organization that is run through rules encoded as computer programs called smart contracts(Used in ethereum BlockChain).

Decentralized
The concept of a shared network of dispersed computers (or nodes) that can process transactions without a centrally located, third-party intermediary.

Digital Asset
Any text or media that is formatted into binary source. All cryptocurrencies cas be considered as Digital assets.

Digital signature
A mathematical scheme used for presenting the authenticity of digital assets. It is ainly used in Publickey (Asymmetric) Cryptography

Distributed Ledger
A database held and updated independently by each participant (or node) in a large network. The distribution is unique: records are not communicated to various nodes by a central authority

E

Ethereum
Blockchain application that uses a built-in programming language that allows users to build decentralized ledgers modified to their own needs. Smart contracts are used to validate transactions in the ledger.

F

Fork
Alters the blockchain data in a public blockchain. Fork divides the Blockchain tree into multiple paths.

G

Gas (Ethereum)
Measures how much work an action takes to perform in ethereum

Genesis Block
The initial block within a blockchain.

Gossip Protocol
A gossip protocol is a procedure or process of computer-computer communication that is based on the way social networks spread information or how epidemics spread. It is a communication protocol used in distributed peer-to-peer network.

H

Hard Fork
Alters the blockchain data in a public blockchain. Requires all nodes in a network to upgrade and agree on the new version.

Hash function
A function that maps data of an arbitrary size

Hyperledger
Started by the Linux Foundation, Hyperledger is an umbrella project of open source blockchains

Hyperledger Composer
Hyperledger Composer is Blockchain Application Development framework which simplify the blockchain application development on Hyperledger Fabric

Hyperledger Fabric
Hyperledger project hosted by Linux which hosts smart contracts called chaincode

I

Immutable
“unable to be changed”. Data stored in a blockchain is can never be altered thus provides immutability.

Initial Coin Offering (ICO)
The form in which capital is raised to fund new cryptocurrency ventures. Modeled after an Initial public offereing (IPO). Funders of an ICO recieve tokens.

M

Merkle Tree
A tree in which every leaf node is labelled with the hash of a data block and every non-leaf node is labelled with the cryptographic hash of the labels of its child nodes. Merkle tree is a data structure that enhances the efficiency of bitcoin and other cryptocurrencies. The Merkle tree encodes the blockchain data in an efficient and secure manner. It is the hash of all the hashes of all the transactions that are part of a block in a blockchain network.

Merkle root
A root/parent node in a Merkle Tree. It is a simple mathematical way to verify the data on a Merkle tree. The Merkle tree and Merkle root mechanism significantly reduce the levels of hashing to be performed, enabling faster verification and transactions.

Mining
The act of validating Blockchain transactions. Requires computing power and electricity to solve “puzzles”. The puzzle to solve here is to find the Message digest or Hash value that starts with certain Zeros (Mining Difficulty) by running Hash functions consequently until the match is found. Mining rewards coins based on your computing power

Mining pool
A collection of miners who come together to share their processing power over a network and agree to split the rewards of a new block found within the pool.

N

Node
A copy of the ledger operated by a user on the blockchain

Nonce
A number used once in a cryptographic communication. Nonce is the value that is consequently altered during Mining process to find the target hash value that meets the Mining difficulty.

O

Ommer (aka Uncle)
A block which has been completely mined but has not yet been added to the Blockchain.

P

P2P (Peer to Peer)
Denoting or relating to computer networks in which each computer can act as a server for the others, allowing shared access to files and peripherals without the need for a central server

PKI (Public Key Infrastructure)
A set of roles, policies, and procedures needed to create, manage, distribute, use, store, and revoke digital certificates and manage public-key encryption.

Private Blockchain
Blockchain that can control who has access to it. Contrary to a public blockchain a Private Blockchain does not use consensus algorithms like POW or POS, instead they use a system known as byzantine fault tolerant(BFT). BFT is not a trustless system which makes a BFT system less secure.

Proof of Activity
Active Stakeholders who maintain a full node are rewarded

Proof of Burn
Miners send coins to an inactive address essentially burning them. The burns are then recorded on the blockchain and the user is rewarded.

Proof of Capacity
Plotting your hard drive (storing solutions on a hard drive before the mining begins). A hard drive with the fastest solution wins the block

Proof of elapsed time
Consensus algorithm in which nodes must wait for a randomly chosen time period and the first node to complete the time period is rewarded

Proof of Stake (POS)
A consensus algorithm that chooses the owner of a new block based on the wealth they have or (Stake). There is not a block reward so the forgers take the transaction fee.

Proof of Work (POW)
A consensus algorithm which requires a user to “mine” or solve a complex mathematical puzzle in order to verify a transaction. “Miners” are rewarded with Cryptocurrencies based on computational power. This the default algorithm used initially by all crypto currencies. In order to reduce the Carbon footprint that is caused by electricity power usage requried in Mining process by this algorithm, other alternatve algorithms were proposed and used.

Public key cryptography
Encryption that uses two mathematically related keys. A public and private key. It is impossible to derive the private key based on the public key.

S

Sharding
Dividing a blockchain into several smaller component networks called shards capable of processing transactions in parallel.

Smart Contract
Self executing contract with the terms of agreement written into the code using languages(Solidity) developed for writing Smart Contracts.

Solidity
Solidity is a contract-oriented programming language for writing smart contracts. It is used for implementing smart contracts on various blockchain platforms.

T

Token
Representation of a digital asset built on an existing blockchain

Turing Complete language
A language that is able to perform calculations that a computer is capable of

U

UTXO (Unspent Transaction Outputs
Unspent transaction outputs are used to determine whether a transaction is valid

V

VIPER
A programming language created to be a formal introduction to smart contracts

W

Wallet
Stores the digital assets like Bitcoins. In fact, the digital assets are not physically stored in Wallet. They are stored in Blockchain. Wallet stores your private key (and its associated public key) so that you can prove that you own the assets(coins) stored in the Blockchain transaction for that public key. So wallets should be kept secure from thefts.