Blockchain Basics Terminology PDF

**[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.