Flashcards

Week 10: Cryptocurrency and Blockchain Technologies

Blockchain


A decentralized digital ledger that records transactions across many computers in a secure and transparent way.

Cryptocurrency


Digital or virtual currencies that use cryptography for security and operate independently of a central authority.

Bitcoin


The first and most widely recognized cryptocurrency, created by an anonymous entity using the pseudonym Satoshi Nakamoto.

Ethereum


A decentralized platform that enables smart contracts and decentralized applications (DApps) to be built and run without downtime or fraud.

Smart Contracts


Self-executing contracts with the terms of the agreement directly written into code, executed on blockchain platforms like Ethereum.

Altcoins


Any cryptocurrencies other than Bitcoin, such as Ethereum, Ripple, and Litecoin.

Mining


The process of validating transactions and securing the network by solving complex mathematical problems, which adds new blocks to the blockchain.

Hash Function


A function that converts an input (or ‘message’) into a fixed-size string of bytes, typically for the purpose of storing data in hash tables or for cryptographic applications.

Proof of Work (PoW)


A consensus algorithm in blockchain networks that requires participants to perform computational work to add a new block to the blockchain.

Proof of Stake (PoS)


A consensus algorithm in which the creator of a new block is chosen in a deterministic way, depending on the user’s wealth, also known as stake, in the cryptocurrency.

Wallet


A digital tool that allows users to store, receive, and send cryptocurrencies. Wallets can be software-based or hardware-based.

Public Key


A cryptographic key that is shared publicly and used for encrypting information that can only be decrypted with the corresponding private key.

Private Key


A cryptographic key that is kept secret by the owner and is used to decrypt information encrypted with the corresponding public key.

Token


A unit of value issued by a project or organization, often on a blockchain, which can represent assets, voting rights, or access to services.

Initial Coin Offering (ICO)


A fundraising method where new projects sell their underlying crypto tokens to investors in exchange for capital, typically in Bitcoin or Ethereum.

Decentralized Finance (DeFi)


A movement that leverages decentralized networks and blockchain technology to transform old, centralized financial products into trustless and transparent protocols that run without intermediaries.

Stablecoin


A type of cryptocurrency that is designed to have a stable value by being pegged to a reserve asset, such as the US dollar or gold.

Fork


A divergence in the blockchain protocol, which may result in a split in the blockchain, creating a new version of the blockchain.

Decentralized Autonomous Organization (DAO)


An organization that is fully autonomous and operates through smart contracts on the blockchain, without centralized control or governance.

Ledger


A record-keeping system that is used to store transactions in a blockchain. Each node in the network has a copy of the ledger.

Gas


The fee required to conduct a transaction or execute a smart contract on the Ethereum network.

dApp


Decentralized application that runs on a blockchain or peer-to-peer network of computers, rather than being hosted on centralized servers.

Consensus Algorithm


A protocol that ensures all nodes in a blockchain network agree on the current state of the ledger. Common examples include Proof of Work (PoW) and Proof of Stake (PoS).

Mining Pool


A group of cryptocurrency miners who combine their processing power over a network to work on solving blocks together, increasing their chances of earning block rewards.

Proof of Authority (PoA)


A consensus algorithm where the identity of the block validators is known and trusted by all participants in the network.

Cold Wallet


A cryptocurrency wallet that is not connected to the internet, used for storing cryptocurrencies securely offline.

Hot Wallet


A cryptocurrency wallet that is connected to the internet, often used for active trading or transactions.

Merkle Tree


A binary tree in which every leaf node is a hash of a data block, and every non-leaf node is a hash of its children, commonly used to efficiently verify the integrity of data in blockchain systems.

Tokenization


The process of converting rights to an asset into a digital token on a blockchain.

Peer-to-Peer (P2P)


A decentralized network where each participant can act as both a client and a server, sharing resources directly with each other without the need for an intermediary.

Airdrop


The distribution of tokens or coins to numerous wallet addresses, typically as a marketing strategy or to promote a new cryptocurrency.

Whitepaper


An authoritative report or guide that addresses issues and solutions regarding a specific topic. In cryptocurrencies, a whitepaper typically outlines the vision, purpose, and workings of a new blockchain project.

Blockchain Explorer


A tool that allows users to view transactions, blocks, addresses, and other details of a blockchain network in real-time.

Halving


An event in a cryptocurrency’s blockchain that reduces the reward for mining new blocks by half, commonly associated with Bitcoin.

Crypto Wallet Address


A unique identifier used to receive and send cryptocurrencies, usually in the form of a string of letters and numbers.

Token Burn


The process of permanently removing tokens from circulation, often to reduce supply and increase scarcity.

Private Blockchain


A type of blockchain network that is controlled by a single organization or group, with restricted access and permission requirements for joining the network.

Public Blockchain


A type of blockchain network that is open for anyone to join and participate, with transparent and permissionless access.

Hybrid Blockchain


A blockchain that combines features of both private and public blockchains to leverage the benefits of both centralized and decentralized approaches.

Cryptocurrency Exchange


A platform that facilitates the trading of cryptocurrencies for other digital assets or fiat currencies.

White Hat


An ethical hacker who helps improve security by identifying vulnerabilities in software or systems, often in the context of blockchain and cryptocurrency platforms.

Sharding


A database partitioning technique that involves breaking up a database into smaller, more manageable pieces to improve scalability, often discussed in the context of blockchain networks.

Lightning Network


A second layer payment protocol that operates on top of a blockchain (such as Bitcoin) to enable faster transactions with lower fees.

Hard Fork


A permanent divergence in the blockchain protocol, often resulting in the creation of a new cryptocurrency or version of the blockchain.

Soft Fork


A backward-compatible upgrade to the blockchain protocol, where the new rules are compatible with the old rules, allowing older nodes to validate transactions on the network.

Digital Signature


A mathematical scheme for verifying the authenticity and integrity of digital messages or documents, commonly used in blockchain transactions.

Multi-signature Wallet


A type of digital wallet that requires multiple private keys to authorize a transaction, providing an additional layer of security.

Wrapped Token


A tokenized version of a cryptocurrency that is locked on one blockchain and represented on another blockchain, often to enable cross-chain functionality.

Cross-chain Interoperability


The ability for different blockchain networks to interact and communicate with each other, often through the use of bridges or other interoperability solutions.

Hash Rate


The speed at which a blockchain network can process cryptographic hashes, often used as a measure of mining power in proof-of-work systems.

Quantum Computing


A field of study that explores the use of quantum-mechanical phenomena to perform computations, potentially impacting the security of cryptographic systems in blockchain technology.