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Blockchain technology: glossary of key terms!

Have you studied a lot and now know basically how a blockchain works or what bitcoin mining is, but are still daunted by an almost endless series of English terms about blockchain technology?

The world of disruptive technologies always creates its own terminology as a way to clearly distinguish its universe and generate curiosity in people, which helps popularize the subject.

With blockchain it would be no different, you will come across terms that scare even the most experienced scholars. For those who want to delve deeper into the topic and even turn block networking into a professional activity, it is necessary to know these many definitions.

But we have good news: in this article, BLOCKBR brings you a small glossary with the most well-known blockchain terms to help you study with more enthusiasm and absorb so much knowledge with confidence!

TYPES OF BLOCKCHAIN

PUBLIC BLOCKCHAIN

It is the blockchain as we have known it since the creation of bitcoin and which is used in the market for this and other digital currencies. There are no entry restrictions, it is decentralized (no controlling power) and security is guaranteed by the validation of all members(network nodes).

PRIVATE BLOCKCHAIN

Also called permissioned blockchain, it follows the opposite direction of the public blockchain network, with an access permission model given by a controller point. It is the ideal blockchain for companies that want to adopt the technology in their operations.

BLOCKCHAIN PROTOCOLS

Consensus protocols are algorithms with a series of rules shared among the nodes of a blockchain so that together they establish the structure of how it works, validate each transaction on the network, and keep the network secure.

PoW – PROOF OF WORK

It is the first and best known crytocurrency mining and transaction validation protocol. It consists of solving highly complex mathematical problems through large investments in computational resources and energy.

PoS – PROOF OF STAKE

It was created as an alternative to POS and is based on the concept of coin staking: miners wager cryptocurrencies as a way to beat block validations. It is an increasingly popular mining alternative, with much less use of physical resources and energy,

PoA – PROOF OF ACTIVITY

It is the protocol used in cryptocurrencies and other crypto-assets that ensures that all transactions on a blockchain are genuine and that all network nodes (computers) always reach a consensus, without the transaction not being able to be executed.

PoB – PROOF OF BURN

It is a protocol where digital currencies are intentionally burned by miners who, without investing in high levels of hardware and computing resources and, demonstrate their commitment to the network and gain the right to mine and validate transactions.

PoC – PROOF OF CAPACITY

Also known as proof of space, in this low computational and energy consumption protocol, network participants temporarily provide a portion of free space on their hard drives as a way to earn the right to mine and validate blocks.

PoET - PROOF OF ELAPSED TIME

PoET – PROOF OF ELAPSED TIME

In this protocol, the algorithm generates a random timeout for each network point, which will go into hibernation. The node with the shortest waiting time will be activated first and will validate the next block. This protocol is specifically intended for private blockchains.

OTHER TERMS FROM THE BLOCKCHAIN WORLD

SMART CONTRACT

Self-executing, encrypted digital files that play the role of electronic versions of contracts with all the conditions to be fulfilled, whether in cryptocurrency transactions or in the offering and trading of tokenized goods.

Want to learn more about smart contracts?

MINING

Process responsible for putting cryptocurrencies into circulation on a blockchain so that they can be transacted. There is no authority that controls this emission – everything is done by consensus algorithms, the protocols, in the various modalities we saw before.

MINING POOL

Groups of miners within a blockchain that come together to share computing resources and energy expenditures to mine and validate cryptocurrencies. The goal of these groups is to reduce individual costs and share gains equitably.

NODE

Every point that is part of a blockchain network-every computer that seeks to mine and validate transactions.

P2P – PEER-TO-PEER

A communication process where each node (point) functions both as a client and as a server in data transfers, eliminating the presence of a central server. It is the form of transmission used for cryptocurrency purchases.

ICO – INITIAL COIN OFFERING

Companies offer tokens or cryptocurrencies on the market in order to raise funds. It is held on a blockchain, can be paid for with digital or fiat currency, and, unlike public stock offerings, is not regulated by the CVM.

HASH FUNCTION

It is an algorithmic function used to map data of any size to a sequence of fixed size. Used in information security, digital signatures, and message authentication, the blockchain generates unique identifications of the transactions performed.

TOKEN

Digital representation of the value of a tangible or intangible asset, right or obligation, with the purpose of offering it to the market for acquisition or investment. Specialized companies can generate tokens for stocks, futures rights, receivables, and other items.

OMMER (UNCLE) BLOCKS

Blocks created and submitted for validation simultaneously by two or more network points, but only one will be added to the chain. Ommer blocks can be called orphan blocks and mining them offers a lower payoff, depending on the network used.

NONCE

A random, unique number used in authentication protocols to prevent old hashes from being reused and thus avoid replay attacks on the network.

FORK (DIVISION)

A situation that can occasionally occur on a blockchain when it splits into two separate paths and two miners find a new block at the same time. This causes the network to split and the developers will have to fix the problem.

NOTHING-AT-STAKE PROBLEM

It literally means “nothing to bet on” and is an issue that can occur on networks that use the proof-of-stake protocol, when there is a fork.

NOTHING-AT-STAKE PROBLEM

ON-CHAIN GOVERNANCE

The process of managing and deploying changes to a cryptocurrency blockchain, including the rules for instituting changes themselves, which are encoded in the network protocol. Allnodes vote to agree or reject the proposed change.

HYPERLEDGER

Open source, collaborative effort composed of global leaders in various industries with developers aiming to spread blockchain technology and meet the demands of markets, such as scalability and support of private transactions.

HYPERLEDGER COMPOSER

Business-oriented toolkit that allows you to create open source blockchain applications and increase collaborations between business networks and organizations.

HYPERLEDGER COMPOSER

Business-oriented toolkit that allows you to create open source blockchain applications and increase collaborations between business networks and organizations.

HYPERLEDGER FABRIC

Free software project to develop modular blockchain, the dominant enterprise blockchain standard. It is a distributed, open, and proven platform that allows control of data sharing between known network points.

MSP (MEMBERSHIP SERVICE PROVIDER)

Service that issues and manages the digital identities of all peers (points) in the Hyperledger Fabric. These activities are performed based on the digital signature methodology used in public key infrastructure (PKI) organizations.

PKI – PUBLIC KEY INFRASTRUCTURE

Public or proven organization that manages the issuing of public keys, mediates the trust and credibility that parties must have with digital certificates in their transactions, with the main goal of protecting devices and people from data misuse.

OAUTH PROTOCOL

Open access authorization protocol used to allow users to access third-party sites from their Google account credentials. The goal is to reduce the user’s time with access routines and strengthen the interaction between different applications.

BLOCKBR Digital Assets é uma fintech que une a inovação tecnológica e o conhecimento digital para transformar ativos físicos em digitais, no processo de tokenização de ativos.

The offer of tokenized physical and financial assets, both current and new, is democratic and decentralized, which makes investing safer, simpler and more efficient.

We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.

Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?

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