Blockchain 101: 50 Blockchain related terms from A-Z for new crypto investors

Welcome to Bitget – the world’s fastest growing crypto derivatives trading platform.

In the following, we’ve picked up 50 key terms related to blockchain technology. If you are a new investor of crypto, we are going to make those complicated and professional knowledge  simple for you to keep up with the crypto market.

If you want to know more crypto-trading information, follow us on Bitget Academy. We are constantly providing useful information for crypto investors, so that they can enjoy better trading and a better life.

Address

String of letters and numbers which refer to the location of a particular wallet on the blockchain.

Airdrop

The distribution of a cryptocurrency coin to numerous wallet addresses on a particular blockchain. It aims at promoting and gaining new followers for a new cryptocurrency project. 

Bitget Launchpad is a platform for launching new crypto projects and airdrops. You may earn new tokens directly on Bitget Launchpad

Algorithm

A process or set of rules which is followed in calculations for solving a specific problem.

Altcoin

Altcoin is used to describe the cryptocurrency that is similar to Bitcoin.

Atomic Swap

It is a kind of smart contract technology where users can trade a cryptocurrency to another without any intermediates.

B

Bitcoin

Bitcoin is the first cryptocurrency launched in 2009, created by Satoshi Nakamoto, a digital asset that uses cryptography to control its creation and management. It provides users with the ability to send and receive digital money without any intermediaries like financial institutions.

Bitcoin Pizza

The first retail transaction in the real world was paid on May 22, 2010, by exchanging 10,000 Bitcoins for two pizzas in a pizza restaurant in Florida, marking May 22 as the Bitcoin Pizza Day for crypto-fans.

Block

Each block contains the transaction data. They are all arranged in chronological order and form a blockchain.

Blockchain

A blockchain is a distributed database that is shared among the nodes of a computer network, which means everyone can get a copy of it. It is a chain of blocks that contain information. As a database, a blockchain stores information electronically in digital format. As new data comes in, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block, which makes the data chained together in chronological order.

C

Cryptocurrency

A digital currency that is secured by cryptography which acts as a medium of transaction within a peer-to-peer (P2P) economic system without any centralized intermediates like banks. Bitcoin is an example.

Cryptography

The science of using mathematical theories to encrypt and decrypt information.

D

De-fi (Decentralized Finance)

A financial ecosystem with the help of blockchain technology does not require any intermediates such as banks and governments.

Distributed ledger technology (DLT)

A type of database shared among the network participants that without any intermediates or centralized server.

E

Ethereum

Ethereum is a decentralized computing platform. You can think of it as a laptop or PC, but it doesn’t run on a single device. Instead, it simultaneously runs on thousands of machines around the world, meaning that it has no owner.

F

Formal Verification

Using mathematically rigorous proofs to ensure certain properties of cryptographic algorithms and blockchain mechanisms

Full Node

A computer that implements the rules of a blockchain network and verifies the transactions and blocks on a blockchain.

G

Gas

The pricing mechanism of the Ethereum blockchain to calculate the operation costs of smart contracts and transaction fees.

Genesis Block

The first block recorded on the blockchain network, is also referred to as Block 0 or Block 1.

H

Hashes

A hash is the backbone of the blockchain network. In order to prevent anyone from changing the data in the blockchain, each block contains the “hash” of the previous block.

The hash of a block is unique and unrepeatable, like the fingerprint of human beings. If someone wants to change the data in a block, the hash of the block will be changed as well. 

I

Initial Coin Offering (ICO)

The fundraising of new crypto projects that will be sold publicly to investors.

Immutability

The core features of Bitcoin and blockchain technology. The data on the blockchain is unable to change or be changed. 

L

Layer 2

A secondary framework or agreement that is built on top of an existing blockchain system to increase scalability.

Ledger

A physical book or a digital computer file to store and record monetary and financial transactions. The Bitcoin Blockchain acts as a ledger to store the transaction records of the Bitcoin system.   

Lightning Network

A second layer operates on top of a blockchain, enabling increased transaction speed among participating nodes. 

M

Mainnet

A blockchain protocol where transactions are broadcast, verified, and recorded.

Mining

The verification process of transactions on the blockchain network. The transaction record will be added on the blockchain ledger.

N

Node

The participant on a blockchain network that ensures the security and integrity of the system.

Non-fungible Token (NFT)

A type of cryptographic token that represents a unique digital or real-world asset. The main feature of it is interchangeable.

O

Off-chain

Transactions that occur out of the blockchain network. Then it may be later reported submitted to the main chain.

Open-Source Software (OSS)

Software that allows anyone to use, update, and distribute it freely.

P

Peer-to-Peer (P2P)

When two or more computers are connected, carrying out transactions and sharing resources without relying on a centralized server.

Pegged Currency

A currency that the price is linked to a selected asset. For example, the stablecoin USDT is pegged to USD. The ratio of USDT : USD is 1 : 1, which means 1 USDT is equal to 1USD. 

Proof of Stake (PoS)

A consensus mechanism that rewards block validators according to the amount of coins they have at stake.

R

Ransomware

A type of software that aims at taking over your computer and threatens to destroy or reveal files unless a ransom is paid.

S

Satoshi

The smallest unit of a Bitcoin. It equals 0.00000001 BTC.

Satoshi Nakamoto

The creator of Bitcoin.

Smart Contract

Automated contracts where the details and information are recorded on a blockchain.

If some conditions are met, it will automatically execute the certain actions that are recorded on the smart contract. The smart contract is irreversible and can not be changed by anyone because of the blockchain technology.

T

Transaction ID (TXID)

TXID is a unique string of characters that labels each transaction on the blockchain.

Transactions Per Second (TPS)

The number of transactions that a blockchain network is able to process in a second

Token

Tokens are digital units issued on a blockchain. They can hold value or be exchanged for money.

U

User Interface (UI)

The interactions occur between humans and machines. It refers to how a user can interact with a machine.

V

Verification Code

Code is used to ensure the identity of someone logging in to an account by being sent to a second device.

Virtual Machine

An emulated distributed computer system is designed to replicate the features of a computer’s architecture.

Volatility

The speed of the price changes of an asset. Calculated in terms of standard deviations in the annual return of an asset over a set period of time.

W

Wallet

Used to send and receive cryptocurrencies. Different types include software wallets, hardware wallets, and paper wallets. It is usually a string of letters and numbers.

Web 3.0

Web3 is an idea for a new iteration of the internet based on blockchain technology, which incorporates concepts such as decentralization and token-based economics.

Wei

The smallest unit of Ether (ETH), which refers to gas prices

Wrapped Ether (WETH)

The ratio of ERC-20 to Ether is 1:1. Users can trade ETH to ERC-20 tokens on decentralized platforms.

Z

Zero-Knowledge Proofs

A way of proving the blockchain transaction without revealing any information about these transactions. This secured  both privacy and legitimacy of the transaction.

Zk-Snarks

“Zero-Knowledge Succinct Non-Interactive Argument of Knowledge”  is an approach to zero knowledge proofs.

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