Summary of Blockchain Computer Glossary

This document provides a glossary of key terms related to blockchain technology, making it easier for beginners to understand the concepts associated with it.

Key Concepts

1. Blockchain

• Definition: A distributed ledger technology that records transactions across multiple computers.
• Example: Bitcoin transactions are recorded on a blockchain.

2. Node

• Definition: A computer that participates in the blockchain network.
• Example: Each user's computer that holds a copy of the blockchain.

3. Cryptocurrency

• Definition: Digital or virtual currencies that use cryptography for security.
• Example: Bitcoin, Ethereum, and Litecoin.

4. Smart Contract

• Definition: Self-executing contracts with the terms of the agreement directly written into code.
• Example: An agreement to automatically transfer ownership of a digital asset once payment is received.

5. Decentralization

• Definition: Distribution of authority away from a central authority to reduce risk and increase trust.
• Example: In a decentralized network, no single entity has control over the entire blockchain.

6. Consensus Mechanism

• Definition: A process used to achieve agreement on a single data value among distributed processes or systems.
• Example: Proof of Work (PoW) and Proof of Stake (PoS) are common consensus mechanisms.

7. Hash Function

• Definition: A function that converts an input into a fixed-size string of bytes, which appears random.
• Example: Bitcoin uses SHA-256 as its hashing algorithm.

8. Token

• Definition: A unit of value that is issued on a blockchain, often representing assets or utilities.
• Example: Utility tokens are used to access a service or product within a blockchain ecosystem.

Conclusion

This glossary serves as a foundational resource for anyone interested in blockchain technology. Understanding these terms is crucial for grasping how blockchain operates and its potential impacts on various industries.