BlockChain Definitions

BlockChain and CryptoCurrency Industy includes many new words ie BlockChain Definitions. If you are interested in this topic, you should know at least the basic definition of some of these words.

BlockChain Example for BlockChain Definitions

What are the main Words you should know? This is a BlockChain Technology Dictionary (BlockChain Technology Glossary) that will explain the meaning of the most important Words.

 

BlockChain Definitions (BlockChain Dictionary)

 

Address

CryptoCurrency address or addresses are used to send and receive transactions in the CryptoCurrency Network. The address is a alphanumeric (A-Z and 0-9) character string. The address can also be shown as QR code that can be scanned.

 

Agreement Ledger

Agreement Ledger is a distributed ledger that is used to negotiate and reach agreement by 2 or more sides.

 

Attestation Ledger

Attestation Ledger is a distributed ledger that holds a durable record of agreements, commitments and statements. Attestation Ledger provides evidence (attestation) that these agreements, commitments and statements were really done.

 

ASIC

Application Specific Integrated Circuit or ASIC in short is a silicon chip, designed to do a single task. In relation to Bitcoin, ASIC‘s are designed to process SHA-256 hashing problems to mine new Bitcoins.

 

Bitcoin (uppercase)

Bitcoin is the worlds most popular CryptoCurrency that is based on proof-of-work BlockChain (See proof-of-work and BlockChain below).

 

bitcoin (lowercase)

bitcoin is Specific collection of technologies used by Bitcoin’s Ledger. Currency itself is one of these technologies for example as it gives miners to motivation to mine new Bitcoins.

 

BlockChain

BlockChain is a type of distributed ledger, that houses unchangeable, digitally recorded data in packages called blocks (It is like collecting this data on a single paper sheet). Using cryptographic signature every block is then chained to the next block. Thanks to this the BlockChains can be used like a Book. It can be shared and access by anyone that has appropriate permission to do so.

 

Block Height

Block Height shows the number of blocks that are connected together in the BlockChain. Height 0 would be the first block in the BlockChain. The First Block is also called The Genesis Block.

 

Block Reward

Block Reward is a reward given to a Miner that has successfully hashed a transaction block. Block Reward can be a mixture of coins and transaction fees. It depends on the policy used by the CryptoCurrency in question and whether all the coins have already been successfully mined. Current Block Reward for Bitcoin is 16.64 BTC (07.01.2018).

 

Central Ledger

Central Ledger is a ledger maintained by a central agency.

 

Change

Future CryptoCurrency Bank. Created by the developers from Skype and Transferwize.

 

Confirmation

Confirmation means that the BlockChain transaction has been verified by the BlockChain Network. It happens through CrytpoCurrency mining (in case of proof-of-work system ie Bitcoin). After the transaction has been confirmed, it cannot be reversed or used again (Double Spend). Transaction can have more confirmations than one. The more confirmations the transaction has the harder it is to do a Double Spend Attack.

 

Consensus Process

Consensus Process is a process where group of peers responsible for maintaining a distributed ledger reach consensus on the content of the ledger.

 

Consensus Point

Consensus Point that is either a point in time or it is defined in terms of a set number or volume of records to be added to the ledger. At this point the peers meet to agree on the state of that ledger.

 

CryptoCurrency

CryptoCurrency is one possible form of a digital currency that is based on mathematics.Generation of currency units and verification of transfer of funds is regulated by encryption techniques. CryptoCurrencies are totally independent of central bank.

For list of All CryptoCurrencies check out THIS PAGE

 

Digital Commodity

Digital Commodity is a small number of electronically transferable, market value having digital materials that cannot be touched.

 

Digital Identity

Digital Identity is an identity used online, in a network or in a cyberspace by individual, organisation or electronic device.

 

Distributed Ledger

Distributed Ledger is a type of a database that is spread across many sites, countries or institutions. The records in that database are stored one after another in a continuous ledger. Distributed Ledger data can be either permissioned or unpermissioned. This is used to control who can view it. (See permissioned and unpermissioned below)

 

Difficulty

Difficulty is used in Proof-of-work mining. It shows how hard it is to verify blocks in a BlockChain Network. In the Bitcoin network, the difficulty of mining changes after every 2016 blocks. This is to keep blocks verification at 10 minutes.

 

Double Spend

Double Spend is a scenario in the Bitcoin Network. It is when someone tries to send Bitcoin transactions to two different recipients at the same time ie double spend 1 Bitcoin. With Bitcoin, once one transaction is confirmed, it is almost impossible to Double Spend it. The more confirmations a transaction has the more difficult it is to Double Spend the bitcoin.

 

Genesis Block

The First block in a BlockChain.

 

Halving

There is limited amount of Bitcoins. This makes Bitcoin a scarce digital commodity. The maximum amount of Bitcoins that can be mined and used in total is 21 000 000 (21 million Bitcoins). The amount of Bitcoins mined per block is decreased 50% at every 4 years. This is called halving. The final halving for Bitcoin will take place in 2140.

