Proof of work and proof of stake consensus algorithm. To be used by Ethereum as a transition to proof of stake mining.
A ledger created and maintained in one single place without verification or validation of P2P network.
Client software is local (on your machine) and accesses any "server" point of information or data including blockchain for the purpose of processing transactions or disseminating data. Typical examples of client software can include a crypto currency wallet or email program.
A digital asset whose collection represents the blockchain. A fraction of the blockchain can also be considered a "coin" or "altcoin" where that digital asset has value and is generated via an independent blockchain.
Off-line and inaccessible by any computer on or off a private or public network, a cold wallet is digital currency store where nobody can reach it for security purposes. Often a flash drive or removable media is where this information is stored. Since the data is not available a network, it keeps hackers from stealing the data. A cold wallet can even be a piece of paper with key information written on it.
Every block added to the blockchain counts as a confirmation since all nodes on the network directly or indirectly verify or confirm preceding blocks and they continue to repeat that process. For instance, if 10 blocks are added to a chain, then the previous block has 5 confirmations. The more confirmations the better since it becomes more difficult to alter or attack the block as it grows.
Consensus is when everyone agrees. For blockchain, it is when a majority of participants on a network agree about the validity of a transaction. This agreement ensures that the ledgers are consistently kept the same as each other.
The consensus algorithm is the mechanism that verifies consensus is reached on any given blockchain. It is the part of the blockchain protocol that determines block validation for chain data and then who earns the reward for that validation. Everyone participating in the validation process must abide by the rules of validation, which ensures consistent application of the algorithm.
Tokens, coins, altcoins, digital assets along with several others are the terms used to describe cryptocurrency. "Cryptocurrency" is simply the representations of digital assets. Based on mathematical and cryptographic functions, cryptocurrency is a result of the aggregation and distribution of encrypted data as it is maintained in a multi-user state. This ensures the validity and immutability of the data on a blockchain and facilitates the generation and transfer of data. This decentralized process is what makes crypto so attractive in that it cannot be manipulated by any single source such as governments or central banks. As a currency, cryptocurrency gained popularity as a completely free-market form of currency.
Cryptographic Hash Function
A string returned that is unique for each and every input. This string is used to create a digital identity or thumbprint of user input. These cryptographic hashes generate a unique, fixed-size hash value out of variable-size transaction input. There are multiple computational algorithms. Examples of cryptographic hashes include SHA-224, SHA-256, SHA-384, SHA-512, SHA-512/224, and SHA-512/256. These are all part of a family of hash functions, but they all differ slightly in how they create output.
In its simplest form, according to Oxford, Cryptography (n) is the "art of writing or solving codes". For blockchain, it is the art of creating hash sets that contain encrypted data and/or transactions in each block, or set of encrypted data. It is a method for securing that data in a public environment. To decipher the data, you need the proper matching key to unlock it and make it readable. Additionally, there are different "types" of keys. Bitcoin uses symmetric-key cryptography and "addresses" or unique identifiers generate private keys and match these keys to public keys on the chain to post or read data from the blockchain.