Term

Definition

ASCII-8

American Standard Code for Information Interchange (ASCII) is a character encoding standard for electronic communication. ASCII-8 has a bit width of 8 bit.

ASIC

An application-specific integrated circuit (ASIC) is a piece of hardware specifically designed for a particular use.

Bitcoin (BTC)

Bitcoin (BTC) is the cryptocurrency of the Bitcoin blockchain. A Bitcoin is a token with a value derived from its use a for payment and wealth storage.

Blockchain

A blockchain is a database replicated on many servers or computers owned or governed by independent legal entities.

Block time

The average time is takes for new blocks (of transactions) to be added to the blockchain.

Chaincode

Smart contract in Hyperledger is called ‘chaincode’.

Consensus protocol

A mechanism to decide which block of all the blocks mined is finally added to the blockchain.

CPU

Central processing unit (CPU), alternatively known as the processor. It carries out the instruction of computer programs by performing the basic arithmetic, logical, control, and input/output (I/O) operations specified by the instructions.

Cryptocurrency

A cryptocurrency (or crypto-currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.

Cryptography

Cryptography is associated with the process of converting ordinary plain text into unintelligible text and vice versa. It is a method of storing and transmitting data in a particular form, so that only those for whom it is intended can read and process it. Cryptography not only protects data from theft or alteration, it can also be used for user authentication.

DAO Decentralised autonomous organisations

DAOs consist of multiple smart contracts, which are combined with a governance mechanism and interact with each other without (or with minimum) human intervention.

dApps Decentralised applications

A decentralised application or dApp is an application of a blockchain. More precisely, the backend code runs on a blockchain, while the frontend and user interface of the application can be written in any programming language.

Digital signature

A digital signature uses the private key to sign data, after which the corresponding public key of the signer can be used to verify that the signature is valid.

DVP Delivery vs payment

Delivery versus payment is a settlement procedure where the payment for a security is due at the time of delivery.

Ether (ETH)

Ether (ETH) is the cryptocurrency of the Ethereum platform.

Ethereum

Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality.

EVM

The Ethereum virtual machine (C38EVM) is responsible for code execution on the Ethereum network.

Smart contracts are run by the EVM.

Fiat money/currency

Fiat money is a currency that a government has declared to be legal tender. Fiat money has no intrinsic value. Instead, its value depends on supply and demand of the currency.

Full nodes

see Miners

GPU

Graphics processing unit (GPU) is also known as the graphics card. It is designed to rapidly manipulate and alter memory to accelerate the creation of images to output to a display.

Hard fork

A hard fork is a radical way to update a blockchain protocol. It involves splitting the path of a blockchain by invalidating transactions confirmed by nodes that have not been updated to the new version of the protocol. This essentially creates two chains: one running the new protocol and one running the old protocol version.

Hash (value)

The output of a hash function is the hash value.

Hash Function

A hash function is an algorithm that converts data of any size into a fix length data string. As a one-way function, the output of the function does not indicate what the input was.

Hashing power

The hashing power is the computational power of a miner or mining pool. It represents the speed at which the cryptographic puzzle could be solved at a given difficulty level.

Hexadecimal system

Hexadecimal system or hex uses 16 symbols (numbers 0–9 and characters a-f). As each hexadecimal digit represents four binary digits (bits), it allows a more human-friendly representation of binary-coded values. One hexadecimal digit represents 4 bits, which is half of a byte (8 bits). For example, a single byte can have values ranging from 00000000 to 11111111 in binary form, but this may be more conveniently represented as 00 to FF in hexadecimal.

ICO

An initial coin offering (ICO) is a means of crowdfunding centred around cryptocurrency, which can be a source of capital for start-up companies. In an ICO, some quantity of the crowdfunded cryptocurrency is preallocated to investors in the form of ‘tokens’, in exchange for legal tender or other cryptocurrencies, such as Bitcoin or Ethereum. These tokens become functional units of currency if or when the ICO’s funding goal is met, and the project launches.

IoT Internet of things

The Internet of Things is a network of physical objects (locks, vehicles, microwaves, and light bulbs) that use sensors and software to connect and exchange data over the Internet.

IPO

In an initial public offering (IPO), a private company raises investment capital by offering its stock to the public for the first time.

Merkle Tree

A Merkle or hash tree is a data structure that allows for the efficient and securing verification of large data structures. The data are divided into pairs and hashed. The resulting hash values are again paired and hashed together. This step is repeated until only a single hash remains representing the Merkle root or root hash.

Miners

Miners are nodes that validate transactions of a blockchain. They are paid for providing the computational power with transaction fees and mining rewards.

Mining pool

A mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block.

Mining reward

Miners are rewarded for participating in the consensus protocol for adding blocks to the blockchain. In proofof-work, the miner that solves the cryptographic puzzle first is given a reward and the transaction fees of all transaction included in his block.

