Blockchain Terms

Below is a list of blockchain terms added by us and by our readers. If you have a question about one of these terms and would like to know more, drop us a line. If you would like to add a term or think there is an error, we want to hear from you.

 

 

Blockchain Term Glossary

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Blockchain Terms

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
There are 19 names in this directory beginning with the letter P.
Peer to Peer (P2P)    
A traditional model for computing is to have a single server or set of servers that delivers content to multiple users. Peer to Peer computing changes that model. Rather than have a single server, think of content living on many computers in a shared environment where they are not directly connected to each other and, if one computer fails, all of the other computers with that content would still be able to serve it to users. This is called "decentralized" since all of the content is not stored in one single place and can be delivered to whoever asks for it, even if some of those computers are not available. Redundancy and computing power are now distributed across multiple peers.
Permissioned blockchains
Permissioned blockchains require access to be granted in order to access or interact with the blockchain. Authority is granted to nodes or other entities who have the ability to allow or deny access to the network. Permissioned blockchains can also be private and typically have less transparency and centralized governance. This type of blockchain can be useful where blockchains interact with business operations. 
Permissionless blockchains
A permissionless blockchain is a public blockchain where no permission is required to join or interact with the network. The blockchain is available to anyone and is transparent and decentralized. Voting is equally distributed between all network participants. Bitcoin and Litecoin are examples of permissionless blockchains.
Plasma
Similar to the Lightning Network for Bitcoin, Plasma is the Layer 2 concept for Ethereum focused on improving transaction speed to increase scalable viability.
Pragma(s) or Pragma-line    
The same definition in programming, Pragma refers to instructions to the compiler. In the case of crypto, Pragma refers to the specific version a smart contract will use.
Private Blockchain    
Usually falling into the Permissioned Blockchain class, a Private Blockchain has complete control over who is allowed to interact with that blockchain. Rather than use a PoW or PoS consensus model, a Private Blockchain utilizes a system known as "Byzantine Fault Tolerant (BFT)", which is not a trustless system making the BFT system less secure.
Private Currency
Currency issued by a non-governmental agency is considered private currency. Cryptocurrency is still technically labeled "Private Currency" since most governments will not officially recognize crypto as currency. Doing so would purportedly diminish the value of fiat currencies. 
Private Key
In the world of cryptography and cryptocurrency, a private key is what allows access to funds in your wallet. A private key is an encrypted set of data that is highly secure. When matched with a public key, it opens the door and allows authorized access to data kept behind the locked door. It is imperative that any private keys be kept safe and inaccessible from the outside world. Do not send your private key to anyone as this grants them access to your crypto funds. 
Proof of Activity    
This is another consensus algorithm that combines Proof of Work and Proof of Stake concepts and, based on successful completion of the required work in the Proof of Activity algorithm, authorizes reward payments to stakers on that blockchain.
Proof of Authority
Identity based consensus algorithm that secures blockchains by validating nodes based on reputation rather than staking coins. Blocks and transactions are validated by preapproved participants on the chain acting as moderators rather than using coins as a means to purchase masternodes and validating transactions via traditional PoS systems. This is especially effective in private networks where trusting a node based on identity is more secure. 
Proof of Burn    
Burns are the elimination of coins on a blockchain. This is done to reduce supply or eliminate supply given back to the issuing organization depending on the structure. A miner will send coin to a pre-assigned burn address and that miner will receive a reward based on Proof of Burn.
Proof of Capacity
Instead of using computing power (PoW) or a stake in coins (PoS), PoC (Proof of Capacity) is a consensus algorithm that enables miners to use their available hard disk drive space to determine mining rights. PoC stores potential hashing solutions on the HDD prior to actual mining so the bigger the list that can be stored, the faster the solution and higher the probability of earning the reward.
Proof of Elapsed Time
The Proof of Elapsed Time (PoET) is a consensus algorithm where nodes generate a random time period and then sleep during that period. The first to wake and submit the block, is the winner of the block.
Proof of Stake (POS)
A blockchain can require that a masternode owner holds a predetermined amount of coin to "purchase" a masternode. This is created in the governance rules of that chain. The masternode owner then begins earning rewards by processing transactions with that masternode and earning transaction fees. The more masternodes, the more rewards. This is known as the Proof of Stake consensus algorithm. 
Proof of Work (POW)
A miner buys hardware designed to solve mathematical problems in the fastest time possible to verify a transaction and earn a block reward. The faster the solution, the more block rewards earned. Mining hardware evolution for speed of processing is historically CPU, GPU and ASIC mining devices with each being progressively faster. This process is the Proof of Work consensus algorithm.
Protocol
For crypto, protocol is the basic set of rules by which a process is executed. The most important application of this term pertains to how underlying blockchain governance and rules are executed and whether the rules are sufficient or consistent with the objectives of the blockchain network.
Public Address
The cypher of the public key is also known as the Public Address. The Public Key is the entry point to a Private Key for any transaction. A public address is the translation of the public key which is a long string of text.
Public Key
When a transaction is generated between two parties, each party generates a private key. Because each party does not want the private key exposed, a matching public key is generated to send to the other party. The other party executes the transaction using the public key and the transaction is matched for final execution. The public key is a long string of text often translated cryptographically into a public address.
Public Key Cryptography 
This is the act of creating a relationship between a public key and a private key. It is not possible to determine the private key by knowing the public key, but the relationship between the public key and private key allows a transaction to complete. In essence, a public key turns the private key in the lock allowing the lock to open.
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