Beginners guide to Blockchain Terms
If you are new to Parsl, and cryptocurrency in general, there is a chance that you may get lost amidst all the jargon. This glossary will explain some of the terms that you’ll see across our official channels!
An airdrop is when a cryptocurrency project distributes tokens to users free of charge. Often considered a marketing strategy, its goal is to not only reward users but also spread awareness about the project. We completed our Airdrop on the 29th October, 4:20PM UTC+11.
A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain).
At Parsl, we are utilizing a blockchain to record the transactions of physical goods that are linked directly to the Cannabis industry. By placing them into an incorruptible database, we can ensure the goods that are transferred between companies, is tracked and available for others to see and verify.
Block.one is the company behind EOS. They are based out of the Cayman Islands. Brendan Blumer is the CEO and has been involved in the blockchain space since 2014. The CTO is Dan Larimer, who created the DPOS consensus system and decentralized autonomous organizations aka DAOs. Larimer is the also the man behind BitShares and Steem.
Consensus is a dynamic method of achieving agreement within a group which makes sure that an agreement can be reached which could benefit the group as a whole. The method by which a group achieves consensus is called “consensus mechanism”.
Cryptocurrency is a term used to describe peer-to-peer, decentralized, digital currency which is mostly based on the blockchain technology. Bitcoin, created by the unknown Satoshi Nakamoto, was the first cryptocurrency. Users can send and store cryptocurrencies via the use of public key cryptography.
A token is a representation of some sort of value in its native ecosystem. It could be monetary value, stake, voting right, or anything. A token is not limited to one particular function and can take up multiple roles.
Dapps or Decentralized Applications are applications that are built on top of a blockchain using trustless protocols. Dapps use tokens for various functionalities within their ecosystem. Parsl is a Dapp that runs on top of the EOS blockchain.
Digital signatures are one of the most important cryptographical tools. Digital signatures and real-life signatures pretty much share the same properties:
- A signature should be able to verify that you are indeed the signee
- It shouldn’t be possible to forge the signature
- After signing on something, you should not be able to claim that someone else signed it for you.
EOSio is a smart contract platform created by Dan Larimer and the company Block.one. EOS aims to be the go-to platform for industrial-scale Dapps. EOS uses the DPOS (delegated proof of stake) consensus system to potentially scale up to millions of transactions per second.
EOS Account Name
Users need to have an EOS account to send and receive EOS tokens. The EOS account is a human-readable name that is stored on the blockchain. The account can be owned by an individual or a group of individuals.
The exchange serves one of the most critical functions in the crypto ecosystem. Think of them as the link between the fiat world and the crypto world. There are two types of exchanges out there:
Centralised — Usually fiat to crypto
Decentralised — Only crypto to crypto
We are using inflation in our ecosystem as well. There will initially be 2 billion SEED tokens with an inflation rate of 5% per annum, bringing in 100 million new SEED tokens into the system. The inflation will go towards maintaining the network, paying operational costs, and rewarding the SEED token holders.
The POD token is used by both buyers and sellers to manage purchases across the blockchain. Instead of being a floating currency, POD is fixed at 1:1 against the US dollar. POD tokens are only created when funds enter the ecosystem. Once funds are pulled out of the system, the associated tokens are immediately destroyed. You can read more about PODs here in our Tokenomics document.
Proof of Stake
Proof of Stake is a consensus mechanism that makes the entire mining process virtual and replaces miners with validators. The concept is to have these validators lock up some of their coins as a stake. They get a block reward proportional to their stake. Unlike Proof of Work, Proof of Stake is not a wasteful process.
Proof of Work
Proof of Work is the consensus mechanism that is used by Bitcoin and Ethereum among others. Proof of Work uses the computational power of miners to solve cryptographically hard puzzles. Upon solving the puzzles, the miners “mine” blocks which are then added to the blockchain and the successful miner(s) gets a block reward.
The RewardDrop is pretty similar to the Airdrop but with less focus on marketing. RewardDrops are, as the name suggests, more focused on engaging with the community and rewarding loyal users with a fair and equitable stake. Learn more about our RewardDrop.
SEED is our main utility token which is subject to the whims of the free market. SEED will be used to pay the subscription fees of the platform, which will be the main source of income in Parsl. You can read more about SEED in our Tokenomics document.
SEEDgrab is our version of the Airgrab bonus. In order to participate, you needed to have under 100 EOS in your account and registered before the 20,000 accounts hardimit was reached. There are 10 million SEED tokens up for grabs and upon the completion of registration, all of the tokens will be evenly split between the participants. The tokens will be available in their wallets by 1st February.
Smart contracts are automated, self-executing escrow contracts that run on top of the blockchain. The perfect example of a Smart Contract is when you are interacting with a vending machine. Essentially you are directly communicating with the service provider without the presence of any middlemen. Plus, each and every step that you take in your interaction can only take place after you have completed the previous step. This holds true for smart contracts as well.
A stablecoin is a special kind of token that always has a fixed value regardless of free market conditions. This happens by establishing a peg aka fixed exchange rate. Pegging means fixing the value of a currency to:
- The value of another single currency
- A basket of other currencies
- Another valuable asset such as gold.
Tokenomics, a combination of the terms “Token” and “Economics”, is the design of the Dapp’s token ecosystem. In order to create a proper token ecosystem, a token should be strong enough to become an indispensable part of the Dapp.
A wallet is a digital wallet that you can use to store, send and receive various cryptocurrencies. The wallet doesn’t “store” your money as a real-world wallet does. Instead, it interfaces with the Blockchain, showing balances and giving you access to your account.
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