Must know blockchain Terminologies.
Tags: webdev, blockchain, web3, beginners
Published: 2024-04-01 18:17:41

**Hash**: A hash is a unique string created to identify a specific set of data. It acts as a digital fingerprint for that data, ensuring its integrity and uniqueness.

**Hash Algorithm**: This is a specific computational function that takes an input (or 'message') and returns a fixed-size string of bytes. The output, known as the hash, is unique to each unique input. It's a one-way function, meaning that it's infeasible to invert or reverse the process to retrieve the original input from the hash.

**Mining**: Mining is the process of solving complex cryptographic puzzles/riddles to validate transactions and secure the blockchain network. Miners compete to find a solution to a mathematical problem, and the first one to solve it gets to add a new block of transactions to the blockchain.

**Nodes**: Nodes are computers connected to the blockchain network, each maintaining a copy of the blockchain. They participate in consensus processes and, in some blockchain models, are rewarded for mining or validating transactions.

**Block**: A block is a collection of transactions that have been verified and combined into a single data structure. Each block is cryptographically linked to its predecessor, forming a chain of blocks or a blockchain.

**Nonce**: A nonce is a number that is used only once in cryptographic communication. In blockchain, it refers to an arbitrary number used to vary the hash in block mining until a specific condition is met. It also refers to the transaction number in Ethereum transactions.

**Private Key**: A private key is a secure digital code known only to the owner, used to sign transactions. It proves the ownership of a blockchain address and allows the holder to access and spend their cryptocurrency.

**Public Key**: Derived from the private key using cryptographic algorithms, the public key is shared publicly. It allows others to verify the signature as valid, thus confirming the transaction's integrity without revealing the private key.

**Address**: The address is a hashed version of the public key. It acts as the recipient's location on the blockchain where cryptocurrencies can be sent.

**Blockchain**: A blockchain is a decentralized ledger or database that is distributed across the nodes of a computer network. It securely records transactions across many computers so that the record cannot be altered retroactively.

**Consensus Mechanism**: This refers to the method used to achieve agreement on a single data value or a single state of the network among distributed processes or systems. Consensus mechanisms ensure all participants in the network agree on the validity of transactions.

Examples include chain selection and mechanisms to prevent Sybil attacks (where one party tries to control a disproportionate number of nodes).

**Sybil Resistance**: A property of blockchain networks that protects against attackers creating multiple false identities to gain a disproportionately large influence.

**Proof of Stake (PoS)**: A consensus mechanism where the probability of validating a new block is proportional to one's ownership stake in the cryptocurrency.

**Proof of Work (PoW)**: A consensus mechanism that requires participants to perform computationally intensive work to validate transactions and create new blocks.(Mining)
It is used to deter denial of service attacks and other service abuses.

**Longest Chain Rule**: The principle that the path with the most blocks in a blockchain is considered the valid one, guiding network consensus.

**Layer 1**: The foundational layer of a blockchain infrastructure, supporting basic operations like transaction processing and consensus mechanisms.

**Layer 2**: Built on top of Layer 1, it enhances scalability and efficiency through solutions like sidechains or Lightning Networks, without altering the base layer.

**Types of Attacks**
_**Sybil Attack**_: An attacker creates numerous fake identities to gain major influence over the network, aiming to disrupt its operations.

_**51% Attack**_: An entity controls over 50% of the network’s power, allowing them to manipulate transactions and potentially double-spend cryptocurrencies.