A Distributed Ledger
The transaction ledger, whose original does not belong to a single center as in the case of Facebook, Google, and other centralized organizations, but is stored on the computers of many network users.
A Majority Attack a.k.a. Attack 51%
Intentionally caused damage to the blockchain by a group of people with more than 50% of all computing power.Hypothetically, one miner can own half the network’s computing powers. He can start mining faster than others. In this case, he can, for example, make large purchases on the blockchain, while creating a private alternative chain without the transactions he conducted. After several blocks, the miner will deliver his version of the blockchain to the network, which will have to accept it.
Application-specific integrated circuit specially designed to perform a specific task, in this case for mining, which it does much more efficiently than GPU or FPGA. The main disadvantage of this equipment is its unsuitability for other tasks, which seriously increases the risk of losing money.
A string that is a unique "index" of each network user, which allows to make transactions.
Any cryptocurrency except Bitcoin (alternative coin).
Bitcoin Improvement Proposal. Network update proposal initiated by community members. To implement new software, the approval of the network members is required.
The first decentralized cryptocurrency based on open-source code that operates using p2p protocol.
A data set that is a part of the blockchain.
A tool for working with transactions, including searching, selecting, filtering, and other operations that can be conducted there. It also provides information on the total computing power of devices serving the blockchain.A simple explorer: https://blockchain.info/An advanced explorer for computer: https://tradeblock.com/
The blockchain is a network of blocks, each of which has a sequence number (the confirmed branches are called forks).
An element of the incentive system for miners. A reward is paid for each hash function found (for the Bitcoin network, it’s 12.5 BTC). However, the probability of finding a solution alone is extremely small.
Distributed immutable ledger, in which transactions are recorded in blocks. It contains all the transactions made since the launch of the chain.
Byzantine Generals Problem
A situation when several users receive instructions from the same center, knowing that there are intruders among them. The solution to the problem is to find a strategy that is most beneficial for honest participants. As for the cryptocurrency industry, the task is to create a system that can eliminate unwanted elements and operate in the usual mode.
The first transaction in the block created by the miner and containing a request for the block reward.
Open-source Bitcoin 2.0 protocol, which allows developers to create digital assets using the bitcoin blockchain’s functionality.
An indicator used for adjusting the time required to find the right decision to include a block in the ledger.
The operation that involves hashing a transaction and adding it to the block.
The decision to include a certain block in the blockchain, which can be made only after verification. There are various mechanisms of achieving consensus.
Also known as a token. A digital asset.
Cryptocurrency Cold Storage
Does not require an internet connection. This is possible when storing private keys on a piece of paper or protected physical storage. It is the recommended way to store crypto assets.
Cryptographic hash function
The function that allows to receive a unique value of a strictly defined length for any input data. The Blockchain uses the SHA-256 function.
Decentralized autonomous organization. A complex system operating based on programmed rules. It allows you to avoid the risks associated with the human factor.
A decentralized application; a set of smart contracts. The data is stored on the blockchain; tokens are used within the incentive system. The application runs offline. It is the next step in the evolution of the blockchain.
The code generated from the public key, which allows you to ensure that the addressee really wants to make a transaction.
A network, whose computing power and data are distributed among multiple nodes.
A situation when the owner of a digital wallet spends more money than he/she has on his/her account. This problem was solved by the blockchain, which made it so unique.
Ethereum virtual machine. Turing-complete (presumes the ability to use it for any computing function) virtual machine that allows you to run specialized code on it. Each blockchain node uses EVM to achieve global consensus.
Decentralized platform with its own blockchain for the implementation of smart contracts applications.
Platform for instant sale and purchase of cryptocurrency. Trading on the stock exchanges is carried out outside blockchain, which significantly speeds up the exchange process.
The branching of the main blockchain.
The first block in any blockchain, the one that starts the chain.
Hierarchically determined protocol for creating keys and translations.
A wallet compatible with HD Protocol.
A type of fork, in which the blockchain rules are changed in such a way that transactions of the previous type are no longer valid. It requires a software update by all the chain participants. It often leads to the launch of a new cryptocurrency.
The aggregate computing power of all computers in the network that support the blockchain.
A hashed “secret” that allows you to create multiple transaction outputs.
