Attending a Blockchain Event Soon? Here’s the Jargon You Will Need
After attending many events, and the ones to come, I realised that it would be helpful not only for me, but for most attendants to have an idea of the vocabulary that is used during presentations.
Ever since Bitcoin (white paper published on 2008 and its adoption skyrocketed from ~2012), Blockchain has been a hot topic in both academia, media, and industries. However, it is still a pretty new topic, so it is normal that the audience feels overwhelmed with all the terms, which origin from several fiels, such as computer science, cryptography, soft/hardware engineering, economics, or finance.
That is why I decided to collect a list of words with their corresponding definitions to help you quick start on the topic and make sure you make the most of every event you attend.
Ready? Let’s go! (ﾉ≧∀≦)ﾉ ‥…━━━★
General Terms: Computer Science & Cryptography
- Blockchain: A distributed digital ledger (book keeping software that is run on multiple computers at the same time). Normally represented as a constantly growing list of blocks.
- Distributed: Run, controlled by many peers or nodes.
- Decentralized: Refers to a system where there is no central authority controlling it. Whereas public blockchains strive to achieve decentralization, not every blockchain is decentralized.
- Block(s): The format, in which a collection of records (transactions) is stored. They contain a hash (link to the previous block), a timestamp, and transaction data.
- Chain: Referring to the fact that every new block has a link to the previous one, creating a chain of blocks.
- Blockchain’s Main Property: Once data has been broadcasted, it cannot be modified. It is recurrently mentioned that it avoids Double-spending.
- Public Blockchain: Bitcoin and Ethereum blockchains are examples of public blockchains. Any peer can become a validator or a miner.
- Private Blockchain: Validators or miners are vetted by the owner of the network. Examples of private chains are blockchains built and run by banks or other organisations.
- Double-spending: It is an error that occurs when an amount of currency is used more than one time.
- Broadcasted: Once a block has been mined, the information of this event is sent to all the nodes of the network. This means that the transaction(s) has been confirmed and the data will be publicly available on e.g. Blockchain.info.
- Mining (to mine blocks): The process of creating blocks on a blockchain.
- Node(s), Peer(s): Computer or active electronic device that is connected to a blockchain network and that follows its protocol. There are two types: validators and non-validators.
- Validators or Miners: Peers or nodes that participate in the consensus and in mining tokens.
- Non-Validators: Every other node or peer in the network that does not participate in the consensus or in mining tokens.
- Protocol: Set of rules and process(es) that a computer or electronic device has to follow in order to stay connected to a blockchain network.
- Consensus Algorithm: Methods designed to achieve automatic agreement in the process of decision-making in a system where many peers are participating. Examples of consensus algorithms are Proof-of-Work (PoW) and Proof-of-Stake (PoS).
- Cryptocurrency: A digital asset that relies on cryptography to secure transactions. Examples: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTE)
- Proof-of-Work (PoW): In a PoW system, validators spend computing power to solve mathematical puzzles in order to mine blocks (create blocks). Whichever validator solves the puzzle first, mines the next block. Bitcoin and Ethereum rely on PoW. Ethereum is currently transitioning from PoW to PoS with Casper.
- Proof-of-Stake (PoS): In a PoS system, validators must set aside a portion of wealth, which they will automatically lose if they deviate from the protocol. The validator that mines the next block will be determined in a pseudo-random manner. Tendermint’s consensus algorithm relies on PoS.
- Byzantine Fault Tolerance (BFT): A system is Byzantine Fault Tolerant when it is resistant by design to Byzantine generals problem.
- Byzantine Generals Problem (BGP)*: The risk of, in a system where the agreement of all the participants in a plan is needed, one of the participants (known as Malicious Byzantine Actor) chooses to break the agreement and consequently causing the system to fail.
- Malicious Byzantine Actor (MBA): Peer or node that decides to deviate from the protocol, causing the system to fail.
*The origins of Byzantine Generals Problem:
Byzantine refers to the Byzantine Generals’ Problem, an agreement problem in which a group of generals, each commanding a portion of the Byzantine army, encircle a city. These generals wish to formulate a plan for attacking the city. In its simplest form, the generals must only decide whether to attack or retreat. Some generals may prefer to attack, while others prefer to retreat. The important thing is that every general agrees on a common decision, for a halfhearted attack by a few generals would become a rout and be worse than a coordinated attack or a coordinated retreat. — Ramport, Shostak, & Pease, 1982
If I run into more terms that I find important, I will update this post. Stay tuned for more vocabulary!
Thank you ❤