Blockchain, Cryptocurrencies, and Smart Contracts

A distributed ledger where data is stored in blocks linked together in a chronological chain.

The process of verifying and adding transactions to the blockchain in a secure and transparent manner.

A cryptographic hash function used to ensure the integrity of the blockchain by creating a unique fingerprint for each block.

A type of consensus mechanism that requires miners to solve computationally intensive problems to validate transactions. The miner who solves the problem first gets rewarded.

A type of consensus mechanism where validators are selected based on the amount of cryptocurrency they hold. They receive rewards for validating transactions.

A type of digital contract that automatically executes when certain conditions are met, eliminating the need for intermediaries.

A system that manages access to digital assets and resources based on cryptographic keys and permissions.

Decentralized finance (DeFi) refers to financial services and applications built on blockchain technology, allowing individuals to manage their finances without relying on traditional intermediaries.

The main purpose of decentralization in blockchains is to distribute control, making it impossible for a single entity to dominate. This ensures a truly peer-to-peer system, eliminating reliance on intermediaries like banks.

Decentralized blockchains are designed to be immutable, meaning that data once entered cannot be altered or deleted. Every transaction is recorded and visible to anyone, creating a transparent and verifiable history.

Not all cryptocurrencies operate on decentralized systems. Some utilize private and centralized systems where a select few control the network, limiting transparency and accessibility.

A blockchain can be fully centralized, managed solely by a single entity, semi-decentralized where multiple entities share control, or fully decentralized with no central authority managing the network.

Physical decentralization involves geographically dispersing blockchain servers across the globe to ensure network resilience against loss of physical servers. This prevents a single entity from owning the entire network.

Transactional decentralization aims to improve the efficiency and transparency of business-to-business networks. By using shared ledgers and smart contracts, it enables secure and consensus-based transaction execution, verification, and recording.

A digital currency that operates on a decentralized network without the need for a central authority or intermediaries.

A peer-to-peer network that allows users to send and receive Bitcoin directly without intermediaries.

A unique identifier used to receive Bitcoin payments.

Transactions on the Bitcoin network are generally anonymous.

The process of verifying and adding new transactions to the Bitcoin blockchain.

The limited supply of Bitcoin, with a maximum of 21 million coins ever created.

The concept of a currency not backed by physical assets, but instead relying on cryptographic algorithms for security and issuance.

The process of determining how regulations should be applied to blockchain networks and their participants based on their specific nature and activities.

Legally binding agreements that define the relationships between the blockchain network, its operator (if any), and its participants.

A clear framework that establishes rules and responsibilities for participants interacting on a blockchain network.

Understanding and defining how risks and liabilities are distributed among participants in a blockchain network, including issues related to security, confidentiality, and transactions.

The careful consideration of intellectual property rights associated with blockchain technology, including software and its potential for sharing and collaboration.

A distributed ledger where data is stored in blocks linked together in a chronological chain.

A system where data is stored and managed across multiple computers in a network, instead of a single centralized server.

The process of verifying and adding transactions to the blockchain in a secure and transparent manner.

Digital contracts stored on the blockchain that automatically execute when specific conditions are met.

Decentralized autonomous organizations (DAOs) are essentially online, digital entities or organizations that operate through the implementation of pre-coded rules maintained on a blockchain platform. They are managed by a set of rules encoded on a blockchain.

Digital assets that represent a specific value or ownership, and they are often used for financial transactions or investments, but they do not have any intrinsic value.

Legal tender refers to any officially sanctioned form of money declared acceptable for transactions within a particular jurisdiction, and it can be used nationwide.

El Salvador made Bitcoin legal tender, meaning it is recognized as a valid form of payment alongside other currencies.

Ensuring that all parties involved in a smart contract, including dispute resolution bodies, can easily understand the terms and conditions.

Making it possible for contracts to be exported in a format acceptable for financial or other audits, which may be required by participants.

Checking if existing legal systems have mechanisms for resolving disputes related to smart contracts that have already been executed.

Including a mechanism for human intervention to determine if a smart contract has been fulfilled, reducing the risk of overly cautious automation.

The case involved a dispute over the ownership of billions of dollars worth of Bitcoin, mined in Bitcoin's early days, between Craig Wright, who claimed to be Satoshi Nakamoto, and the estate of David Kleiman.

Ross Ulbricht was arrested for operating the Silk Road, an online black market that facilitated illegal transactions using Bitcoin.

Code written into a blockchain that automates actions agreed upon by two parties, removing the need for intermediaries or trust.

The blockchain permanently records every transaction, making it impossible to tamper with or alter the data, ensuring transparency and accountability.