The Essential Guide to Blockchain Terminology

Bitcoin was the first project developed by using blockchain. My post is to share Blockchain keywords by using an example of Bitcoin.

blockchain glossary

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Blockchain is new technology. Understanding its principles makes you helpful to apply in your projects. 

Initially, the purpose of Blockchain development was to carry mining. In general, mining means search and find value. Usually, mining processes are two types. Those are data mining and bitcoin mining.

Blockchain Glossary

  1. Blockchain - only blocks involved. The data which was finalized stored in blocks.
  2. Bitcoin Ledger - It is a public ledger
  3. Ledger or Blockchain - The chain of blocks
  4. Functions of Blockchain - It validates each transaction, Keeps track, and verifies ownership
  5. Double Spending- It prevents duplicating the Cryptocurrency for using next time.
  6. Consensus mechanism - It is also called PoW (proof of work). This mechanism avoids double-spending
  7. Group of Transactions - When a new group of transactions created, those will be added to the blockchain.
  8. Hash - Group of transactions created a Hash. This hash will be stored along with a group of transactions in the Blockchain. Hashing is the top security mechanism in the blockchain.
  9. Mining - It doesn't create Bitcoins and alter or modify blockchain. The miners will be rewarded with Bitcoins

Blockchain types

Here are three types of Blockchains

Private blockchains

  • Private blockchains are great for developers because they allow them to test ideas without using cryptocurrency. The developers’ ideas can remain a secret as well because the data has not been published publicly.
  • Large institutions can capitalize on the security and permanence of blockchain technology without their transactions being public the way they are in traditional blockchains.

    Public Blockchains

    • Public blockchains are available to the general public. An example is buying an art piece from a vendor located in another country.

    Hybrid Blockchains

    • These are a combination of public and private.

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