By
Dimitar Bogdanov
January 18, 2019
4 Min Read
Just as most new technologies, the terminology behind blockchain and crypto is constantly evolving, with new phrases being coined (almost) as we speak. So we’ve put together a glossary of terms that will give you a better understanding of the language of blockchain.
*The article is work in progress, so drop us a line if you think something is missing.
Address
А representation of alphanumeric characters which allows you to send or receive transactions on the blockchain network.
Altcoins
Any digital cryptocurrency that is not Bitcoin. The term stands for “alternative to Bitcoin”.
Backward-compatible change
A change in the blockchain network which is compatible with the code that has already been written.
Bitcoin
Тhe first digital currency that runs on a global peer to peer network. without the need of a centralized institution.
Blockchain
A ledger that can be shared across a network where all transactions are recorded and consequently. The blockchain itself operates as a historical record of all the transactions that have occurred – from the first to the most current one.
Consensus
An agreement, where all participants of the network consent on the validity of the transactions, ensuring that the ledgers are exact copies of each other.
DLT (Distributed ledger technology)
A digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administration functionality. Blockchain is just one type of DLT.
Dapp (Decentralized Application)
An application that has its backend code running on a decentralized peer-to-peer network.
Decentralized Network
A network that has no central authority and can operate with freely running nodes alone (peer-to-peer, or P2P). Ethereum is one example for a decentralized network.
DAO (Decentralized Autonomous Organization)
An entity in a digital system facilitated by smart contracts meaning the organization is represented by rules encoded as a computer program that is transparent, controlled by shareholders and has no central government.
Ethereum
Decentralized platform for applications which runs smart contracts.
Fork
A change to the way a blockchain’s software rules define valid transactions or blocks.
Hard fork
A change to the rules that all nodes on a network have agreed to which can result in the creation of a new currency. An example of that was the hard fork of Bitcoin that resulted in Bitcoin Cash.
Soft fork
A backward-compatible change.
Fiat money
Currencies that have been established as money by government regulation (USD, GBP, etc.)
Gas
The internal price that is paid for running a transaction or a smart contract on the Ethereum blockchain.
Hash
An algorithm that converts letters (words) into an encrypted result with a fixed length. The hash is essential to the blockchain.
Initial coin offering (ICO)
Fundraising technique based on the blockchain in which entrepreneurs mint new crypto-tokens and sell them to investors.
Ledger Wallet
Multi-currency wallet that is used to store private keys for cryptocurrencies offline. Right now there are two types of wallets: hardware wallets, which resemble a flash drive; and software wallets, which can be downloaded to your computer.
Mining
The act of validating blockchain transactions during which the miners (people who perform the validation) receive an incentive in the form of coins.
Node
A computer on the network which creates a copy of the blockchain ledger. Spreading the nodes around the network makes it stay in a decentralized form.
Private Key
String of data that permits you to access the tokens in a specific wallet. They serve as passwords and should be kept hidden from anyone but the owner of the address.
Public Address
The hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
POW (Proof of Work)
A consensus algorithm which confirms transactions and produces new blocks to the blockchain. With it, miners compete against each other in order to get rewarded for transactions made on the network.
POS (Proof of stake)
A type of algorithm by which a cryptocurrency network aims to achieve distributed consensus. In PoS-based cryptocurrencies, the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e., the stake).
Smart contract
А computer code running on top of a blockchain. The code contains a certain set of rules under which the parties to that smart contract are agreeing to. The agreement is implemented automatically when all of the rules are met.
Solidity
A programming language designed for writing smart contracts and implementing them on various blockchain platforms.
Token
A representation of digital assets.
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