 

Hashrate

Hashrate is a number of hashes that can be performed by a Bitcoin Miner in a given period of time. Usually this time is 1 second.

 

Initial Coin Offering (ICO)

Initial Coin Offering or ICO is an event where new CrytpoCurrencies sell in advance tokens from its coinbase to gain capital. It is usually used by developers of a new CryptoCurrency to get some startup capital to develop and then release their new CryptoCurrency.

 

Ledger

Ledger is a record store that accepts only new records ie you can add new records, but once the record is there is will stay there. The Information in a Ledger is a bit more General than Financial records.

 

Litecoin

Litecoin is a peer-to-peer CryptoCurrency that is based on Scrypt proof-of-work Network. Sometimes called silver Bitcoin.

 

Mining

Mining is a process where transactions are verified and then added to the BlockChain. The process of transaction verification is process of solving cryptographic problems using computer hardware. The side product of this process is the release of specific CryptoCurrency.

 

Multi Signature

Multi Signature or Multisig addresses allow different parties to require more than 1 key to authorise a transaction. The exact number of required keys is agreed upon the address creation. Multi Signature Addresses are more secure towards thefts.

 

Off-Ledger Currency

Off-Ledger Currency is a currency that is Minted off-ledger ie National Currency (USD, EUR etc) and used on-ledger.

 

On-Ledger Currency

On-Ledger Currency is a currency that is Minted on-ledger ie CryptoCurrencies (BTC, LTC, ETH etc) and used also on-ledger.

 

P2P

peer to peer or p2p interactions are decentralised interactions that happen between two or more parties in a highly interconnected network. P2p participants deal with each other directly through a single mediation point.

 

Participant

Participant is a Person who can access the ledger to read records and add new records to the ledger.

 

Peer

Peer is a Person who shares the responsibility of maintaining the identity and integrity of a ledger.

 

Permissioned Ledger

Permissioned Ledger is a ledger where participants must have permission to access the ledger. Permissioned Ledgers may have many owners. In a process of adding a new record to the ledger the integrity of that ledger is checked by a limited consensus process. This is done by trusted participants – government departments or banks. In such cases the maintaining of a shared record is easier than the consensus process used with unpermissioned ledgers. Permissioned BlockChains provide datasets that are easily verified, because digital signatures are used during consensus process. These signatures can be seen by all parties. Usually permissioned ledger is faster than unpermissioned ledger.

 

Private Currency

Private Currency is a currency issued by a private individual or company.

 

Private Key

Private key is a data string that shows you have access to a specific wallet or CryptoCurrencies. Private key is like key to a lock or a password. You should never share you Private Key or reveal it to anyone else. This Key allows you to spend your CryptoCurrencies from your wallet by using a cryptographic signature.

 

Proof-of-Stake

Proof-of-stake is an alternative to the proof-of.work system. In proof-of-stake system your existing stake in a CryptoCurrency (amount of that type of CryptoCurrency you have) is used to calculate the amount of that specific currency you can mine. This means the more you have that specific CryptoCurrency, the more you can mine it.

 

Proof-of-Work

Proof-of-work system is a system where mining capability relates to computing power. Blocks in proof-of-work system need to be hashed (or verified). Although the hashing itself is rather simple process, an additional variable is added. This makes the process more difficult. After some time and computing effort the block is successfully hashed. This hashed block is considered as proof of work done.

 

Ripple

Ripple is a payment network built on distributed ledgers. The Ripple payment network allows the transfer of any currency. The Ripple network consists of payment nodes and gateways operated by authorities. The payments are done using series of IOU’s (document that acknowledges a dept owned). The whole network is based on trust relationships.

 

Replicated Ledger

Replicated Ledger is a ledger with one master copy of the data the ledger holds and many slave copies.

 

Scrypt

Scrypt is an alternative to SHA-256 proof-of-work system. It is designed to be more easier to use to CPU and GPU miners. At the same time it offers not that much advantage to ASIC miners.

 

SHA 256

SHA-256 is the cryptographic function used in Bitcoin proof-of-work system.

 

Smart Contracts

Smart Contracts are contracts where the contract terms are not kept in legal language but instead in computer language. Computer Systems such as suitable distributed ledger systems can execute Smart Contracts automatically.

 

Tokenless Ledger

Tokenless Ledger is is a distributed ledger that does not require native currency.

 

Transaction Block

Transaction Block is a collection of transactions in a block that can be hashed and then added to the Chain to make it part of a BlockChain.

 

Transaction Fee

Transaction fee is a fee that is taken for transactions sent around in CryptoCurrency Network. Transaction Fee is given as an award to a miner that successfully hashes the block that contains the relevant transaction.

 

Unpermissioned ledgers

Unpermissioned ledger is a ledger that does not have single owner. These ledgers cannot be owned. The main reason to have unpermissioned ledgers is to allow anyone to add data to the ledger. Everyone that are in possession of that ledger have identical copies. This is a defence against censorship. In short it means there is no single person that can prevent a transaction to be added to the ledger. Participants of this ledger maintain the integrity by reaching a consensus about the state of the ledger.

 

 

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