Algorithm: An unambiguous specification of how to solve a class of problems. Algorithms can perform calculation, data processing and automated reasoning tasks.
Altcoin: The alternative cryptocurrencies launched after the success of Bitcoin. The success of Bitcoin as the first peer-to-peer digital currency paved the way for many altcoins to follow.
Application Specific Integrated Circuit (ASIC): An integrated circuit (IC) customized for a particular use, rather than intended for general-purpose use. For example, a chip designed to run in a digital voice recorder or a high-efficiency Bitcoin miner is an ASIC.
Bitcoin: Bitcoin is a cryptocurrency, a form of electronic cash. It is a decentralized digital currency without a central bank or single administrator that can be sent from user-to-user on the peer-to-peer bitcoin network without the need for intermediaries.
Bitcoin Improvement Proposal (BIP): A design document for introducing features or information to Bitcoin. The BIP should provide a concise technical specification of the feature and a rationale for the feature. This is the standard way of communicating ideas since Bitcoin has no formal structure.
Blockchain: A blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. Blockchains are made of a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. A blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.
Blockchain (Public): State of the art public Blockchain protocols based on Proof of Work (PoW) consensus algorithms are open source and not permissioned. Anyone can participate, without permission. (1) Anyone can download the code and start running a public node on their local device, validating transactions in the network, thus participating in the consensus process – the process for determining what blocks get added to the chain and what the current state is. (2) Anyone in the world can send transactions through the network and expect to see them included in the blockchain if they are valid. (3) Anyone can read transaction on the public block explorer. Transactions are transparent, but anonymous/pseudonumous. Examples of public blockchains include Bitcoin, Ethereum, Monero, Dash, and Litecoin. (Source)
Blockchain (Permissioned / Private): Write permissions are kept centralized to one organization. Read permissions may be public or restricted to an arbitrary extent. Example applications include database management, auditing, etc. which are internal to a single company, and so public readability may in many cases not be necessary at all. In other cases public audit ability is desired. Private blockchains are a way of taking advantage of blockchain technology by setting up groups and participants who can verify transactions internally. This puts you at the risk of security breaches just like in a centralized system, as opposed to public blockchain secured by game theoretic incentive mechanisms. Examples of permissioned blockchains are MONAX and Multichain. (Source)
Blockchain (Federated): Federated Blockchains operate under the leadership of a group. As opposed to public Blockchains, they don’t allow any person with access to the Internet to participate in the process of verifying transactions. Federated Blockchains are faster (higher scalability) and provide more transaction privacy. Consortium blockchains are mostly used in the banking sector. The consensus process is controlled by a pre-selected set of nodes; for example, one might imagine a consortium of 15 financial institutions, each of which operates a node and of which 10 must sign every block in order for the block to be valid. The right to read the blockchain may be public, or restricted to the participants. Examples of federated blockchains include R3 (Banks), EWF (Energy), B3i (Insurance), and Corda. (Source)
Block (of blockchain): One or more transactions prefaced by a block header and protected by proof of work. Blocks are the data stored on the block chain.
Block Explorer: a web tool that provides detailed information about blocks, addresses, and transactions of a given blockchain.
Block Reward: The amount that miners may claim as a reward for creating a block. Equal to the sum of the block subsidy (newly available satoshis) plus the transactions fees paid by transactions included in the block.
Byzantine Fault Tolerance: The dependability of a fault-tolerant computer system, particularly distributed computing systems, where components may fail and there is imperfect information on whether a component has failed. In a "Byzantine failure", a component such as a server can inconsistently appear both failed and functioning to failure-detection systems, presenting different symptoms to different observers.
Consensus (computer science): The consensus problem requires agreement among a number of processes (or agents) for a single data value. Some of the processes (agents) may fail or be unreliable in other ways, so consensus protocols must be fault tolerant or resilient. The processes must somehow put forth their candidate values, communicate with one another, and agree on a single consensus value.
Cryptocurrency: A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
Decentralized Application (DApp): A DApp has its backend code running on a decentralized peer-to-peer network. Contrast this with an app where the backend code is running on centralized servers.
Decentralized Autonomous Organization (DAO): A decentralized autonomous organization, sometimes labeled a decentralized autonomous corporation, is an organization represented by rules encoded as a computer program that is transparent, controlled by shareholders and not influenced by a central government.
Distributed Ledger: A distributed ledger is a database that is consensually shared and synchronized across network spread across multiple sites, institutions or geographies. It allows transactions to have public "witnesses," thereby making a cyber attack more difficult.
