Blockchain Glossary: 100+ Cryptocurrency and Blockchain Industry Terms
Abdulaziz AlYaqout
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Also known as a “Majority Attack” a 51% attack is an attack on a cryptocurrency network with the intent to double spend coins. If successful, the attacker would be able to recover their coins after a transaction has already been made. In order to work, the attack must control a large amount of the network’s hashrate. If the attacker controls greater than 50% of the hashrate, then the attack has a 100% chance of being successful.
This type of fork happens as a result of two or more miners finding a block at essentially the same time. Since two blocks cannot exist in the same place on the same chain, an error occurs that can only be resolved when new blocks are added. The side of the fork that gets longer as a result of having new blocks added to it wins and the other side of the fork is abandoned.
An address on a blockchain is a unique identifying number that payments can be sent to.
A set of rules that are held in a publically accessible ledger and govern how people can participate with and contribute to a blockchain network. While they have no contractual obligation, you must voluntarily agree to the terms in order to use the network and can have your access revoked if you violate them.
A term used to describe an “Alternate Coin” or a cryptocurrency that is not related to Bitcoin. Bitcoin was the first successful cryptocurrency, the largest, and also one of the most stable. That being said, it is not perfect and there is much room for improvement.
An accounting record of business transactions related to a singular account.
A technology built on smart contracts that allow for the trade of cryptocurrencies and digital commodities to take place peer-to-peer outside of exchanges.
Application-Specific Integrated Circuit (ASIC) is specially designed, and expensive, computing hardware that is optimized for a singular purpose. Bitcoin can be mined much more efficiently using ASIC hardware designed for the purpose, but this gives miners who can afford it an unfair advantage. It is one of the main issues that Ethereum solves by basing mining on more accessible GPU technology.
A physical Kiosk where you can exchange Bitcoin, or other cryptocurrencies, and cash. Many times they carry high transaction fees and should not be used without understanding transaction specific.
When the “B” in Bitcoin is uppercase it is referring to the protocol and payment network.
When the “b” in bitcoin is lowercase it is referring to the currency itself.
The type of network protocol that allows for a list of records call “blocks” to be created and validated using cryptography.
A web browser that is connected to the blockchain instead of the internet which allows anyone to track the interactions made by network users in real time.
This is a measurement of the number of blocks that have come before any given block with the first block having a height of “0”.
The amount of cryptocurrency that a miner receives for finding new blocks. The actual mechanisms that determine how much of a block reward a miner is eligible for differs between blockchain networks.
Also known as a “general ledger” it is a centralized record of all account transactions of a given business entity. In the context of blockchain networks, this is the ledger that is constantly being copied, updated, and distributed.
The software that individuals use to interact with a blockchain network. A client allows users to generate private keys and security information as well as facilitate transactions.
A business model where a central data center sells access to its mining hardware for fiat currency. The way it usually works is temporary access to a given amount of hardware is sold for a flat fee. The miner purchasing the hardware gets the cryptocurrency that the hardware produces for the duration of the contract.
The act of keeping amounts of a cryptocurrency offline in a secured wallet. People keep cold wallets to prevent hacking and save crypto for the future. The only issue is that if these wallets are lost or destroyed, there is no way to get the currency back into the market.
The process of making sure that a transaction is valid. After a transaction is broadcast to the network it is added to a block in the chain and the confirmed in each new block that is created. The more blocks that are added, the greater the chance that the transaction is valid.
The process and method utilized by a given blockchain to agree that transactions made on the network are valid.
This is another term for a permissioned blockchain. Consortium blockchains are not public, they are semi-decentralized and regulated networks that only certain parties have access to.
The digital currency that is created through the given mining process on a blockchain network. It functions much like traditional fiat currency and can be used to purchase goods and services.
A term describing the means of securing and validating transactions that take place on blockchains. The mathematics associated with cryptography is where a good deal of the “trust” in a given network comes from.
A term used to describe attacks designed to take over a target computer and use its processing power to mine cryptocurrency.
Decentralized Autonomous Organization (DAO)
An organization that publishes its SOPs and rules to the blockchain through smart contracts. It is controlled by shareholders and regulated by the blockchain. All transactions made by the organizations are transparent and it is not influenced by central governance.
The process of spreading a database across many different pieces of hardware that all have to reach conscience in order to make changes to it.
Decentralized Application (DApp)
These can be described as the front-end applications that allow users to interact with one or more smart contracts on a blockchain network.
These are digitized products that can be exchanged for other commodities both digital and non-digital, based solely on their perceived value.
The information on a blockchain network used to represent an individual actor on the network. Many times these come in the forms of private keys or addresses.
The verifiable digital affirmation that a transaction took place by two or more parties. It is one of the necessary elements required to add a transaction to a new block.
Another term used to describe the blockchain. It is the direct opposite to a centralized ledger that is stored in a single location. A distributed ledger is spread across sometimes thousands of different locations that must all reach consensus before a new record can be added.
In a Proof-of-Work model like Bitcoin, “difficulty” refers to how much time and computing resources it will take to find a new block at any given time.
