Cryptocurrency and Blockchain Dictionary

Terms commonly used in the world of blockchain and cryptocurrency

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Race Attack

Race attack – a double spend attack on the P2P network which is only possible if the recipient of the transaction accepts unconfirmed transactions as a payment. If this is true, the attacker broadcasts a conflicting transaction to the network at the same time; in case the conflicting transaction gets more confirmations, an attack is successful and the recipient does not get paid. It is easier to carry out such an attack if the attacker has a direct connection to the victim’s node, and perhaps deposits the conflicting transaction directly to miners

Other Important Terms

PoW

PoW – short for Proof of Work. A type of consensus mechanism, where nodes validate transactions by using computing power. Here is how it works: User A makes a transaction; User A’s transaction gets bundled into a block along with other users’ transactions; Transactions get validated; The header of the most recent block is inserted into this block as a hash; The cryptographic problem is solved during the mining process; The block is published to the blockchain; User B receives a transaction. For example, Bitcoin uses PoW consensus mechanism.

Transaction

Transaction – a recorded transfer of some amount of cryptocurrency from one wallet to another. Every transaction is recorded in a blockchain or DAG.

Mining Reward

Mining reward – a certain amount of cryptocurrency awarded by the network to select miners for every block/transaction mined. For example, the current Bitcoin mining reward is 12.5 BTC per block mined (this amount will reduce in the future with each halvening).

Bitcoin

Bitcoin is a digital or virtual cryptocurrency created in 2009 that uses peer-to-peer technology to facilitate instant payments.

Roadmap

Roadmap – a future plan of a cryptocurrency project with events and their respective deadlines. Usually published in marketing materials.

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