Introduction to Blockchain Technology

A digital asset that uses cryptography for security and operates independently of central banks.

A distributed ledger that records all transactions in a network.

A process where computers in a blockchain network verify and add new transactions to the blockchain.

The irreversible and permanent nature of blockchain transactions.

A method used to secure data on the blockchain, making it difficult to alter or hack.

Digital wallets used to store, send, and receive cryptoassets.

Tools that analyze blockchain data to detect suspicious activity and trace cryptoasset transactions.

A comprehensive record of all transactions related to a specific cryptoasset, starting from its creation.

A cryptographic process used to confirm the validity of transactions on a blockchain.

A private key is a secret code used to authorize transactions on a blockchain.

A mathematically verifiable output that confirms the authenticity of a transaction without revealing the private key.

A group of verified transactions added to the blockchain ledger in a chronological order.

A specific set of rules that govern how transactions are added to a blockchain.

The validation process that ensures that transactions are valid and meet the blockchain's specified rules.

A situation where two separate and valid blocks are created simultaneously, creating two competing branches of the blockchain.

The concept that anyone can review and verify the entire history of a blockchain due to its open and distributed nature.

A consensus mechanism where validators are chosen proportionally to the amount of cryptocurrency they hold in the network, ensuring a more energy-efficient way to validate transactions compared to proof of work.

The process of locking up cryptocurrency to participate in transaction validation and earn rewards.

Individuals chosen by the Proof of Stake system to verify transactions and add new blocks to the blockchain. They are selected based on the amount of cryptocurrency they have staked.

Groups of users who pool their staked coins together to improve their chances of being chosen as validators and increase their reward potential.

A crucial aspect of proof of stake where validators who accurately verify transactions receive a reward in the form of cryptocurrency and transaction fees.

A potential risk with proof of stake where an individual or group could accumulate a large enough stake to control the network, potentially leading to security risks and fraudulent activities.

The process of securing blockchain transactions using cryptography, allowing users to prove ownership without revealing their private keys.

A fundraising method where companies issue cryptocurrency tokens to investors in exchange for traditional currency or other cryptocurrencies.

A white paper outlining the project's details, goals, and how the issued tokens will be used.

Tokens that represent ownership in a company, analogous to shares bought in an IPO.

Tokens that can be redeemed for products or services offered by the company in the future.

Utility tokens that give holders the right to vote on issues related to the blockchain or mining.

A decentralized blockchain platform with its own cryptocurrency called ‘ether’ (ETH).

A token standard used by many cryptocurrencies built on the Ethereum blockchain.

A small amount of ETH required for Ethereum transactions to be performed on the blockchain.

A digital asset, where the value is determined by the market, not a physical commodity or government backing. Examples include Bitcoin, Ether, and Monero.

A type of currency backed by a government, usually not tied to a physical asset like gold. This is the type of money we typically use every day.

A system where every transaction is recorded and publicly accessible, making it difficult to tamper with.

The unique code that identifies a specific cryptocurrency address, similar to a bank account number, used for sending and receiving assets.

A decentralized system where transactions are verified and added to the blockchain, not controlled by any one entity.

The process of verifying transactions and adding new blocks to the blockchain, often involving specialized computers.

The ability to alter or manipulate the market value of cryptocurrencies, often through deceptive practices.

The value of cryptocurrencies is solely determined by the current market value, without any intrinsic worth or government backing.

Central bank digital currency (CBDC) is a digital form of a country's official currency issued and controlled by its central bank. It exists as digital entries on a central bank's balance sheet, providing a direct claim on the central bank.

A permissioned blockchain allows only authorized entities to access and modify data, while a permissionless blockchain is open to anyone. CBDCs typically use permissioned blockchains for greater control and security.

Stablecoins are digital currencies designed to maintain a stable value tied to an underlying asset like a fiat currency, commodity, or algorithm.

Asset-backed stablecoins use real-world assets to back their value. For example, a stablecoin can be backed by one US dollar, ensuring its value stays close to $1.

Algorithmic stablecoins maintain their peg through an algorithm. For example, TerraUSD (UST) used the LUNA token to stabilize its value, aiming to keep it pegged to the US dollar.

Decoupling refers to a stablecoin losing its peg to its underlying asset. For example, TerraUSD (UST) decoupled from the US dollar, leading to a significant loss in value.

Minting refers to creating new stablecoins, often by burning or inactivating another token. In the case of TerraUSD (UST), one LUNA token needed to be burned to mint one UST.

Burning refers to the process of removing stablecoins from circulation, often by creating another token. In the case of TerraUSD (UST), burning one UST allowed for the creation of one LUNA token.