Meaning of some terms in blockchain and cryptocurrency space

 

The digital ecosystem is exploding. The blockchain technology is pushing and expanding the explosion at a high speed.

Therefore, expect the impact in whatever industry or sector you play in.

So, it will help you to understand what some terms mean. Take time to master them for ease of understanding.

Blockchain

It is a decentralized, digital ledger of transactions that is managed and verified by a network of computers on the internet, rather than a central authority.

It means records cannot be altered by a single point or computer or block.

Distributed ledger

This is a ledger spread across a network of computers, rather than being stored in a single location.

Bitcoin

The first and most well-known cryptocurrency, which uses blockchain technology to facilitate and secure transactions. It also make transactions anonymous.

Cryptocurrency

A digital or virtual currency that uses cryptography for security and operates independently of a central bank. It is unlike fiat money.

Bitcoin is the seminal example.

Node

A computer or other device that is connected to the blockchain network and participates in the verification of transactions.

Mining

This is the process of creating new cryptocurrency by solving complex mathematical problems. This is typically done by using specialized software and powerful computer hardware.

An example of such is ASICs (Application-Specific Integrated Circuits) to validate transactions on a blockchain network.

Miners are rewarded for their efforts with a set amount of the particular cryptocurrency.

Smart contract

A self-executing contract with the terms of the agreement written directly into lines of code.

Hash

A mathematical function that takes an input or “message” and returns a fixed-size string of characters, which serves as a digital fingerprint of the input.

Digital signature

A method used to ensure the authenticity and integrity of a message or document, using encryption and a public key infrastructure.

Keep a date with me for more term in the crypto/web 3 world.

Public key or wallet address

A long string of alphanumeric characters that serves as a unique identifier for a user on the blockchain network and can be used to send and receive cryptocurrency.

We can liken this to your bank account number.