51% Attack

A type of attack on a cryptocurrency where an attacker performs a transaction on the blockchain, waits of their product to arrive and then mines and releases a fork that does not contain that transaction - thus allowing them to double-spend.


Address

A user’s public key or a hash of their public key - the address is used to denote who the cryptocurrency is being sent. 


Altcoin

The collective name for cryptocurrencies that aren’t bitcoin. For example, litecoins, peercoins or dogecoins. 


ASIC

Stands for Application Specific Integrated Circuit. A computer chip that is only intended to do a single specific tasks - in the case of ASIC miners that task is to computer hash functions. 


Bit

A position in data that can only either be zero or one. 


Bitcoin

The first and most prominent cryptocurrency proposed by Satoshi Nakamoto in 2008. 


Bitcoin Core

A piece of software release by the core developers that acts as a wallet for the user and as a full node. 


Bitcoin Whitepaper

The 2008 white paper published by Satoshi Nakamoto which outlines the concept of Bitcoin and it entitled ‘Bitcoin: A Peer-To-Peer Electronic Cash System’.


Block

A list of all the valid transactions that have been received and accepted by a miner since they received the last mined block or, if the block has been mined, a list of all the valid transactions received and accepted by a miner between the previous block and the generation of a valid has for the block. 


Block header

A title to the block which includes the essential information - a hash of the previous block mined, a hash of the transaction in titled block, a timestamp, the target and a nonce.


Block Height

The number of blocks in the chain preceding a block. For example, the genesis block has a block height of zero. 


Blockchain

A series of blocks of information tied together through each block containing a hash reference to the block preceding it. 


Coinbase transaction

A special transaction with no inputs that outputs an amount to the miner a block as their reward. 


Cold storage

When a cryptocurrency account has all its private keys stored offline and the online ones deleted. 


Coloured coins

A set of methods for representing non-cryptographic assets on a blockchain.


Confirmation

When a transaction is found in a valid, mined, transmitted and accepted block.


Cryptocurrency

The collective name for all systems which use a blockchain to track a currency that principally exists within that blockchain. 


Difficulty

A measure of how many hashes it will take for a valid hash to be mined.


Digital Currency

Any currency or proportion of a currency where transactions can happen online. All virtual currencies and all cryptocurrencies are digital but not all digital currencies are cryptographic or virtual. 


Digital signiture

A unique string of numbers and letters that is generated for some data using the data being signed and a private key; the signature can be validated using the signed data and the corresponding public key.


Distributed ledger

The data entries that are shared by all the full nodes on the network - in cryptocurrencies it is a record of all transactions ever made. 


Double spending

When a user is allowed to spend a transaction twice. 


Dust transaction

A very small transaction in a cryptocurrency that is considered too small to be worthwhile. 


Eliptical Curve Cryptography

A particular style of cryptography based on elliptical curves in infinite fields - used to generate private/public key pairs. 


Escrow

When money is held by a neutral party and released by that party when pre-conditions have been met. 


Ethereum

A community driven organisation that is building protocols and methods for decentralised methods online. 


Fiat currency

A currency that is declared by a government to be legal tender but does not have a commodity backing. 


Fork

When two blocks are mined at the same or similar times and the network cannot immediately choose between the two blocks. 


Full node

A computer on the network that receives transactions from others, validates them against a record of every transaction ever made and relays the valid transactions. 


Genesis (Gen) Block

The fist block mined on a blockchain. 


Hash

A fixed length alphanumeric string that is derived from a set of data that’s any size - the hash is deterministic, appears random, is non-reversible and is unpredictable. 


Hash Rate

The number of hashes done per second. 


Hexadecimal

A form of data that uses all ten numbers and the first six letters in the alphabet to represent data. 


Input

A necessary part of almost every transaction that corresponds to one or more other transactions that the author of the transaction has received - this set of transactions demonstrates that the author has the necessary funds 


Key pair

A private key and public key that correspond to one another - the private key can decipher data ciphered with the public key or the private key can generate signatures that can be validated with the public key. 


Litecoin

An alternative to bitcoin that has the second greatest market capitalisation of any cryptocurrency and claims technical improvements such as shorter block generation time and a greater maximum number of coins.  


Lock time

A time or block height before which a transaction cannot be added to a block.


Merkle root

A hash that is contingent on every piece of data at the branches of the merkle tree and can be easily calculated. 


Merkle tree

Generated by taking the hash of pairs of pieces of data (in this case, transactions), and then taking a hash of pairs of those pairs until only the root hash remains. 


