ASIC (application specific integrated circuit) is a specific circuit with the ability to perform hashing calculation with high speed (billions of hashing calculations per second) and is used for extracting blocks in PoW based blockchain networks.
Accidental fork refers to a situation when two miners accidentally find the next block at the same time. In this scenario, two different branches will be created in blockchain network. After that, the longer branch wi9ll be recognized as the main branch and the other branch will be disqualified. These blocks are called orphan blocks.
51% attack is a situation where one or multiple miners in a blockchain network (like Bitcoin) gain more than 50% of the computing power and add their own blocks to the network or send back spent tokens or coins to their own address again.
Blockchain is a distributed ledger which includes a chain of information blocks. These blocks are created based on a special mechanism called mining and are added to the existing chain. Created blocks in the chain are impossible to change and no one can tamper with the information inside them. Each block contains the address of the previous block and the next block. In ordinary blockchains like Bitcoin everyone can see the information inside each block.
Block height is the number of each created block. For example, 10 means that the current block is the 10th block after the first block (genesis block). The genesis block’s block height is usually zero.
Block reward is the amount paid to a miner if he/she successfully finds and registers the last block in a blockchain. Reward can be a specific amount of the mined coins or it also can be the fees of transactions stored in that block. Needless to say, the number of transactions in each block and their fee and the conditions for each transaction will be determined in that blockchain’s protocol.
Confirmation shows that a transaction in blockchain network has been performed successfully. This action is performed in during extraction process and confirmed transactions cannot be canceled. More confirmation for a transaction means less chance for refund. For example, in Bitcoin network, it will be almost impossible to cancel the transaction after 6 confirmations.
Cryptography is a method used for encrypting outgoing information. encryption is based on mathematics. In blockchain technology, encryption is used to create public and private keys and transaction signatures in the network. Public keys are used for receiving assets and private keys are used for sending assets and creating transaction signatures.
DAO(Decentralized Autonomous Organization) is an independent organization for investing in new businesses. In Ethereum network, DAO code is an open source code. This organization has been used to collect funds for many projects in 2016. Although these funds became the subject of hacking and theft in that year and this led to the creation of a fork in Ethereum.
Distributed ledger is a data structure distributed between different nodes(sites) or countries. Recording information is done based on a specific sequence on this data structure. Based on his ledger control methods, these ledgers divide into two categories ((with license or without license)).
Difficulty in mining procedure (proof of work) shows the level of difficulty of the calculation which results in finding a new block and adding it to the network. This parameter, based on the network’s protocol, can be modified (increased or decreased). Difficulty in Bitcoin network is modified after mining 2016 new blocks.
double spend is a scenario in network where a person sends one transaction to two different destination. After each confirmation made by the network, the possibility of double spend decreases significantly to the point where after 6 confirmation(in Bitcoin network), the possibility of double spend reaches close to zero.
EVM is a touring machine in ethereum network which allows users to execute their desired EVM code from anywhere. All nodes in the ethereum network run on EVM. EVM is the spot where all ethereum smart contracts are recorded an executed. Preventing DoS attacks is one of the advantages of this project.
Cryptocurrency exchanges are sites where people can exchange their cryptocurrencies into other cryptocurrencies or into routine currencies. For example, purchasing or selling Bitcoin in exchange for Dollar. Exchanges can be centralized (managed by a corporation or a person) or decentralized (asset management handled by the users themselves).
A technical standard for creating tokens based on a smart contract on Ethereum platform. This standard focuses on security above all. These tokens are defined in Ethereum network based on event handling mechanism and Ethereum transactions to reduce the possibility of the loss of tokens. (for improving the standard, ERC20 was created.)
Hash is a function created based on mathematics to create an output with fixed length from an input with variable length. One of the advantages of hash function is producing a unique output. This advantage is used to generate digital signature and validation in a blockchain network.
Halving is the process of reducing the reward for mining a block to half. This mechanism can be defined in every cryptocurrency’s protocol and with it, the amount of coins injected in network. In the beginning of Bitcoin’s creation, the reward for finding a new block was 50 Bitcoins which has been in cut in half every four years. Right now the reward for finding a new block in Bitcoin is 12.5 Bitcoins. In May 2020 this amount will be reduced to 6.25 Bitcoins.
Hard fork is a situation where based on changes made to the rules of block processing, upgraded nodes based on new rules, will presume the older blocks made by the old rules invalid and won’t process them anymore. In this situation, all nodes need to upgrade their software to adjust themselves with the new rules.
Initial coin offering is the process of collecting funds in the field of cryptocurrency. Usually, start-ups need funds for defining their projects and executing them. These funds are gathered by ICO and selling the tokens of those projects.
Initial token offering is like ICO with the difference that these projects don’t generate coins. Instead, they run their project on another platform like Ethereum and sell their tokens instead of coins.
Multi-signature is one of the defined traits in some blockchain protocols (like Bitcoin). It is used when more than a single signature is needed for making a transaction. One of the advantages of multi-signature is the reduced possibility of cryptocurrency theft.
Point to point is a communicational structure in decentralized networks, meaning that every user in the network is connected to at least one other user. This structure leads to the creation of a stable communication between network nodes. Bitcoin, Torrent and other similar networks use this structure.
A kind of ledger which only certain nodes and users have access to it and only they can participate in the collective agreement process. These networks, unlike a network like Bitcoin which everyone can have access to and participate in collective agreement, are used for certain projects and goals. In these networks, collective agreement is performed much faster.
Private key is a combination of words and numbers which is created by encryption algorithms based on mathematics. The owner of the private key is considered the owner of the cryptocurrency related to that certain key and can sign and perform transactions. Therefore, protecting the private key is the most important thing that all cryptocurrency owners must do.
Proof of stake is a Collective agreement mechanism. In this mechanism, each node must deposit an amount of assets (the network’s coin) in the network to be able to participate in this process. Based on the amount of the user’s deposit, a certain amount of coin can be mined.
Proof of work is a collective agreement mechanism. In this mechanism, each node participates in the process of verifying and mining based on the amount of their processing resources (like Bitcoin). The basis of this cooperation is performing extremely hard calculations for finding a mathematical solution (finding the intended hash) and any node who can solve this problem quicker and find the result, have a chance to add his/her block to the end of the chain and if the block is accepted by the network, receive the reward for mining a block.
Protocol is a collection of defined rules for specific purpose of processing information. For example, Bitcoin protocol defines the way to calculate a block, how to verify blocks and transactions and so on.
Public key is a combination of words and letters which is created by encryption algorithms based on mathematics. Public key is used for verifying transactions in a blockchain network. For receiving transactions, this key is shared with other users in the network.
Scalability is a blockchain protocol’s property which has the possibility of processing the incoming transactions based on the increasing rate of demands. In Bitcoin’s first version, one of the issues is that the network isn’t scalable. To solve this problem, developers have suggested many solutions such as lightning.
Unpermissioned ledgers are ledgers operating without the control of an organization or a person. Everyone can connect to this network and take part in the process of mining blocks and verifying transactions (like Bitcoin network).
In general, wallet is the combination of public and private keys which determines the ownership of the owner of that particular wallet and is used for sending and receiving cryptocurrencies. There are different wallets such as hardware, software, paper and they can operate online or offline.