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 12 names in this directory beginning with the letter S.
A derivative based on the name of the founder of Bitcoin, Satoshi Nakamoto, the Satoshi is the smallest fraction of Bitcoin one can possess - One-hundred millionth of a Bitcoin (.00000001). The principle economic theory behind Bitcoin is that, over time, it will continue to gain. The reason is that, unlike fiat, no more Bitcoin will be created after the 21,000,000 mark. Supply is finite so as the value increases, users will divide downward rather than add to the overall supply.
Satoshi Nakamoto
The individual or pseudonym of the person, people or organization that created Bitcoin in 2009. Based in theory on the concept of a free market, peer 2 peer network of currency and the resolution of political influence on economic systems, Nakamoto worked to find a cryptographic solution. In 2008, a paper outlining Bitcoin was issued and the first software was released a year later. 
The ability to maintain performance standards as the user base grows is called scalability. From a crypto perspective, scalability means the acceptance of additional network traffic without degradation to transactional processing. Seemingly simple, this is a complex balance between processing speed, accuracy and network growth. 
Often mispronounced, "ess-crypt" is a password based key derivation function designed to make it cost ineffective to conduct large-scale hardware attacks because too much memory would be required to carry out the attack. Created by Colin Percival for Tarsnap, this is a mining algorithm that makes it, unlike SHA-256 (Bitcoin), more difficult to apply ASIC miners to mine because the faster you mine, the more memory is required. 
Security Token Offering (STO)
Tokenization of stocks and bonds is a new buzzword in the crypto space. Aka STO, or Security Token Offering, the difference is the idea of a crypto currency backed by an asset such as stocks, bonds or other tangible assets. Much how the dollar started out when it was backed by gold. An STO is also regulated much the same as a stock.
A cryptographic hashing algorithm used as the encryption platform for cryptocurrencies such as Bitcoin and its derivatives. SHA is an acronym for Secure Hash Algorithm with a 256-bit key. It is a member of the SHA-2 family, a standard adopted in 2016.
Blockchain is data. Data processing is diametrically opposed to efficiency as the size of the data set grows. Sharding is a method developed in the mid to late 1990's to break up centralized databases so they would perform more efficiently. It is the logical division of data. As it applies to the blockchain, sharding is the breaking up of blocks so they can be read more quickly and transactions processed faster. 
Smart Contract
When business rules are programmatically incorporated into an agreement for automatic execution based on some measure of performance between two or more parties on the Ethereum blockchain, there exists a smart contract. A smart contract is immutable once deployed. Smart contracts, unlike coins not on the Ethereum chain, can be manipulated based on business requirements. This makes them desirable in the business world where contracts can be programmed to perform a function in exchange for payment.
Soft Fork
While a soft fork is technically still a chain split, it is mostly a rule change and the split is between machines following legacy blocks versus those following the new fork. The soft fork will invalidate a block previously considered valid if the rules are broken and the soft fork will also allow the recognition of the new fork once the soft fork is activated. In a battle to adopt the soft fork chain over the legacy chain, the soft fork typically wins. 
Solidity is a programming language for developing smart contracts on the Ethereum blockchain. Designed for use in the EVM (Ethereum Virtual Machine), Solidity is an object-oriented language with loose resemblance to C++, JavaScript and Python that supports libraries, inheritance and user-defined types. It allows the creation of all types of smart contracts for many different business use cases.
As its name implies, it is a coin with the objective of stabilizing price in a world of crypto volatility. While some might find wild swings attractive, crypto use in an economic environment requires some stability and predictability. That is the objective of any coin classified as a stablecoin. To smooth price swings, stablecoins are backed by assets and can be pegged to any commodity or currency mechanism. Change in coin pricing is reflective of change in asset pricing.
Stale block
Orphan blocks and stale blocks are not the same. Orphan blocks belong to a shorter chain and are left there to wither away. Stale blocks are valid and are on the longest chain but are not active due to a conflict or multiple blocks being mined at the same time. The miners who continue to work on an inactive block are working on a stale block that is not eligible for rewards. 
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