Microtransactions

Small transactions that are typically unviable in traditional currency systems. 


Miners

Computers and their owners who compete to generate a valid hash for a block, broadcast that block and collect the reward.


Multisig

A method for requiring valid signatures from two or more private keys on a transaction before that transaction can be used as an input. 


Namecoin

A distributed ledger system for registration and transfer of information based on the Bitcoin protocol. 


Nonce

An arbitrary number which is altered each time the block is hashed in order to alter the resultant hash and allow for the miner to search for a valid hash through trail and error.


Off-chain transactions

Any transaction in a cryptocurency that happens using a method other than sending a transaction on the relevant blockchain. Sometimes used for very small or very rapid transactions between trusted parties or using a trusted party.


Orphan block

A block which is abandoned by the network after a fork and when the other side of the fork has a greater block height. 


Output

Every transaction has an output is typically an address - it represents who the cryptocurrency is being sent. 


Peer-to-peer

Any network were users of the network send information between one another instead of sending information to and central point and receiving it back. 


Peercoin

The first altcoin to use proof-of-stake.


Pre-mining

When a new cryptocurrency is launched and there already exists a pool of currency that has not been mined according to the rules of the currency. Often associated with scamcoins. 


Private Key

An alphanumeric string used either to decipher data or to generate a digital signature. 


Proof-of-stake

An alternative to proof-of-work and a method for achieving consensus through assigning the right to mine a block based on how much of the currency a miner holds. Not considered viable in a pure form although peercoin uses a hybrid model.


Proof-of-work

A method for achieving consensus by having miners generate hashes that are only valid is they are sufficiently rare, thus proving the miners must have used trail and error to search for a valid hash and therefor have done ‘work’. The chain with the most total work done on it - the greatest total difficulty - is considered the ‘right’ chain. 


Public Key

An alphanumeric string used either to decipher data or to validate a digital signature. 


Pump and dump

A trading strategy which typically involves pushing up the price through buying and/or creating numerous buy orders, and then when the price is artificially high selling a greater amount of the currency. 


QR code

A 3D barcode that, when scanned with a mobile device or webcam, can output an address therefor acting as a convenient way to share a bitcoin address. 


Satoshi

The smallest fraction of a Bitcoin possible - 0.00000001 BTC. 


Satoshi Nakamoto

A person or group of persons who authored the bitcoin white paper and who’s identity remains unknown. 


Scamcoin

An altcoin that is created with the intention to defraud users - typically in the form of selling them pre-mined currency on promises of innovation and then abandoning the project. 


Script

Script is the non-Turing complete language used to write the rules for a transaction and can be used to write complex outputs that resemble smart contracts. It is non-Turing complete due of its deliberate lack of infinite loops. 


SHA-256

A particular method for hashing data which takes in any amount of data and outputs a 256 bit long number which can be interpreted as a 16 digit hexadecimal number. 


Smart Contract

A method for writing agreements that self-execute when certain parameters are fulfilled and that go beyond simple transactions of currency.


SPV nodes

Stands for Simplified Payment Verification and also known as ‘Thin Clients’. A member on the network who does not validate transactions but only holds block headers and transactions relevant to the user. 


Target

A 256 bit number that represents the upper limit to a valid hash of a block - when miners generate a hash that is 256 bits long it must be smaller than the target in order to be valid. The target is dynamic and decreases as hashing power of the network increases in order to keep the mining of blocks regular. 


Thin nodes

See SPVs. 


Timestamp

A number which represents a point in time - usually the point at which something was created. The timestamp of a mined block shows when it was mined. 


TOR

A system and protocol which masks the IP of the user. By sending transactions on the blockchain using TOR, users can further hide their identity.


Transaction fee

The difference between the outputs of a transaction and the inputs - this amount is considered a fee to the miners and is collected by miners. 


Turing complete

A quality of programming languages. A language is turing complete if it can emulate all the functions of a simple tape reading and writing computer. 


Virtual Currency

A currency that is exclusively online and cannot be used to purchase items outside of the online world, for example; Linden Dollars, Starbucks points, Facebook credits. 


Wallet

A piece of software that runs on a device and generates and stores a user’s private and public keys and assists them in generating valid transactions.


Zero-confirmation transaction

A transaction that is yet to be included in any mined and transmitted blocks. After the transaction is included in one block that is received by the network then it becomes a one-confirmation transaction and so forth.