Blockchain Basics Terminology PDF

Summary

This document explains fundamental blockchain concepts, including blocks, consensus methods, and cryptographic security. It also describes blockchain network types, smart contracts, and decentralized finance (DeFi).

Full Transcript

**[Blockchain Basics]** 1. Blockchain: A decentralized digital ledger that records data in blocks connected in a chain. 2. Block: A container storing data (such as transactions) along with a timestamp and a cryptographic hash of the previous block. 3. Genesis Block: The first block in...

**[Blockchain Basics]** 1. Blockchain: A decentralized digital ledger that records data in blocks connected in a chain. 2. Block: A container storing data (such as transactions) along with a timestamp and a cryptographic hash of the previous block. 3. Genesis Block: The first block in a blockchain, which acts as the foundation for the rest of the chain. 4. Node: A device (computer or server) participating in the blockchain network that stores and maintains the blockchain\'s state. 5. Distributed Ledger Technology (DLT): A digital system for recording asset transactions where data is distributed across multiple nodes. **[Consensus Mechanisms]** 1. Consensus: A process where nodes in the blockchain network agree on the validity of transactions. 2. Proof of Work (PoW): A consensus mechanism where participants (miners) solve complex puzzles to validate transactions (e.g., Bitcoin). 3. Proof of Stake (PoS): A consensus mechanism where validators are chosen to create new blocks based on the amount of cryptocurrency they hold. 4. Delegated Proof of Stake (DPoS): A variation of PoS where stakeholders elect delegates to validate blocks. 5. Practical Byzantine Fault Tolerance (PBFT): A consensus method designed to function efficiently even if some nodes are acting maliciously. **[Cryptography & Security]** 1. Hash Function: A function that converts input data into a fixed-size string (hash). Example: SHA-256. 2. Cryptographic Hash: A hash that ensures data integrity by being unique for specific input data. 3. Public Key: A cryptographic key used to receive funds (shared publicly). 4. Private Key: A secret key used to sign transactions and prove ownership. 5. Digital Signature: A cryptographic technique to ensure the authenticity of a message or transaction. **[Blockchain Network Types]** 1. Public Blockchain: Open and permissionless networks like Bitcoin and Ethereum, accessible to anyone. 2. Private Blockchain: A restricted blockchain where access is controlled by an organization. 3. Consortium Blockchain: A semi-decentralized network managed by a group of organizations. 4. Permissioned Blockchain: A blockchain that requires participants to have permission to join the network. **[Smart Contracts & Tokens]** 1. Smart Contract: Self-executing code stored on a blockchain that runs when predetermined conditions are met. 2. Token: A digital asset created on an existing blockchain (e.g., ERC-20 tokens on Ethereum). 3. Utility Token: Provides access to a product or service (e.g., Filecoin). 4. Security Token: Represents ownership of an asset (e.g., shares, real estate). 5. Non-Fungible Token (NFT): A unique digital asset representing ownership of specific items, such as art or collectibles. **[Transactions & Fees]** 1. Transaction: A record of asset movement on a blockchain (like transferring cryptocurrency). 2. Gas Fee: A fee paid to miners or validators to process a transaction on the network (used in Ethereum). 3. Mining: The process of validating transactions and adding them to the blockchain (PoW networks). 4. Validator: A participant responsible for verifying new transactions in PoS networks. **[Blockchain Scalability & Layered Solutions]** 1. Layer 1: The base blockchain (e.g., Bitcoin, Ethereum). 2. Layer 2: Off-chain solutions that enhance blockchain scalability (e.g., Lightning Network, Polygon). 3. Fork: A split in a blockchain into two separate paths, usually due to protocol changes (hard fork or soft fork). 4. Sharding: A technique to divide the blockchain into smaller partitions (shards) to improve scalability. **[Decentralized Finance (DeFi) & Governance]** 1. DeFi: Financial services (lending, borrowing, trading) built on public blockchains without intermediaries. 2. DAO (Decentralized Autonomous Organization): A community-driven organization where decisions are made collectively using smart contracts. 3. Governance Token: A token that allows holders to vote on changes in a blockchain or DeFi project.

Use Quizgecko on...
Browser
Browser