Glossary of Terms

Canadian Blockchain Consortium: Blockchain Glossary of Terms

Address
In the blockchain industry, the public address of a private key. Shown as a hexadecimal (Base 16) string of characters, it acts as an account's identitifier.
Bitcoin (BTC)
Launched in 2009 as an innovative decentralized, peer-to-peer transaction network, Bitcoin is the original blockchain-based cryptocurrency and uses proof-of-work (POW) to validate transactions.
Block
The discrete chunks of data on a blockchain network, which are ordered sequentially, such as in a list of transactions or records of events.
Blockchain
An immutable network composed of blocks of data that are linked together, with the ability to programmatically verify or reject data. Data permitted entry into the network is determined by its consensus mechanisms, like proof-of-work and proof-of-stake.
Block reward
Rewards received by participants on a blockchain network for validating transactions, which incentivize the use of miner and staker resources in maintaining the integrity of the network.
Cardano
An open-source decentralized and low-carbon emission blockchain network founded in 2015 by Charles Hoskinson, the co-founder of Ethereum. The native currency of Cardano is ADA, named after computer science pioneer Ada Lovelace.
Consensus
Consensus on a blockchain network means the algorithmically governed agreement by network participants, such as miners and stakers, about whether a block should be added to the node.
Consortium (Network)
A consortium is a private blockchain network with controls on access run by a company, or a group of companies, which typically handles information with a strong requirement for access control, such as private financial data (see Corda).
Corda
The world's largest private blockchain ecosystem, Corda was developed by a consortium of financial institutions as a platform for smart contract applications.
Cryptocurrency
Tradeable digital currencies secured by public and private key cryptography.
Cryptography
A method of creating and solving encoded messages using complex mathematical problems (algorithms). Blockchain networks are secured by problems with a high degree of difficulty.
Digital Asset
Digitally stored content with defined value that attributes ownership and usage rights. Blockchain digital assets include NFTs, tokens, and currencies.
Ethereum
A decentralized proof-of-work blockchain that was the first major network to launch smart contracts and is the leading platform for NFT issuances. Ethereum is planning a release of a proof-of-stake network in 2022 to reduce its carbon footprint.
Exchange
A digital financial service that enables the trading of cryptocurrencies and digital assets for other tokens or fiat currencies.
Gas
Gas refers to the energy costs incurred to network participants based on the computational difficulty of verifying transactions on the Ethereum network, such as the mechanisms behind issuing NFTs.
Hard Fork
A change to a blockchain network's protocol that is incompatible with the existing network. Forks can be used to create a different variation of a blockchain on a new branch that may have improvements or other functionality.
Hash
The output created by cryptographic algorithms that condenses data to a manageable format and acts as an identifier of blocks.
Hyperledger
IBM's private blockchain platform, which is widely used to create private chains and smart contract applications for enterprises.
Initial coin offering (ICO)
Similar to an equity raise, ICOs are the digital equivalent of an Initial Public Offering for projects and companies, and tokens sold by these events are considered securities in most global jurisdictions.
Miner
A participant on a proof-of-work blockchain network with the ability to create and add new blocks of data to the blockchain and competes to validate transactions with other miners to gain block rewards.
Mining pool
An aggregation of miners that agree to pool their hashing power to enhance their chances of efficiently earning block rewards. Foundry USA is one of the largest global Bitcoin mining pools and controls more than 15% of the hash power on the network.
Network
A group of participants (see nodes) that connect their computer infrastructure online and use common protocols to create a distributed blockchain.
Node
A blockchain network participant that hosts part of the network and that is capable of validating blocks of data.
Peer-to-peer (P2P)
The original motivation behind the development of Bitcoin and its blockchain protocols, peer-to-peer usually refers to transactions directly between accounts on a blockchain network that do not require intermediaries like financial institutions.
Private key
The secret half of the public-private key system used by blockchain cryptography, which acts as an access code to cryptocurrency accounts and requires cybersecure storage. The private key is used to decrypt data in the shareable public key.
Proof-of-stake (PoS)
A method for validating blockchain transactions where actors are able to add new blocks to the network based on the amount of native currency they hold, as opposed to the amount and efficiency of energy they use for proof-of-work consensus. Cardano, Avalanche and the upcoming Ethereum 2.0 are examples of blockchains that use PoS.
Proof-of-work (PoW)
A method for validating blockchain transactions in which actors use energy and computational power to compete to solve a mathematically difficult problem and produce the next block of data in the chain, which earns block rewards. Bitcoin, Ethereum and Dogecoin are examples of blockchains that use PoW.
Public Key
A cryptographically secured equation that corresponds to a secret private key, which grants access to its data. Public keys can be shared without risking data or account breaches.
Security token offering (STO)
An ICO where the token being sold is legally classified as a security and sold to accredited investors in a regulated process, such as through an licensed exchange.
Smart contract
Programmable digital agreements that are executed within computing environments and used to automate contract execution based on data accessible to the blockchain network. For example, a smart contract could be programmed to transfer a set amount of cryptocurrency once a receipt of a product is registered on the blockchain network.
Token, non-fungible (NFT)
Unique tokens that are not tradeable with non-fungible tokens, even when representing the same value, such as identical digital art prints. NFTs are purchased and traded using cryptocurrencies as the medium of exchange, rather than being directly tradable.
Token, security
Tokens that represent a share of a company's equity, revenue or other type of securitized asset. Security tokens can confer rights on owners, like the ability to vote within a decentralized network.
Token, stable
A cryptocurrency tied to the value of another type of value, usually a fiat currency. Stable tokens (or stablecoins) are used as a digital means of transaction that reduce fluctuations in the value of the coin.
Token, utility
Utility tokens move beyond simply a means of exchanging and holding value to represent rights to activities on a network, such as the ability to access services or future products.
Transaction
An input into a blockchain that changes in the blockchain's data, typically an exchange of value, such as with cryptocurrencies, or information, as with smart contracts.
Wallet
Files or software applications that hold user's private keys, which interact with public keys to transfer value like cryptocurrencies. Wallets can be “hot”, meaning connected online, or “cold”, meaning offline and in the form of a hard drive or USB key. Wallets