Blockchain definitions

Words and definitions related to blockchain.

Blockchain API development involves the creation of tools and software that allow users to interact with blockchain networks for various purposes, such as managing transactions, executing smart contracts, and querying blockchain data. As a developer, you may come across several terms related to blockchain API development, which can initially be confusing.

To help you become familiar with the terminology used throughout the Guides, we have put together a list of key concepts and technologies related to blockchain API development.

Account (Also referred to as DLT account or blockchain account): In the context of DLT, an account refers to an identity on the DLT network. It is usually identified by a particular address and controlled by a private key or smart contract code. Accounts can hold cryptocurrency and other assets. Whereas private key-controlled accounts can be contained within wallets.

Address: An alphanumeric string corresponding to a unique DLT account. Addresses are used to enable the identification of a sender or receiver of tokens on a DLT network.

Anti-Sybil Mechanism: The protocol or algorithm used by a consensus mechanism to ensure that no single user gains an advantage by running multiple DLT nodes.

Blockchain: A transaction ordering model, where transactions to update a distributed ledger are organised into a chain of blocks.

Blockchain explorer: A web-based tool or interface that allows users to explore and view transactions, addresses, and blocks on a blockchain. It provides transparency and visibility into blockchain data.

Blockchain network: A particular instance of a blockchain. A blockchain network is also a DLT network.

Chaincode (Hyperledger Fabric): Analogous to smart contract. Initialises and manages ledger state through transactions submitted by applications in Hyperledger Fabric, a permissioned blockchain platform.

Consensus mechanism: The protocol or algorithm used by a DLT network to achieve agreement among nodes on the validity of transactions and the state of the ledger. Each consensus mechanism must include an anti-sybil mechanism such as Proof of Work (PoW) or Proof of Stake (PoS), as well as additional rules on how to format and process the data. Common consensus mechanisms include Nakamoto Consensus and Practical Byzantine Fault Tolerance (PBFT).

Cryptocurrency: A digital or virtual currency that uses cryptography for security. Bitcoin (BTC) and Ethereum (ETH) are examples of popular cryptocurrencies.

DApp (Decentralized Application): An application built on a blockchain platform, such as Ethereum. DApps will interact with a DLT network via transactions, read requests and subscriptions, and typically will use smart contracts to execute code on-chain.

Decentralisation: The distribution of control and decision-making across a network of nodes, reducing the reliance on central authorities. Decentralisation is a core principle of distributed ledger technology.

Distributed Ledger: A ledger that is maintained in a distributed manner.

Distributed Ledger Technology (DLT): The technology required to implement a distributed ledger.

DLT network: A particular instance of a distributed ledger.

DLT protocol: Communication and processing rules required to implement the distributed ledger.

ERC (Ethereum Request for Comment): A set of standards or proposals used to define and implement various functionalities and features on the Ethereum blockchain. Examples include ERC-20 (fungible tokens) and ERC-721 (non-fungible tokens).

Quant smart token (QRC): QRC is the term we use for our chain-agnostic, secure, smart contracts.

EVM (Ethereum Virtual Machine): A decentralised and Turing-complete virtual machine that executes smart contracts. It provides a secure and isolated environment for running code on the network.

Faucet: A service that provides free cryptocurrency tokens for testing purposes. Faucets are commonly used on testnets to distribute tokens to developers and users for experimentation.

Fork: A split in a blockchain network, resulting in two separate chains with different rules and histories. Forks can be temporary, where this split is resolved overtime according to the rules of the DLT protocol. Or the fork can be permanent. In the permanent case, there are soft forks (backward-compatible) or hard forks (not backward-compatible). Hard forks require DLT node software to be upgraded in order to join the upgraded blockchain network.

Fungible Tokens: Tokens or assets created on a distributed ledger that can be altered once they are issued. Fungible tokens are often used to represent digital currencies.

Gas estimation: Services that estimate the gas cost (transaction fee) for executing transactions or smart contracts on networks like Ethereum, helping users and developers optimise their gas usage.

Gas: The fees paid (in native cryptocurrency) by users to interact with a DLT network that is using the Ethereum Virtual Machine.

Gas limit: The maximum amount of computational work (gas) allowed for a single transaction or smart contract execution. It prevents infinite loops or excessive resource consumption on the blockchain.

Gas price: The amount of cryptocurrency (usually in Ether) a user is willing to pay for each unit of computational work (gas) required to execute a transaction or smart contract on a blockchain.

GWEI (Giga-Wei): A unit of measurement for the cost or fee associated with executing transactions or smart contracts on the Ethereum blockchain. It represents 1,000,000,000 Wei.

Immutable ledger: A key feature of distributed ledger technology where once data is recorded successfull on the network, it cannot be altered or deleted. This immutability ensures data integrity.

Ledger: A database where all data is (directly or indirectly) assigned to and owned by accounts.

mDApp: A multi-chain blockchain application.

Multichain APIs: Interfaces that allow applications to interact with multiple DLT networks through a single, unified API, facilitating cross-chain operations and integrations.

Mainnet: The primary DLT network where real cryptocurrencies are transacted and recorded. It is the live and production-ready DLT network.

Mining: The process of adding new blocks to a blockchain through the solving of complex mathematical puzzles. Miners are rewarded with cryptocurrency for their computational efforts.

Node (also referred to as a DLT node or blockchain node): A service that participates in a DLT network by running the DLT protocol and storing a complete or partial replica of the distributed ledger. Nodes can validate transactions to help secure the network.

Nonce: A unique number associated with each transaction sent from addresses on accounts-based blockchains. It prevents double-spending by ensuring that transactions are processed in the correct order.

Non-fungible tokens: tokens or assets created on a distributed ledger that cannot be altered once they are issued. Non-fungible tokens are often used to represent digital or physical assets.

Private permissioned network: A network where a node needs special permissions to join the network (in order to send and verify transactions). Permissions are also required to read the data on the network.

Public permissioned network: A network where a node needs special permissions to join the network (in order to send and verify transactions). But no permissions are required to read the data on the network.

Public permissionless network: A network where any node can join at any time.

Overledger flows: Overledger Platform's tools and interfaces for creating, managing, and transferring tokens and digital assets on a blockchain platform.

Tokens: A digital asset that runs on a permissioned or permissionless DLT network.

SDK (Software Development Kit): A set of tools, libraries, documentation, and code samples that enable developers to create software applications on a specific platform, including blockchain platforms.

Sender: The entity or user initiating a transaction on a DLT network. The sender's private key is used to sign and send transactions.

Smart contract: Self-executing contracts with the terms of the agreement directly written into code. Smart contracts automatically execute and enforce agreements when predefined conditions are met.

Smart contract interaction APIs: Interfaces designed for deploying, invoking, and interacting with smart contracts on DLT networks.

Testnet: A separate DLT network for testing and development purposes. Testnets allow developers to experiment with smart contracts and transactions without using real cryptocurrency.

Transaction: A digital record of a transfer or interaction on a blockchain. Transactions can involve the transfer of cryptocurrency, the execution of smart contracts, or other blockchain operations.

Wallet: A software or hardware application that stores cryptographic keys used to access and manage cryptocurrency assets associated with particular DLT accounts. Wallets enable users to send, receive, and manage their digital assets securely.

WEI (Wei): The smallest unit of cryptocurrency in the Ethereum blockchain. It is named after Wei Dai, a computer scientist known for his contributions to cryptography. 1 Ether is equal to 1,000,000,000,000,000,000 WEI.

Webhooks: Technology that automates messages and alerts sent from apps when something happens. In blockchain contexts, they notify applications about events like new transactions or blocks.