The double spend problem is one central issues with all cryptocurrency. Since transactions are digital, if one party had enough computing resources they could essential broadcast that a transaction they made was invalid after they made it and have to money returned to their account.
A technical standard used by developers working with smart contracts on the Ethereum network to help the system accurately predict interactions between tokens. ERC20 is one of the oldest token standards on the network and is very popular for new ICOs. Each token in a ERC20 compliant ICO is identical. Critical bugs exist in this token standard that has led to the loss of millions of tokens.
A token standard created by Reddit user u/Dexaran. In ERC223, token transactions behave exactly like ether transactions and many of the bugs associated with the ERC20 standard have been resolved.
Unlink ERC20, each token in the ERC721 standard is unique. This leads to completely unique tokens that can be used as collectible assets.
The native cryptocurrency on the Ethereum blockchain.
The second largest blockchain in the world and one of the fastest growing as well. Ethereum is a blockchain platform that allows third-party developers to build Dapps and smart contracts on the shared Ethereum blockchain.
EVM (Ethereum Virtual Machine)
A runtime environment for smart contracts based in Ethereum. It can be used to test how new smart contracts will behave on the Ethereum network without actually making them live.
A business designed to allow users to exchange certain types of cryptocurrencies and digital commodities with other users.
This is a traditional currency that is backed by banks and federal governments. The US dollar, for example, is a fiat currency.
When a blockchain splits into two or more separate chains.
Is a transaction fee on the Ethereum network.
The very first block created on a blockchain and the one that all other blocks will be built upon.
The fixed length hexadecimal number that you get when you correctly solve a block. Finding the correct hash awards miners coins.
This is a term that specifically refers to the Bitcoin blockchain. Every 210,000 blocks that are created the reward for creating a block is dropped by half.
This happens when there is a server change in a blockchain that takes place creating two separate blockchain networks.
A password protected and encrypted physical storage device for cryptocurrency. Your digital currency is separated from the network physically until you want to use it.
For hardware, it is used to measure how well a particular miner preforms usually represented in hashes per second or h/s. It can also be used a measure of the network's overall performance.
A cryptocurrency wallet that is networked with the blockchain.
Started by the Linux Foundation in 2015, Hyperledger is an open source blockchain and tool development project. It unites large companies like IBM and Intel so they can both work on developing blockchain technology.
When used in the blockchain world, immutability means that the record cannot be changed under any circumstances.
This is the funding round that takes place when a new cryptocurrency goes online. A set amount of coins are brought into the market to raise funds.
Like an ICO, but for tokens which can be shares of a company, or just about anything.
A fork that is made as a result of a code change or to fix something wrong with the code. These are planned and calculated.
InterPlanetary File System (IPFS)
An open-source and peer-to-peer distributed file system protocol that promises to change the way the internet works. Instead of centralizing data like the http protocol, IPFS seeks to spread the files of the network across all network connected devices.
An account record that shows what transactions were made, when they were made, and who made them.
A payment protocol that operates on top of a blockchain like Bitcoin. The Lightning network was originally created to help increase the speed of transactions on blockchains and has proven successful in doing so.
“Lightweight Nodes” don’t download the full version of the blockchain saving space. They are served by full nodes and completely rely on them to operate. While they are easier to run, they have with validation, privacy, and security.
For cryptocurrency, liquidity is the ease that coins can be converted into fiat currencies. When the coin market is liquid then trade is easy, but it not always the case. Major cryptocurrencies like Bitcoin have seen periods of “illiquidity” when it became difficult to exchange the currency for cash.
A technically similar coin to Bitcoin, Litecoin came online in 2013 as a way to improve some of the issues related to transaction times associated with Bitcoin. It is now in the top five largest market cap cryptocurrencies in the world.
This is the total value of a cryptocurrency represented in fiat currency. It can be used as a measure of a single cryptocurrency, or of the market as a whole.
Also known as a “hash tree”, it is the method used to validate large amounts of secured data. They help make sure the data blocks, both sent and received, remain intact and unchanged.
This is the process of searching for new blocks on a blockchain network that is usually rewarded with a payout of cryptocurrency.
A digital signature configuration that allows multiple users to sign a single document. In cryptocurrency, it is used an extra layer of security before funds are released from escrow.
A node on a blockchain network that carries a full copy of the blockchain and can work to validate with full features.
Unlike cryptocurrencies which are fungible by nature, each NFT is totally unique. Applications can be seen in online gaming and gambling.
This is cryptocurrency that is kept in a “cold wallet” offline from the network.
On-Ledger Currency
This is cryptocurrency that is currently available for use on the network.
A way to provide a smart contract with “off-chain information” about events that relate to its operation. Oracles are the only way that smart contracts can interact with data outside of the blockchain.
An abbreviation of “peer-to-peer”, a P2P network connects user computer nodes to each other instead of a central client server.
A person, or entity that is actively contributing to a blockchain network. There are different types of participants in a blockchain that usually fall under one of three categories: Asset issuers, Account Managers, and Blockchain Observers.
This is another term used to describe the ledgers on a private blockchain. Unlike a public ledger, a permissioned ledger is only accessible to users who are permitted on the network.