Digital Signature: A digital signature refers to a set of algorithms and encryption protections used to determine the authenticity of a document or software. In simpler terms, a digital signature is a complicated way to verify that a document hasn't been tampered with during transit between sender and signer.
Double-Spending: A potential flaw in a digital cash scheme in which the same single digital token can be spent more than once. This is possible because a digital token consists of a digital file that can be duplicated or falsified.
Ethereum: Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions.
Ethereum Improvement Proposal (EIP): Ethereum Improvement Proposals (EIPs) describe standards for the Ethereum platform, including core protocol specifications, client APIs, and contract standards.
Ethereum Request for Comments (ERC): Ethereum Request for Comments are authored by Ethereum community developers in the form of a memorandum describing methods, behaviors, research, or innovations applicable to the working of the Ethereum ecosystem. It is submitted either for peer review or simply to convey new concepts or information. After core developers and community approval, the proposal becomes a standard.
ERC-20: A technical standard used for smart contracts on the Ethereum blockchain for implementing tokens. ERC stands for Ethereum Request for Comment, and 20 is the number that was assigned to this request. The clear majority of tokens issued on the Ethereum blockchain are ERC-20 compliant.
ERC-721: The current standard for non-fungible tokens, or unique digital assets, on the ethereum network. Many digital collectibles are building on the 721 standard.
ERC-725: Allows for self-sovereign identity. Users can own and manage their identity instead of ceding ownership of identity to centralized organizations. An open, portable standard for identities enable decentralized reputation, governance, and more.
Ethereum Virtual Machine (EVM): The Ethereum Virtual Machine (EVM) is the runtime environment for smart contracts in Ethereum. It is a 256-bit register stack, designed to run the same code exactly as intended. It is the fundamental consensus mechanism for Ethereum. The formal definition of the EVM is specified in the Ethereum Yellow Paper.It is sandboxed and also completely isolated from the network, filesystem or other processes of the host computer system. Every Ethereum node in the network runs an EVM implementation and executes the same instructions. On February 1, 2018, there were 27,500 nodes in the main Ethereum network. (Source)
Genesis Block: A genesis block is the first block of a block chain. Modern versions of Bitcoin number it as block 0, though very early versions counted it as block 1. The genesis block is almost always hardcoded into the software of the applications that utilize its blockchain.
Halving: A fixed event by which the block reward is cut in half e.g. a Bitcoin halving occurs after every 210,000 blocks are mined, or confirmed, by the system.
Hardfork: A radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa). This requires all nodes or users to upgrade to the latest version of the protocol software.
Hashcash: Hashcash is a proof-of-work system used to limit email spam and denial-of-service attacks, and more recently has become known for its use in bitcoin (and other cryptocurrencies) as part of the mining algorithm. Hashcash was proposed in 1997 by Adam Back.
Hashrate: A hash is the output of a hash function and, as it relates to Bitcoin, the Hash Rate is the speed at which a compute is completing an operation in the Bitcoin code. A higher hash rate is better when mining as it increases your opportunity of finding the next block and receiving the reward.
Initial Coin Offering (ICO): An initial coin offering or initial currency offering is a type of funding using cryptocurrencies. Mostly the process is done by crowdfunding but private ICO's are becoming more common
Interplanetary File System (IPFS): InterPlanetary File System is a protocol and network designed to create a content-addressable, peer-to-peer method of storing and sharing hypermedia in a distributed file system. IPFS was initially designed by Juan Benet, and is now an open-source project developed with help from the community.
Lightning Network: A "second layer" payment protocol that operates on top of a blockchain (most commonly Bitcoin). It theoretically enables fast transactions between participating nodes and has been touted as a solution to the bitcoin scalability problem. It features a peer-to-peer system for making micropayments of digital cryptocurrency through a network of bidirectional payment channels without delegating custody of funds. Lightning Network implementation simplifies atomic swaps. (Source)
Merkle Tree: In cryptography and computer science, a hash tree or Merkle tree is a tree in which every leaf node is labelled with the hash of a data block and every non-leaf node is labelled with the cryptographic hash of the labels of its child nodes.
