In the first part, we have learned about What is Blockchain. In this Section, We will focus on a few terminologies used in Blockchain technology. Understanding these terms will help you to learn blockchain technology in an efficient way.
1. Transaction- It mainly consists of a unit of the task that is stored in the records.
A blockchain transaction is a peer-to-peer transfer of cryptocurrencies in a trustless environment, without the need for an intermediate. The Collection of this transaction is known as blocks, which are stored in Blockchain after validation by all the users who participate in the network.
2. Block- It is a part of the blockchain that records recent information. Once a block is executed, it goes into the blockchain as a permanent database by creating a new block. All Blocks are linked with each other like a chain in chronological order. Also, every block contains a previous hash value of the previous block.
It consists of different items such as Block number, Data, Timestamp, Hash (index +data+ timestamp), and previous hash.
3. Genesis block- it is the first block that contains 0 as the previous address. It acts as a foundation of blockchain on which additional blocks are added sequentially to form a chain.
4. Ledger- It is known as a record which is a continuously growing file that keeps the record of the stored transaction. It acts as a digital ledger that records transactions in a sequential manner, where everyone obtains a copy of records to see and thus it has no central authority. It has a high level of security on the network.
5. Decentralization- The transfer of authority and responsibility from a centralized organization, government, or party to a distributed network.
6. Distributed Ledger Technology(DLT)- A distributed ledger is a database that allows the sharing of data with multiple nodes across the Blockchain network. Records are stored sequentially in a continuous ledger. Basically, decentralization removes the need for a central authority in the network and eliminates the chances of a 'single point of failure.
7. Double Spend- The event during which someone in the Bitcoin networks tries to send a specific bitcoin transaction to two different recipients at once. However each bitcoin transaction is confirmed, it becomes almost impossible to double spend it. The more confirmation that a particular transaction has, the decreased likelihood of double spending the bitcoin from the transaction.
8. Digital Signature- It is a code generated by Public key encryption and attached to an electronically transmitted document in order to verify the contents of the documents.
9. Nonce- It stands for number only used once, which is a one-time code that can be used only once in the entire blockchain. It is in encrypted or the hashed form of 32-bit abbreviated whose value is adjusted by the miners so that it gets used for hashing the value of the block.
10. Cryptographic Hash- It is a set of random numbers and alphabets that work as an encrypted output of fixed length. Blockchain uses the SHA-256 hashing algorithm to generate the hash value. A hash value is created based on the data present for the particular transaction. A simple hash looks as;-04cd876721e4f12h768dd3k5t255j0
11. Proof of Work(POW)- It is an algorithm in blockchain technology that is used to validate transactions and to generate a new block for the chain. It helps miners to compete against each other to mine the transaction for the reward. At present, the block reward for the Bitcoin network is twenty-five bitcoins for each mined block.
12. Blockchain Explorer- It allows users to explore the entire blockchain platform that clients are using. All bitcoins and other users depend on blockchain explorer to manage their records and transactions. It is similar to Mozilla and chrome where users can get the entire information about blockchain technology.