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Blockchain Terminologies

1. Block

A block is an individual transaction or piece of data that is being stored within the blockchain.

2. Blockchain

A blockchain is continuously growing chain (list) of blocks (records), which are linked in the order of which they occurred. We can further define it as , an accurate and permanent record of the the transactions that have been verified and stored in chronological sequence.

3. Blockchain Network

Can be used interchangeably with Blockchain, they represent the entire blockchain (structure and network)

4. Participant

A client or simply a computer that owns a copy of blockchain and verifies transaction across the network.

5. Decentralization

Simply means there will be no central governing system, where participants will work together to validate the transaction together. At least 51% of participant have to validate the transaction in blockchain.

6.Hash

A fixed-length string of a varying combination of letters and numbers produced from a specific input of arbitrary size. Hash is generated using Hash functions.

7. Hash Function

A cryptographic deterministic function that takes in an input of a random size, performs hashing on this input, and generates a random output of a fixed size, also known as the hash.

8. Genesis Block

The genesis block is the first block on the blockchain and it is typically hard-coded into the blockchain structure. Being the first block on the blockchain, it does not have a link to a previous hash. Things to remember here is complete block is hard-coded along with previous hash.

9. Deterministic

The same input will always produce the same output, but that output cannot produce the original input.The hash functions used in the blockchain are deterministic.

Block Properties

  • Timestamp: The time when block is created, that determines the location of it on the blockchain.
  • Data: The information to be securely stored in the block. This can be anything like financial transaction data.
  • Hash: A unique code produced by combining all the contents within the block itself with the help of hash functions. This is also known as a digital fingerprint.
  • Previous Hash: Each block has a reference to its previous block with previous hash property. This is what makes the blockchain unique because this link will be broken if a block is tampered with.

Transaction Properties

1. Transaction

Transaction is an exchange of value among participants on the blockchain.

2. Unconfirmed Transaction

Blocks and Transactions that are yet to be verified.

3. Consensus:

It is the process of agreeing to the transactions on the blockchain network. A random participant broadcast their blocks to the entire network and participants need to verify it. If more than 51% participant agree with the block, a consensus is said to be reached.

4. Immutable

Something whose records can not be changed. The records in the blockchain can not be altered. In other words, the records are said to be immutable.

5. Recalculating Hashes

Replacing the incorrect has with a correct one to validate the chain is called recalculating hashes.

6. Proof-of-work

A security feature in blockchain to prevent attackers from easily taking over the blockchain. It is the clever technique that ensures

  • It makes difficult for participant to modify blocks and recalculating hashes.
  • It is based on bulletproof cryptography instead of anonymous participant to verify transactions.

7. Miners

Miners are special participants who calculate the Proof-of-work to mine new blocks.

8. Nonce

A number to be guessed by miners which when combined with the block produces an acceptable hash.

9. Longest Chain

The most trusted chain with the largest amount of computational work done in calculating the Proof-of-Work.