Mining: Mining is the process of adding transaction records to Bitcoin's public ledger of past transactions (and a "mining rig" is a colloquial metaphor for a single computer system that performs the necessary computations for "mining". This ledger of past transactions is called the block chain as it is a chain of blocks. The blockchain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the blockchain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. The primary purpose of mining is to set the history of transactions in a way that is computationally impractical to modify by any one entity. (Source)
Mining Pool: Pooled mining is a mining approach where multiple generating clients contribute to the generation of a block, and then split the block reward according the contributed processing power. Pooled mining effectively reduces the granularity of the block generation reward, spreading it out more smoothly over time. (Source)
Node: Any computer that connects to the blockchain network is called a node. Nodes that fully enforce all of the rules of the blockchain (i.e., Bitcoin) are called full nodes. Most nodes on the network are lightweight nodes instead of full nodes, only verifying a limited number of transactions relevant to its dealings, making use of the simplified payment verification (SPV) mode. (Source)
Private Key: A private key in the context of Bitcoin is a secret number that allows bitcoins to be spent. Every Bitcoin wallet contains one or more private keys, which are saved in the wallet file. The private keys are mathematically related to all Bitcoin addresses generated for the wallet. (Source)
Proof-of-Work (POW): A Proof-of-Work system (or protocol, or function) is an economic measure to deter denial of service attacks and other service abuses such as spam on a network by requiring some work from the service requester, usually meaning processing time by a computer. (Source)
Proof-of-Stake (POS): Proof-of-Stake algorithms achieve consensus by requiring users to stake an amount of their tokens so as to have a chance of being selected to validate blocks of transactions, and get rewarded for doing so. (Source)
Satoshi: The satoshi is the smallest unit of the Bitcoin cryptocurrency. It is named afterSatoshi Nakamoto, the creator of the protocol used in blockchains and the bitcoin cryptocurrency.
Satoshi Nakamoto: Satoshi Nakamoto is the name used by the unknown person or people who developed bitcoin, authored the bitcoin white paper, and created and deployed bitcoin's original reference implementation. As part of the implementation, they also devised the first blockchain database.
Secure Hash Algorithms (SHA): The Secure Hash Algorithms are a family of cryptographic hash functions published by the National Institute of Standards and Technology (NIST) as a U.S.Federal Information Processing Standard (FIPS). In cryptography, SHA-1 (Secure Hash Algorithm 1) is a cryptographic hash function which takes an input and produces a 160-bit (20-byte) hash value known as a message digest – typically rendered as a hexadecimal number, 40 digits long.
Smart Contract: A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible.
Sidechain: A sidechain is a designation for a blockchain ledger that runs in parallel to a primary blockchain. Entries from the primary blockchain can be linked to and from the sidechain; this allows the sidechain to otherwise operate independently of the primary blockchain.
Softfork: A softfork is a change to the bitcoin protocol wherein only previously valid blocks/transactions are made invalid. Since old nodes will recognize the new blocks as valid, a softfork is backward-compatible. When a majority of miners upgrade to enforce new rules, it is called a miner-activated softfork (MASF). When full nodes coordinate to enforce new rules, without support from miners, it is called a user-activated softfork (UASF).
Simplified Payment Verification (SPV): A method for verifying if particular transactions are included in a block without downloading the entire block. The method is used by some lightweight Bitcoin clients. (Source)
Testnet: A testing network for a decentralized project, that allows testing of experimental features.
Turing Complete: Turing complete is a term used in computability theory to describe abstract machines, usually called automata. Such an automaton is Turing complete, if it can be used to emulate a Turing machine. It is also called computationally universal. Most modern programming languages are Turing-complete.
Wallet: A cryptocurrency wallet stores the public and private keys which can be used to receive or spend a cryptocurrency. The cryptocurrency itself is not in the wallet. In case of bitcoin and cryptocurrencies derived from it, the cryptocurrency is decentrally stored and maintained in a publicly available ledger. (Source)
Whitepaper: A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body's philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision. (Source)
Yellowpaper: A yellow paper is a document containing research that has not yet been formally accepted or published in an academic journal. It is synonymous to the more widely used term preprint. (Source)
51% Attack: A 51% attack is a potential attack on the bitcoin network whereby an organization is somehow able to control the majority of the network mining power (hashrate). Bitcoin is secured by having all miners (computers processing the networks transactions) agree on a shared ledger called the blockchain. Bitcoin nodes look to each other to verify what they're working on is the valid blockchain. If the majority of miners are controlled by a single entity, they would have the power to (at least attempt to) decide which transactions get approved or not. This would allow them to prevent other transactions, and allow their own coins to be spent multiple times - a process called double spending. (Source)