50 Blockchain Terminologies Which are Commonly Used
Blockchain technology is disrupting almost every sector in the world. This technology is making revolutionary changes in many industries and growing rapidly, so the terminology surrounding it. There are many terminologies used in blockchain technology. Each has its own significance & meaning.
To utilize blockchain technology effectively, one must know all related key terms which are explained below:
An address is a very important term in the blockchain. It is nothing but a unique identifier used to identify the sender & receiver. A private key is used to generate an address that is unique to the address. Generally, the address is in the form of alphanumeric characters.
2. Application Specific Integrated Circuit (ASIC):
It is a type of computer processing chip that performs a singular function. ASIC boards have been used in the blockchain industry, to perform SHA256 hashing which is required for Proof-of-Work(PoW).
Airdrops are related to blockchain projects, specifically ICOs. It is all about distributing free tokens to people as rewards. Airdrop may or may not have incentives attached to it.
Transactions are stored into single and a new block of size 1MB is created every 10 minutes. Every block comprised 4 components: a summary of included transactions, a timestamp, reference to the previous block, and the Proof of Work.
5. Block Depth:
Block depth is defined as a block's position index in the blockchain relating to the most recently added block. A block that is seven blocks before the latest block will have a block depth of 6.
6. Block Height:
Block height is defined as a block's position index in the blockchain relating to zeroth block. The 10th block added in the chain will have a block height of 10.
7. Block Reward:
It is a reward that a miner gets after solving the block successfully. Miner adds the first transaction on the block, to claim the reward. The entire process starts with miners searching for blocks to be verified. After the block is found, transactions on the blocks are verified by solving a certain mathematical formula for the reward to be processed. Also, this reward is shared between the group of miners depending on the amount of work they have done.
Blockchain is distributed ledger technology. It consists of nodes that carry a copy of the decentralized ledger. It can be described as a structure that stores transactional records in chronological order while maintaining security, transparency, and decentralization.
9. Blockchain 1.0:
The first generation of blockchain technology performs simple token transactions. Bitcoin is the most prominent example of Blockchain 1.0
10. Blockchain 2.0:
The second generation of blockchain technology focuses not only on exchange transactions also on coding and programming in the form of smart contracts. Ethereum is the first of the blockchain 2.0 generation.
11. Blockchain 3.0:
This generation of Blockchain Development is an upgraded version of blockchain 2.0 with more focus on interoperability and scalability. The most promising blockchain 3.0 project is SkyCoin.
A coin is a digital asset that is native to its own blockchain. E.g. Bitcoin, Ether, Litecoin, etc. Bitcoin functions on its own blockchain i.e. Bitcoin blockchain similarly Ether operates on the Ethereum blockchain.
The consensus is the process through which nodes agree on a single point of the data value in the network. There are various types of consensus algorithms such as Proof of Work (PoW), Proof of Stake(PoS), and Delegated Proof of Stake (DPoS).
14. Consortium Blockchain:
It is a semi-private blockchain that is controlled by two or more groups of companies. These chains would be appropriate for two or more parties that need immutable communication.
A cryptocurrency is a digital currency created as a medium for exchange that used cryptography to secure financial transactions.
16. Cryptocurrency fork:
A cryptocurrency fork is a process by which existing software protocol is split into two versions. A cryptocurrency fork happens when developers alter the source code to add new features resulting in two chains.
17. Fork Hard:
It means a change in software protocol makes two co-existing versions incompatible with each other. New blocks do not support old ones. In this case, all users have to work on a newer version of the network to stay in sync with the network.
18. Fork Soft:
It is a software upgrade that is compatible with old & new versions. It is called backward compatible, which means users won't be cut off from the network if they fail to upgrade the software.
It is a technique used to secure communication between two or more parties by encrypting information.
It is one of the blockchain cryptocurrencies stored on a digital wallet. People can send or receive Bitcoins with this digital wallet. Every transaction is stored in a public list i.e. blockchain.
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