Blockchain Glossary

Information provided by: Bitbuddy
Definitions Meaning and Usage
[A] satoshi The smallest unit of Bitcoin, 0.00000001 BTC,
Altcoin Any other cryptocurrency besides Bitcoin.
ASIC Short for Application Specific Integrated Circuit. These powerful computers are built for the purpose of mining any cryptocurrency based on a proof of work system, such as Bitcoin. Because they are specifically designed for mining, they are far more efficient than traditional CPU and GPU mining rigs.
Asset Something of value, often held as a store of value or wealth.
Brain wallet Creating a new set of public and private keys and memorizing them. This creates a system where the only place your cryptocurrency is stored is in your mind.
Charlie Lee Prominent member of crypto-space and creator of one of the first altcoins, Litecoin.
Cold wallet A place to store public and private keys that resides offline. Since keys are not connected to the Internet in any way, they are less succeptible to being hacked.
Consensus Agreement; the necessity for miners to agree on the validity of a blockchain. There are multiple methods by which miners can agree on validity, the most popular of which is called proof of work.
Consortium Blockchain A blockchain where the consensus process is controlled by a pre-selected set of nodes. Popular among private organizations but not as useful for digital currencies
Crowdsourcing The process of receiving funding from a large number of people. Instead of having a few investors give a lot of money each, companies look for many investors to put in small amounts.
Cryptoassets The broadest term for a blockchain-based store of value. Cryptocurrencies, tokens, and ICO's could all be considered under the umbrella of cryptoassets.
Cryptocurrency A digital store of value that is transferred through a blockchain.
Cryptography The process of making something secret or hidden.
Cryptotokens A cryptoasset that is redeemable for something or usable in some way.
Cypherpunks A group of digital pioneers first active in the 1980's who sought to defend digital privacy through various cryptographic measures. First spoke of a need for digital currency.
DAO Short for Decentralized, Autonomous Organization. Large mechanisms that can self manage and perform various functions, often including smart contracts as a component. Often built on blockchain platforms such as Ethereum.
Decentralized Descriptive of something lacking a central authority. Power is distributed to many democratic points as opposed to one ruling point.
Decentralized app (dApp) An application that has back-end code running on a decentralized network instead of a central server.
Desktop wallet A piece of software that can be downloaded and used to store public and private keys on one's personal computer.
Escrow A bond kept in the custody of a third party, used to ensure payment. It is possible that many escrow services will be replaced by smart contracts.
Exchange A place where assets can be traded either between different assets or for currency itself. For example, there are exchanges where you can trade bitcoins for dollars and exchanges where you can trade bitcoins for ether directly.
Fiat currency A currency issued by a government, often a reference to paper money. Examples include the US Dollar, the Euro, the Yen, etc.
Financial Security An asset is classified as a security if there is an expectation that the asset will increase in value due to work performed by others.
Hard fork A hard fork is a protocol change that results in an entirely new blockchain with an entirely new currency. Before the change, all transactions are valid, and after the fork two blockchains will exist with two currencies. Example: Bitcoin and Bitcoin Cash hard fork.
Hash function A mathematical formula that is designed to take inputs, "hash" them, and return outputs that appear to be completely unrelated to the inputs. The outputs appear to be random.
Hot wallet A wallet that is connected to the Internet in some capacity and thus susceptible to hacks.
Genesis block The first block ever mined on a blockchain. A genesis block is the first block in the chain.
Ledger A measure of how much money is borrowed during margin trading. A ratio of how much money is borrowed compared with how much money is put down as collateral. 1:1 leverage means not borrowing anything. 1:100 leverage means borrowing 100 times more than is offered as collateral.
Light client Most wallets; accesses only the most recent information on the blockchain that's relevant to your particular account at the time, rather than storing the entirety of the massive file that is the blockchain.
Liquidity The ease and quickness with which an asset can be bought and sold at the actual market price. Higher market volume often denotes higher liquidity. The most liquid asset is money itself and an example of an illiquid asset might be real estate.
Margin call When trading with borrowed money, an exchange can margin call you and sell off collateral if your position reaches a critical point where it must be closed. Margin called = you have to pay up.
Market capitalization The circulating number of units of an asset multiplied by the current market price. An indicator of the size of a market.
Masternode A network overlaying a traditional consensus mechanism that allows for additional features. First shown in the Dash system.
Medium of exchange An instrument used to conduct trade. Currencies are mediums of exchange because they represent consistent value.