Multisig/ multisignature (accounts)

Multisig or multisignature accounts require more than one private key to make a transaction. To allow for majorities, at least three private keys should be included in a multisignature account.

Node

Nodes are computers in a network that store a copy of a database and a set of rules (consensus protocol) that define the order in which nodes may take turns adding new changes to the database.

Nonce

Nonce is a random number used in the proof-of-work consensus protocol and stands for a number used once. It is a block component that is varied in the cryptographic puzzle to find a block hash having a certain number of leading zeros.

Parallel/orphaned/ uncled block

When two miners provide a valid proof-of-work at the same time, they both create a new block for the blockchain. Subsequent blocks are then added to either one of the two blocks, and two blockchains exist for a brief time. However, as the time in which a new block is mined varies (around the average block time), after a short period the longer chain prevails and the trans-actions, which have not been incorporated into the main chain, go back into the pool of non-validated transactions.

Permissioned

Permissioned refers to blockchains that restrict participation in consensus building/validation to a set of users.

Permissionless

Permissionless refers to blockchains that allow anyone to download and run a node. It is optional to participate in the validation/mining, or they may want a current copy of the blockchain.

PGP

Pretty Good Privacy (PGP) is an encryption program that provides cryptographic privacy and authentication for data communication. PGP is used for signing, encrypting, and decrypting texts, emails, files, directories, and whole disk partitions and to increase the security of email communications.

Power of Big

Numbers/2256

An argument on why, although the uniqueness is not tested, identifiers such as the hash value are still considered to be unique due to the almost infinitesimally small probability of identical identifiers.

Private key

The private key allows the decryption of a message encrypted with the corresponding public key.

Proof-of-authority

(PoA)

Proof-of-authority is a consensus mechanism where validators stake their identity and attached good reputation.

Proof-of-stake (PoS)

Proof-of-stake is a consensus protocol based on validators staking an amount of their wealth as collateral for the right to validate blocks of transactions. The probability they are assigned a block to validate is proportional to the size of their stake.

Proof-of-work (PoW)

Proof-or-work is a piece of data which is costly to produce but easy for others to verify and satisfies certain requirements. It is also a type of consensus protocol based on showing you have successfully produced a proof of work.

Public key

The public key allows encrypting messages that only owners of the corresponding private key can decrypt. The owner can publish the public key, and anyone can send messages only the owner can decrypt. The public key thereby functions as the public address of its owner.

Root hash

The root hash or Merkle root is the result of a hash/ Merkle tree.

Scalability

Scalability refers to the ability of a blockchain to handle increased amounts of transactions.

Smart contracts

Smart contracts are self-executing contracts where the terms of the agreement between the contract parties are directly written in lines of code.

Smart lock

A smart lock is an electromechanical lock designed to perform locking and unlocking operations on a door

when it receives such instructions from an authorised device using a wireless protocol and a cryptographic key to execute the authorisation process.

Soft fork

A soft fork is a way to update a blockchain protocol without creating a splitting of the network between nodes and clients that have updated their systems and those who have not. This means updated and noneupdated nodes can still communicate.

Solidity

Solidity is a contract-oriented, high-level programming language for implementing smart contracts.

SSH

Secure Shell (SSH) is a cryptographic network protocol for operating network services securely over an unsecured network. SSH provides a secure channel over an unsecured network in a client-server architecture by connecting an SSH client application with an SSH server. Common applications include remote command-line login and remote command execution, but any network service can be secured with SSH

Sybil attacks

The Sybil attack in computer security is an attack wherein a reputation system is subverted by forging identities in peer-to-peer networks.

Token

A token is an object that represents something else. Cryptocurrency tokens are entries on the blockchain that can be reassigned to a new owner using a private key. Two main types of tokens can be differentiated into native tokens and asset-backed tokens. Native tokens have some value due to the utility they provide. Bitcoin on the Bitcoin blockchain and Ether on Ethereum are two examples of native tokens. Asset-backed tokens are claims on an underlying asset from a specific issuer.

Tokenisation

The process of linking an asset with a token on the blockchain.

Transaction fees

Transaction fees are the price of a transaction on the blockchain. This price can fluctuate depending on the demand for transactions given a fixed supply.

Validation

Validation is the process of checking whether the transactions sent are correct. The miner validating the transaction will check whether the sender has enough funds to execute the transaction.

Wallet

A cryptocurrency wallet is a software that stores the private keys that show the ownership of a public key representing a certain amount of cryptocurrency.

UTXO

UTXO or unspent transaction outputs are a concept used by Bitcoin to keep balances on the blockchain. Rather than using accounts, Bitcoin requires the user to have UTXO to make transactions. New UTXOs are created as the output of a transaction, and the same amount of UTXO used as input in the transaction (spent) are removed from the Bitcoin network.