BLOCKCHAIN TECHNOLOGY GLOSSARY
Here is a glossary on one of the most popular terms of the recent years. If you have ever wondered what blockchain technology is, this glossary may guide you to figure it out.
A
API: Application Programming Interface. A software contact point that enables two separate applications to communicate with each other. API is a way to specify the means of communication between different elements.
ASIC: Application Specific Integrated Circuit. It is a marker made out of silicone that is used to perform a specific task.
B
Block: It refers to the validated record/transaction set proposed by one of the actors in the ecosystem.
Block Explorer: It refers to the publicly accessible website (service) that allows all to track the transactions on the blockchain.
Blockchain: Growing chain of transactions. These transactions are grouped in blocks and these blocks are connected via a cryptographic function. When it is generated/signed once, it is not possible to modify a transaction inside a block. Once it is inserted to the chain, it may be necessary to wait for a couple confirmations (i.e., later blocks) to ensure finality.
Block Height: The number of blocks chained together. The first block of the chain is called the genesis block with height 0 since no blocks precede it.
Bitcoin: The first-ever cryptocurrency based on blockchain technology. Created in 2009 by Satoshi Nakomoto.
Block Reward: The payment made to a proposer (miner, staker, etc.) as a reward for successfully proposing a block containing a bunch of transactions.
C
Cryptography: A practical and scientific domain focusing on preventing the information leaked, intack contained in data from being accessible by unwanted parties.
Cryptographic Hash Function: Encrypting the data to be written on the blockchain with cryptographic encryption algorithms means reducing the data to a certain number of characters.
Central Ledger: Refers to the registry that records financial transactions and is managed by a central government (such as a bank).
Centralized: A structure that is managed from a center and where a small number of nodes can control the entire network.
Consensus: It refers to the agreement of the participants on the blockchain that the transactions are valid and the ledgers are duplicates of each other.
Consortium Blockchain: The blockchain structure that is based on an organizational consensus, is “semi-private” and has a controlled user group, but can work in different organizations. It refers to a combination of open blockchain structures and public blockchain structures.
Confirmation: Refers to the process of successfully encrypting a transaction and adding it to the blockchain.
Cipher: The encoding algorithm that encodes and decodes data in special or hidden ways.
Chain Split: It refers to the separation of a blockchain into more than one branch due to a technical change or an obligation.
Client: A software program running on a desktop, laptop, or mobile device that allows transactions to be made on the blockchain.
D
Decentralized: A distributed and independent structure in which control is not realized from a single center.
Decryption: The process of converting data that has been made unreadable by encryption into its unencrypted form.
Digital Identity: It refers to a digital code that stores identity information such as name-surname, place of birth, date of birth on a blockchain basis and verifies these identity data to identify the owner in a digital environment.
Distributed: The data transport structure that allows the data to be located without a certain order and centrality.
Distributed Ledger: It refers to wallets where data is stored irregularly and distributed in nodes without being tied to a single center. These wallets can be accessible to anyone or can be found privately or with permission to access.
Distributed Ledger Technology: The technology in which activities such as the execution, approval, or authorization of transactions are held in nodes with the approval of all participants in an independent network without the need for a central authority.
E
Escrow: It is an intermediary service used by parties who do not know each other or have not established trust between them while shopping.
F
Fork: The splitting of a blockchain into more than one branch due to a technical change or an obligation. If the technical change is backward compatible it is called a soft fork, if incompatible it is called a hard fork.
Full Node: It refers to a node that does not need another node when performing verification, and that has a copy of the entire blockchain.
G
Genesis Block: It is the name given to the initial block of the blockchain. In this block, the production conditions of the cryptocurrency, the production amount, the manufacturer’s special message, etc. information is included.
H
Hash: It refers to the application of an algorithmic process to transform data into a random sequence of numbers and letters. Thus, the data desired to be entered into the blockchain becomes a digital fingerprint that allows it to take place in the chain.
Hash Power: It refers to the total processing power consumed by all miners for block verification.
I
Immutability: The feature that bans the modification of data when it is once blocked and chained.
L
Ledger: Refers to the registry in which financial transactions are recorded, added records cannot be deleted, and only new records can be added.
Lightning Network: It is the second-layer payment protocol running on the blockchain. It refers to the network structure that allows all payment transactions directed to the same address to be sent in a single transaction in order to increase the speed and reduce the cost.
M
Mainnet: It refers to the main network that is open to everyone and is working on the blockchain, where participants can perform transactions.
Masternode: Refers to full nodes that are specifically authorized or elected by voting to perform tasks such as transaction validation and transaction secrecy in the blockchain network.
Merkle Tree: It is the tree structure in which the transactions in the blockchain block are matched with each other until a single cryptographic hash is obtained.
Merkle Root: It refers to the last and unique cryptographic summary, which includes the cryptographic summary of all transactions, which is the result of matching the transactions in the blockchain block with each other and obtaining the cryptographic summaries.
N
Network: The data transfer network to which the blockchain is connected.
Node: Refers to the copy of the ledger operated by the participant on a blockchain.
O
Off-chain Transaction: Transfer transactions that are not written to the blockchain network and that are performed on the parallel blockchain network (Liquid, Lighting, etc.).
Orphan Block: Used to identify blocks that are verified but not accepted into the blockchain. When another block containing the same data is validated before, the next block is rejected and not included in the blockchain.
P
Peer to Peer: The distributed network structure that occurs with the direct data sharing between nodes on the blockchain network without the need for a central server.
Permissioned Ledger: It refers to the blockchain registry that grants access and registration authorization to participants with certain conditions.
Private Blockchain: The blockchain that is accessible only to permitted participants and is agreed upon with permission.
Protocol: Refers to rules that describe interactions in a network, usually including consensus, transaction validation, and network participation requirements.
Public Blockchain: A blockchain that is open to everyone and where all participants have equal rights.
R
Replicated Ledger: Refers to the current copy of the registers in a network.
S
Second-layer Solutions: Blockchains that run parallel to the main chain in order to solve the scalability and efficiency problems of the blockchain, especially for micropayments.
Side Chain: It refers to the blockchain that operates in parallel with the main chain, which allows the transfer between the main chain and the side chain, and the protocol and its services are missing, I think. It is part of the second layer of blockchain solutions.
Smart Contract: The decentralized platform that enables transactions on the data on the blockchain network in a predetermined flow and is verified by a secure computer network.
Stale Block: It means that a block structure that has already been successfully resolved is considered invalid and it is not possible to reuse it.
T
Timelock: A type of primitive smart contract model that requires a certain amount of time to pass or the blockchain to reach a certain height for a certain transaction to occur.
Timestamp: The time information that expresses the time when a certain transaction takes place and is usually specified in the format year-month-day-hour-minute-second.
U
Unconfirmed: It refers to the state of a transaction that has not been confirmed by the miner and has not been added to the blockchain.
Unpermissioned Ledger: It refers to the blockchain structure that is open to everyone’s access and transaction without seeking any conditions.
V
Validator: It refers to the person who manages the device or device who is responsible for verifying the security of the chain, as well as ensuring the transactions carried out on the blockchain are “lawful” and not subject to double spending or malicious transactions.
Z
Zero Confirmation Transaction: It indicates that the transaction has not yet been approved by the miner after the transfer has occurred.
About Özer Aydemir
Computer engineer since 2002 and entrepreneur since 2007. CEO and Co-Founder of IOTIQ GmbH. Project leader for Eureka projects Insist, and I-DELTA; project member of BaaS, Demwatch, Insist, Mos2s, SecureGrid, Optimum, Pianism, I2Panema, Machinaide, and hopefully many others in the future.