Miner Someone who uses their computing power to verify transactions on a blockchain in return for cryptocurrency.
Mining The process of performing computational work in order to verify transactions and add blocks to the blockchain in proof of work consensus models. Miners are paid with fees and block rewards.
Mooning A investment term denoting that something is going to offer investors a massive return on their investment. Something that is mooning is rapidly rising in price, often making investors wealthy.
Multisignature wallet A wallet that is only accessible using more than one private key. More safe from hacking than a single signature wallet.
Nick Szabo Famous cypherpunk and creator of Bit Gold, a precursor to Bitcoin. Often credited with creating the term "smart contract."
Nonce A special number added to the end of a block that, when hashed with the entire block as well as the hash of the previous block, produces a new hash with a certain number of leading zeroes. When miners are creating a block, they are racing to find the nonce.
Online wallet An online service that stores private keys on your behalf. Generally not the safest way to store private keys.
Oracle Something that feeds information to a blockchain. Smart contracts can use oracles to know when the terms of an agreement have been met.
Paper wallet The process of creating a new key pair, transferring crypto-assets to the associated public address, and writing the public and private keys on a piece of paper. The keys are not stored anywhere online.
Peer to peer A system where individuals can interact directly with each other without having to go through a third party as a mediator.
Private key A random number belonging to you and only you, used to digitally sign cryptocurrency transfers. Private keys give you access to your funds and should be kept secret.
Proof of stake A method of determining consensus that determines who is likely to mine the next block by weighting the amount of wealth a person has "staked," or locked away in a special kind of wallet.
Proof of work The original method of determining consensus. This method gives the right to add a new block to the chain to the computer that is lucky enough to find a particular number, that when fed into a hashing algorithm produces a specific number of leading zeroes.
Pseudoanonymous Not fully anonymous, only sort of anonymous. If something is only psuedo-anonymous, someone might be able to figure out your identity after all.
Pseudonym A fake name or identifier. In a pseudonymous system, if a connection is made between the pseudonym and the person it corresponds to its power to hide identity is compromised.
Public address Given out to others, allowing them to send you funds. The public address is the public key, with a few adjustments made. This makes it two steps removed from your private key.
Public key One step removed from the private key. Allows your digital signatures to be verified. Part of the key pair necessary for the function of public key cryptography.
Pump and Dump A scheme in a marketplace where investors buy up an asset so the price rises so that they can immediately sell the asset at the new, higher price and take a profit.
Rekt A state of having lost money on an investment. Losing money = getting rekt.
Satoshi Nakamoto "He's the hero Gotham deserves, but not the one it needs right now. So, we'll hunt him, because he can take it. Because he's not our hero. He's a silent guardian. A watchful protector. A Dark Knight." - Jim Gordon, The Dark Knight Also, the anonymous figure(s) who invented Bitcoin.
Scaling The process of expanding a network to properly accommodate an increase in users.
Scrypt A hashing algorithm, analogous to SHA-256, that helps to remove the advantage ASIC machines have over traditional CPUs and GPUs.
SHA-256 Secure Hashing Algorithm, 256 bit. Utilized by the entire internet (and Bitcoin!) to maintain security.
Smart contract A digital agreement that has the power to auto-execute and the ability to transfer funds between parties. The combination of a contract and an escrow account in one piece of code that runs on a blockchain. Digitally signed by all parties involved.
Soft fork A protocol change that is backwards compatible, allowing unupgraded nodes to interact with upgraded ones normally. A soft fork does not necessitate the creation of an entirely new cryptoasset.
Solidity The coding language of the Ethereum blockchain.
Store of value One of the three functions of currency. Refers to the ability of a currency to be saved, stored, and exchanged for goods or services at a later time.
Technical Analysis The use of market and price information to make predictions about future price action of an asset.
The DAO A decentralized venture fund, built on Ethereum. A major hack of the DAO early on forced Vitalik Buterin to fork Ethereum to return stolen funds.
Tokenized When an asset is split into many small pieces and distributed using a blockchain.
Venture capital Capital invested in a project in which there is a substantial element of risk, typically a new or expanding business.
Vitalik Buterin
Whale A very wealthy investor.
White paper A summary of the goals, timelines, policies and niche of a company. Includes the value proposition.
Yellow paper A technical, research style paper explaining the computer science, math, and economics behind a proposed blockchain technology application.
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