A cryptocurrency that allows both Proof-of-Stake and Proof-of-Work mining to occur on the network. The benefit of this system is that it allows a greater number of users to participate in the consensus process.
This is a blockchain that is only accessible to certain users. In order to participate in a private blockchain, you need to meet the requirements set by the network.
Historically, a private currency is money created, regulated, and distributed by a private entity like a business. Unlike a fiat currency that is created by a bank or central government. Most cryptocurrencies in circulation today qualify as private currencies.
The secret key that a user possesses that matches their public key and allows them to make a transaction on a blockchain. Private/public key cryptography is what makes identification possible on blockchain networks.
An identity-based model on a blockchain where miners “earn” the right to validate transactions and need to maintain a high level of integrity to keep their position. Once a miner has earned the right to mine, the computer they control become an “authority node” and they can start validating transaction on the network.
A method of choosing which node in a blockchain network gets the right to mine the next block. The method works by checking for certain verifiable criteria that different nodes possess “stake” and choosing which one should validate the next block.
An energy intensive method of mining on a blockchain that requires nodes to search for hash numbers to in order to mine the next block. This method helps secure the network but requires a large amount of computing power to operate. Bitcoin operates on a PoW system.
In a blockchain, a protocol is a digital rulebook that defines the parameters of the how the network operates. A protocol is written in code and made available to everyone who participates on the network.
A concept related to gambling where you can prove that a game is fair. The blockchain makes the process of proving that a game is fair publicly verifiable.
A blockchain that can be used by anyone. Anyone can create an account and use a public blockchain. For cryptocurrencies, this is a big deal because people do not necessarily need a bank account or ID card to use send and receive payments.
The public portion of a cryptographic key that must be matched with an account’s private key in order to make a transaction. The combination of the public and private keys are used as an airtight digital signature on a transaction.
Is a blockchain (distributed ledger) network that has been widely adopted by the banking world. Ripple uses a native cryptocurrency know as XRP and has many advantages over Bitcoin when it comes to banks and financial institutions.
Another term used to describe a distributed ledger.
A cryptographic method of validating a transaction where each member of a group has a different key that must all agree in order for the transaction to occur.
The smallest unit of Bitcoin (0.00000001 BTC). Named after the mysterious creator of Bitcoin Satoshi Nakamoto.
The creator of Bitcoin. While his true identity is unknown, in 2008 a white paper was published describing Bitcoin. In 2009 he released the first working version of the software and the rest is history.
The ability of a blockchain to become larger without losing functionality. Many blockchain networks, including Bitcoin and Ethereum, have experienced growing pains as they get bigger. Solving scalability issues with the technology is a major point of research and development that is constantly being worked on.
A list of digital instructions that layout the parameters necessary to complete transactions on a given blockchain network.
The type of cryptographic hash function used by Bitcoin to validate data on the network.
Another blockchain ledger that is based off and runs parallel to another blockchain. While it is independent of the primary chain, entries from the side chain can be connected to those from the primary chain.
A contractual agreement is written in code, and published on the blockchain. Smart contracts can be used to power Dapps and have a very robust list of applications both on and off the blockchain network.
When new validation rules are introduced to a blockchain it creates something called a “soft fork”. While they are backward compatible, old nodes that are still mining will not recognize the new rules and can create invalid chains.
The most popular high-level programming language used to program smart contracts on the Ethereum blockchain. Other examples of smart contract languages exist like Vyper, though they are not nearly as widely adopted as Solidity.
SPV (Simplified Payment Verification) client
In Bitcoin, an SPV is a way to of validating transactions without running a full node.
A class of cryptocurrencies designed to maximize price stability. Usually, these coins are linked to fiat currencies or other commodities to make sure their price stays the same.
A transaction channel opened up between two or more participates, usually off-chain, where transactions can take place. After a given time period, the transactions are posted to the blockchain to be validated.
Asset-backed funds that are made available for investing through tokens on a blockchain network. Swarm funds make these types of high return investment options accessible by small individual investors.
This is a test environment for the Bitcoin blockchain used for testing by developers.
Unlike an altcoin which represents currency, a token can be anything from a stake in a company to a collectible. They also reside on their own separate blockchains.
This is a blockchain that does not require a cryptocurrency to operate.
A group of recorded transactions that form a new block in the blockchain.
A fee given to miners on certain networks for processing a transaction.
A programming language or protocol that is mathematically universal. It allows for all standard mathematical functions to take place.
Also known as “public ledgers”, unpermissioned ledgers are owned by no one party and are distributed across many devices.
The place where you store public and private keys so you can send and receive cryptocurrency. They come in many different varieties, both digital and physical with differing levels of security.
A messaging protocol built on the Ethereum network that allows for secure and anonymous cryptographic messaging between users. It has powerful implications for the future because it make secure and non-tamperable communications available to everyone with an internet connection.
The documentation of what a project is and the problems it intends to solve before it goes for its Initial Coin Offering (ICO).
The native cryptocurrency on the Ripple blockchain. At the time of writing it was the 3rd largest cryptocurrency by market cap.
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