Blockchain Terminology You Need To Know

Blockchain Terminology

The rise of cryptocurrencies has elicited mixed feelings among market participants. On one hand, some respected investors like Warren Buffet have called these currencies a bubble while others like Mike Novogratz have expressed optimism. Others like Virginia Rometty have expressed concerns about the price of the currencies and optimism for the blockchain technology.

At Contentworks, an agency specialising in content for the finance and fintech sector, we know how important blockchain will be. We also know that it’s important to use the correct terminology.

In this article, we will look at the top blockchain terms you need to know.

  1. Blockchain – A distributed ledger made of unchangeable, digitally recorded data packages known as blocks. Each block is then chained to the next block using a cryptographic signature. This is the technology behind all cryptocurrencies.

 

  1. Ledger – This is an append-only record store where records are immutable. It may also hold more general information than financial records.

 

  1. Bitcoin – This is the best-known product of the blockchain technology. It is a digital currency, which can be traded, spent or saved. There are thousands of currencies which you can find here.

 

  1. Addresses – These are addresses used to send and receive transactions in the blockchain network. It can either be in the form of QR code or alphanumeric characters.

 

  1. Agreement Ledgers – These are ledgers which are distributed electronically by two or more parties when negotiating a deal.

 

  1. Block Rewards – When a bitcoin miner successfully hashed a transaction block, they are awarded block rewards. These rewards can either be transaction fees or coins depending on the cryptocurrency.

 

  1. Block Height – This is the height of all blocks that are connected to form a block chain.

 

  1. Application Specific Integrated Circuit – This is commonly known through its acronym, ASIC which are silicon chips designed to do a certain task. For example, for bitcoin, they are designed to process a SHA-256 hashing problems and in return produce new bitcoins.

 

  1. Mining – This is the process of producing new cryptocurrencies by solving cryptographic problems. Miners use computing hardware like the Kodak’s KashMiner.

 

  1. Block Ciphers – This is one of the methods of producing ciphertext by encrypting text. In this, a cryptographic key and algorithm are applied to a block of data at once or as a group.

 

  1. Attestation Ledgers – These are distributed ledgers that are used to produce a durable record of agreements and commitments to provide evidence that the agreements were made.

 

  1. Chain Linking – This is the process of linking two blockchains with each other to allow transactions between chains to happen.

 

  1. Cipher – This is an algorithm which is used for the encryption and/or decryption of information.

 

  1. Confirmation – This happens during mining, when a network verifies a transaction. When this happens, the transaction cannot be reversed.

 

  1. Consensus Process – This is a group of peers, often large miners, who are responsible for maintaining the distributed ledger and reach consensus on ledger contents.

 

  1. Cryptoanalysis – This is a study on methods of getting the meaning of the encrypted information without having the decryption code.

 

  1. Cryptocurrency – This is the best-known blockchain product.. It is a form of digital currency that is produced through encryption techniques which are used to regulate and verify the transfer of funds. Examples of cryptocurrencies are bitcoin, ethereum, and ripple.

 

  1. Cryptography – This is the process of encrypting and decrypting information.

 

  1. dApp – This is a decentralized and open source application. As a condition, it must operate autonomously with no controlling its tokens.

 

  1. Initial Coin Offering (ICO) – Through ICOs, developers raise money by offering tokens to investors without following the long, complicated, and expensive IPO process.

Half way their to becoming more aware of BlockChain

  1. Decentralized Autonomous Organization – This is commonly known as DAO. It is a decentralized organization run by no human involvement.

 

  1. Encryption – This is the process of changing a text message also known as plaintext into a data stream known as cipher-text. The cipher-text looks like a meaningless and random sequence of bits.

 

  1. Decryption – This is the process of converting cypher-text into plaintext.

 

  1. Digital Identity – This online or networked identity has been claimed or adopted by entities. These entities can include individuals, organizations, or electronic devices.

 

  1. Double Spend – This is when people try to game the system by sending a bitcoin transaction to two different recipients at the same time.

 

  1. Fork – This is the continuous process of creating an alternative version of the blockchain. It is done by creating two blocks on different parts of the network at the same time.

 

  1. Halving – There is a finite supply of bitcoins. The total number of bitcoins that will ever be issued will be 21 million. Every 4 years, the number of bitcoins generated per block is reduced by 50% in a process called halving. The final halving is expected to take place in 2140.

 

  1. Hashrate – This is the number of hashes that mining hardware can solve in a given period of time. The hash rate is usually calculated in seconds.

 

  1. Multi-signature (multisig) – In the blockchain world, this is a very common term. This is an address that allow multiple parties to require more than one key to accept or authorize a transaction. They are helpful in preventing theft.

 

  1. Node – This is a computer that can connect to the bitcoin network.

 

  1. Private Key – In the blockchain world, a private key is a password that protects your wallet. The private key should never be shared with anyone.

 

  1. Wallet – This operates like a normal wallet. When you buy or mine bitcoins, you store them in a wallet and protect them using a private key.

 

  1. Transaction Block – This is a collection of transactions found in the blockchain network. They are gathered into a block that can then be added to the blockchain.

 

  1. Token – Tokens are popular during the ICO. When you buy a token during ICO, you can sell it to other people when the trading starts. Think of it as a stock.

 

  1. Softfork – This is the opposite of hardfork. It is a change to the bitcoin protocol where the previously valid blocks or transactions are made invalid.

 

  1. Tokenless Ledger – This is a distributed ledger which does not require a native currency to operate.

 

  1. Smart Contracts – These are contracts which are recorded using computer generated language instead of straight English.

 

  1. Long – This is the when you buy a cryptocurrency with the hopes that its price will go higher.

 

  1. Short – This is the opposite of going long. You short a cryptocurrency when you believe its price will go down.

Contentworks can provide your Blockchain brand or ICO with a complete content marketing strategy including blogging, PR, pitch decks, videos and website content. Talk to the Contentworks team today.

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