Hybrid PoS / PoW
To ensure smooth network operation, the mechanism for achieving consensus Proof of Work is used as well as an alternative Proof of Stake.
KYC (Know your customer)
The policy of business conduct, indicating the participation of only identified and verified persons. The term also applies to banking.
Solution to Bitcoin’s scaling problem. A payment channel network located outside the main blockchain (off-chain).
Locktime or nLockTime
The transactional component characterizing the earliest block in which an operation can be recorded.
Medium of Exchange (MoE)
The asset property that allows it to be used as a universal equivalent in the goods exchange.
The queue of transactions that have been verified by nodes, but still have not received confirmation or a ledger record.
The root node of the tree that contains hashes of the entire data set, which means that the hash tree is a one-way hash function.
A complete binary tree, each leaf node of which contains hashes of data blocks, and every no-leaf node contains hashes of aggregated values of child nodes. The Merkle tree is used to efficiently store transactions in the cryptocurrency blockchain.
The name for the process of finding new blocks was not chosen accidentally, because associations with gold mining are only natural. In our case, everything looks as follows: numerous computers compete with each other, trying to find a suitable hash function faster than others, which allows to save transactions in the next block. For finding a solution, a miner gets a reward of 12.5 BTC, which makes this process cost-effective.
A group of miners who work together to get more even payouts. The phenomenon occurs due to the high complexity of the network, leading to nearly zero profitability when mining alone.
It is an additional security measure. The transaction requires both the sender's key and the keys of several third parties.
Noda a.k.a. Knot
A copy of the blockchain stored by a network user.
A 32-bit field in Bitcoin network’s block, indicating the number of consecutive zeros, which a hash block added to the ledger must contain at the beginning.
Transactions processed outside the blockchain but subsequently validated in it. Allow to reduce the load on the main network.
Open Assets Protocol
Protocol-add-on of Bitcoin’s blockchain network for working with custom tokens. A modified version of Colored Coin.
Suppliers of data from the real world to the blockchain.
A block whose ancestor was not processed by a node. It cannot be included in the network, as it is contained in a shorter blockchain branch.
Usually, it is a piece of paper containing the details of your address in the form of strings with addresses, a seed phrase for restoring access to your account and a QR code.
Peer to Peer (p2p)
Peer-to-Peer network. The way to interact in decentralized systems, which eliminates the need for intermediaries.
A string of symbols that gives you access to the tokens stored on a certain wallet. It is a "password." It is strongly not recommended to send your private key to other people because its holder will have access to your funds.
It is a cryptographic public key hash. It is an analog of an email address that you can safely send to other people. For example, the Bitcoin address of Chain Media looks like this: 1KTYnstcu7C25sovsRxN6y1675XhoJQi4H. If you like what we do, you can support the project.
Transaction authentication method without disclosing the sender.]
A cryptographic algorithm used in the Bitcoin network.
SPV (Simplified Payment Verification)
Verification method for transactions included in the block, without loading it entirely. Used in light apps.
The alias of the blockchain technology and Bitcoin network creator. He has not been identified yet.
The cryptographic algorithm used in Litecoin cryptocurrency (cryptocurrency review). Require less effort than the SHA-256 used in Bitcoin.
SegWit (Segregated Witness)
Bitcoin protocol update that allows to increase network bandwidth by separating payloads and signature data. A softfork.
Allow you to indicate various “game rules” in the form of program code recorded in the blockchain. They must be executed by all participants and often without the chance to change these rules.
Unlike hardforks, it is a branch that does not require miners and validators to conduct software updates.
A programming language for creating smart contracts.
A block that has been successfully mined, but not included in the network due to recording a unit found by another miner in the ledger at the same time.
Store of value (SoV)
An asset’s property of preserving its value over time (that is why Bitcoin is often called “digital gold”).
A copy of the main blockchain, which is used for experiments by developers.
An organization specially created for the primary launch of Ethereum in 2016. It had huge success but later was hacked. That resulted in the Ethereum hardfork and the emergence of Ethereum Classic.
Transaction Processing Fee
A payment that the sender makes for faster processing of transaction in the blockchain. The higher the fee, the faster it will be recorded in the ledger. A miner also gets it.
Transaction output, TxOut
Output information containing 2 fields: the value of the transferred coins and a script using the public key to determine the conditions under which the coins can be spent.
The file that generates and contains your private keys.