Blockchain is an emerging technology that offers the possibility of re-engineering economic models and enabling the creation of markets and products that were previously unavailable or unprofitable across emerging markets.

This blog contains a comprehensive Blockchain glossary that will help you understand the main concepts well.

51% Attack

Mining pools allow miners to combine their hashing power in order to have a better chance of finding blocks more consistently to obtain a bigger percentage of the network.

If the percentage is more than 50% then it can unsettle the market which results in the bitcoin price to drop and reduces miners’ revenue. This situation refers to 51% attack.

Address

Addresses are basically ‘accounts’ where bitcoins are held. To compare this with today’s existing banking infrastructure the public address can be compared to a bank account number that is used for transactions.

ASIC

Application Specific Integrated Circuit (ASIC) is a specialist form of hardware, which is specifically designed to efficiently mine bitcoins by generating SHA-256 hashes.

Bitcoin

Bitcoin can be defined by three main attributes: a digital currency, a digital asset and a trust network.

Bitcoin was designed to be an alternative to existing financial systems, but in addition to this aspiration, it was structured to allow the transfer of ownership of anything of value, by tying the rights to an asset to a unit of the digital currency.

Block

A package of data containing multiple transactions over a given period of time is called a Block.

Blockchain

A type of distributed digital ledger to which data is recorded sequentially and permanently in ’blocks’ is known as Blockchain.

Each new block is linked to the immediately previous block with a cryptographic signature, forming a ‘chain’. This tamper-proof self-validation of the data allows transactions to be processed and recorded to the chain without recourse to a third party certification agent. The ledger is not hosted in one location or managed by a single owner, but is shared and accessed by anyone with the appropriate permissions – hence ‘distributed’.

Block Explorer

A tool to check the past or current transactionsof a block in a blockchain is called the Block Explorer. It provides useful information such as network hash rate and transaction growth.

Block Reward

In order to incentivise free market participants to provide the security for an open blockchain, they are regularly rewarded with a share of a predefined number of the blockchain’s native tokens if they provide the computing power required to validate transactions and include them in blocks. This is called the block reward.

Cryptocurrency

Cryptocurrency is a process which is encoded in software, by which computers in a network, called nodes, agree on the shared state set of data is Consensus.

Cryptographic Hash Function

A function that intakes a variable-size input and produces a fixed-size unique value output is a Cryptographic Hash Function. Example: SHA-256 algorithm.

Bitcoin

Central Ledger

Bitcoin can be defined by three main attributes: a digital currency, a digital asset and a trust network.

Consensus

A process which is encoded in software, by which computers in a network, called nodes, agree on the shared state set of data is Consensus.

Dapp

A decentralized application (Dapp) is a complete open-source, operates autonomously and with no entity controls the majority of its tokens.

Distributed Ledger

A ledger which works on many nodes and in a decentralized network is a Distributed Ledger. It is a type of database that are spread across multiple sites, countries or institutions.

Data mining

The process of solving cryptographic problems using computer hardware to add newly hashed blocks to a public blockchain is called Data mining.

Ethereum

A public blockchain system developed as an open-source project is called Ethereum. Its architecture works remotely on the Ethereum Virtual Machine.

Hash

The act of creating a digital fingerprint of the data and applying an algorithmic function to data in order to convert them into a random string of numbers and letters is called Hash.

Hyperledger

Hyperledger is an umbrella project started by the Linux Foundation which comprises various tools and systems for building open-source blockchains.

Node

A copy of the ledger operated by a participant with a blockchain network is called a node.

Oracle

A bridge from a blockchain to an external data source that allows a smart contract to complete its business by referencing timely real-world and authentic information. The platform is called Oracle.

Peer-to-peer (P2P)

P2P network refers to the decentralized interactions that happen between at least two parties in a highly interconnected network.

Permissioned ledger

A large distributed network which uses a native token with access restricted to those with specific roles is known as permissioned ledger.

Private Blockchain

A closely controlled network operated by consortia in which the data is confidential and is accessed only by trusted members is called a Private Blockchain. It does not require a token.

Private Key

An alphanumeric string kept secret by the user and designed to sign a digital communication when hashed with a public key is known as Private Key.

Proof of stake

The mechanism by which participants earn the right to add new blocks and to earn new tokens is termed as Proof of stake.

Proof of work

The mechanism by which data miners win the right to add blocks to a bitcoin-style blockchainis termed as Proof of work.

Public blockchain

A Public blockchain is a large distributed network using a native token which is open to everyone to participate and maintain.

Public key

A unique string of data that identifies a participant within the blockchain which can be shared publicly is a Public key.

Smart contracts

Custom software that executes automated events when data is written to the blockchain according to rules specified in the contract. The system of digitalisation of signing documents is known as Smart Contracts.

Token

The token is a means of exchange to give value to a transaction, typically a native cryptocurrency. Some non-currency blockchain architectures can be tokenless.

Meet Our Blockchain Experts
Sahil Gupta: Founder, CEO, Parangat Technologies

Sahil Gupta

Shrey Bharadwaj: Blockchain Expert

Shrey Bhardwaj

Pulkit Goyal: Solutions Architect

Pulkit Goyal

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