Blockchain Cheat Sheet
The world of blockchain and cryptocurrencies can seem daunting to anyone on the outside looking in. And with good reason too. There’s a lot of technical information around, as well as thousands of cryptocurrency companies, with more created every day. With such an overwhelming amount of information out there, where do you start?
Well, with that in mind, we’ve created an introductory, easy-to-digest cheat sheet for anyone who wants to learn a little more about cryptocurrencies.
This cheat sheet is designed for the one who has already started learning about the Blockchain but needs a handy reference sheet.
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Introduction to Blockchain:
A blockchain is a secure, global, immutable public ledger that records every transaction, chronologically, on the network. The blockchain is the underlying technology upon which cryptocurrencies and DApps (more on them later) are built.
Blockchains update regularly, confirming transactions. Once a transaction has been confirmed and listed in the blockchain, it is impossible to change or tamper with. This makes blockchains extremely secure and highly resistant to fraudulent behavior or human error. Blockchain technology is set to disrupt industries all over the world in the coming years – especially industries where there are a high number of intermediary or third-party companies.
Some of the common terminologies of blockchain are as under:
- Blocks – A collection of data containing multiple transactions over a given period of time on the blockchain network.
- Chain – The cryptographic link which keeps blocks together using a ‘hash’ function.
- Blockchain – A blockchain is a secure, global, immutable public ledger that records every transaction, chronologically, on the network. It is a chain of blocks that contain information for the understanding of a common man. Members of the network are anonymous individuals called nodes. All communication inside the network takes advantage of cryptography to securely identify the sender and the receiver.
- Peer-to-peer Network – every node of the network is a client as well as a server, holding identical copies of the application state
- Cryptography – use of public key cryptography and cryptographies hash functions: essential for transparency and privacy.
- Game Theory – Nodes of P2P network validate transactions by consensus, following economic incentive mechanisms like Proof of Work or Proof of Stake, etc.
- Bitcoin – A Peer Peer Electronic Cash System that would enable people to spend it directly without it going to a financial institution. Blockchain is the technology that runs Bitcoin.
- Coin: A cryptocurrency ‘coin’ is seen as a means of payment. The purpose of a coin is to act like money – to allow transactions of products and services to occur. Depending on the coin, it is a store of value, unit of account, or medium of transfer (exactly like fiat currencies – dollars, pounds, yen, etc.).
- Token: A means of payment, but with an added layer of functionality above it. Holders of tokens often get value from them beyond speculative returns, such as being able to vote on certain business decisions or technical changes, earn dividend payments for holding or staking tokens, or get discounts on, or access to, services.
- Decentralized: A system where no individual has ownership of the system and there is no central point of control. In the case of decentralized blockchains, the system is spread over the entire network of users. This makes it almost impossible to hack, tamper with or destroy.
- Cryptocurrencies – The digital currencies that are secured using cryptography and built using blockchain technology.
- DApps: DApps are ‘decentralized applications. They are applications, like Bitcoin Blockchain or Ethereum, that is built on a decentralized blockchain.
- Hash: The result of applying an algorithmic function to data in order to convert them into a random string of numbers and letters. This acts as a digital fingerprint of that data, allowing it to be locked in place within the blockchain.
- Digital Signature: A digital code generated by public key encryption that is attached to an electronically transmitted document to verify its contents and the sender’s identity
- Public Address: The cryptographic hash of a public key. They act as email addresses that can be published anywhere, unlike private keys.
- Private Key: A string of data that allows you to access the tokens in a specific wallet. They act as passwords that are kept hidden from anyone but the owner of the address.
- Proof of Stake: A consensus distribution algorithm that rewards earnings based on the number of coins you own or hold. The more you invest in the coin, the more you gain by mining with this protocol.
- Proof of Work: A consensus distribution algorithm that requires an active role in mining data blocks, often consuming resources, such as electricity. The more ‘work’ you do or the more computational power you provide, the more coins you are rewarded with.
- Node: A copy of the ledger operated by a participant of the blockchain
With this, we come to an end of the Blockchain Cheat Sheet. To get in-depth knowledge, check out our interactive, live-online Intellipaat Blockchain certification training Course here, which comes with 24*7 support to guide you throughout your learning period. Intellipaat Blockchain Certification Course offers the definitive training in the blockchain that includes blockchain programming – Solidity, Ethereum, the concepts of distributed ledger, hyperledger, multichain, cryptocurrency, bitcoin mining, architecture, core layers, application, and more. In this Blockchain course, you will work on real-world projects and case studies for hands-on experience.
Also Read: Best Ethereum Wallets of 2022 to manage your ETH