Block Nonce: The “nonce” (number used once) in a block header is a 32-bit (4-byte) field whose value is adjusted by miners so that the hash of the block will be less than or equal to the current target of the network. The rest of the fields may not be changed, as they have a defined meaning. Block header data contains the block version number, a timestamp, the hash used in the previous block, the hash of the Merkle Root, the nonce, and the target hash. Successfully mining a block requires a miner to be the first to guess the nonce, which is a random string of numbers. This number is appended to the hashed contents of the block, and then rehashed. If the hash meets the requirements set forth in the target, then the block is added to the blockchain.
Difficulty: The difficulty is a number that regulates how long it takes for miners to add new blocks of transactions to the blockchain. Difficulty ensures that blocks of transactions are added to the blockchain at regular intervals, even as more miners join the network. If the difficulty remained the same, it would take less time between adding new blocks to the blockchain as new miners join the network. Hence the requirement a block hash must meet corresponds to the difficulty, i.e. a valid block hash must be below a certain target value set automatically (and periodically adjusted) by the blockchain protocol. The lower the target value, the more repetitions of the hash function a miner must go through in order to get an acceptable result – in other words, the higher the difficulty. A miner can, in theory, get lucky and obtain a valid hash for a given block on the first try: over time, however, higher difficulty means that miners must iterate through more nonces and rehashes per block on average. The difficulty adjusts every 2016 blocks (roughly every 2 weeks).
Blinding factor: A random value used to obscure transaction amounts. This offers privacy by granting knowledge of transaction sums only to the sender and receiver. However, third-parties can still ensure the validity of the transaction by comparing the number of inputs and outputs. This ensures the integrity of the ledger while allowing privacy. Blinding factors are a key ingredient of privacy-focused cryptocurrencies based on the Mimblewimble protocol such as Grin and Beam.
coinbase: A special field used as the sole input for coinbase transactions. The coinbase allows claiming the block reward and provides up to 100 bytes for arbitrary data.
coinbase transaction: The first transaction in a block. Always created by a miner, it includes a single coinbase.
Nothing-at-stake problem :
In a native implementation of proof of stake based blockchain, like NXT and BitShares 1.0, when a fork happens, the optimal strategy for any miner is to mine on both chains, so that the miner gets their reward no matter which fork wins. It is a well-known problem of proof of stake that is considered solvable by Tendermint and other BFT consensus engine.
In a PoW system, the block validators are called miners. And the probability for them to mine next block is proportional to their hashing powers. While in Poff-of-stake system, the blocks are created by validators and they are chosen in a deterministic way, depending on their amount of stakes. PoS systems will save lots of energy and make the attacks on the security of the system more difficult.
Genesis block: The first block in the blockchain, which is used to initialize the cryptocurrency.
Difficulty: A measure of how difficult it is to find a hash below a given target. The Bitcoin network has a global block difficulty. Valid blocks must have a hash below this target. The difficulty controls how much computation is required to produce a proof of work: more difficulty means more computation, lower difficulty means less computation.
Block Height: The number of blocks preceding a given block on a blockchain. Usually, this refers to the order number of the newest block showing how many blocks currently exist.
The initial block on a blockchain (the “genesis block”) has a block height of zero, as nothing precedes it. All subsequent blocks are numbered sequentially from 1.
Questions for this community cc @preethi
I’ve been pondering the definitions of:
Decentralized consensus system
On the Internet people tend to talk about crypto networks. However, after reading a ton of academic literature (that lacks so much knowledge of crypto) the only thing close to crypto networks mentioned is decentralized consensus systems.
How to define crypto networks, blockchain protocol and decentralized consensus system?
What is the relationship of crypto network and blockchain protocol?
So many different wordings! I’m confused. Any help with these terms would be much appreciated.
Generally, yes. When people say “crypto network”, all they really mean is that it’s a network of users/nodes within a blockchain/dapp. A decentralized consensus system (e.g. Nakamoto Consensus) has a “network” of nodes that maintain the integrity of the system.
Thanks Preethi! I edited the post a bit to add blockchain protocol and lost some of my text as I was editing on mobile.
Another question: what is the relationship of crypto network and blockchain protocol - aren’t they both a peer-to-peer network that works with consensus mechanism?
A “protocol” is simply a set of rules that defines how the system works. A “blockchain protocol”, therefore, is a set of rules that defines how a blockchain works (i.e. how it achieves consensus and maintains integrity).
A “crypto network” is just a network of users/nodes within a blockchain/dapp.
Makes sense, thank you so much! Such a buzzword soup indeed For this industry to be appealing to a bigger audience, much inclusion in terms of language is needed.
Outputs per day : Total transaction outputs per day and it includes coins returned to the sender as change and excludes coinbase transaction (miner reward)
Dust: An amount of cryptocurrency smaller than the fee required to process it. Since the value of both the currency and the transaction fee vary, the demarcation between dust and a usable amount of currency fluctuates. For reference, as of March 2019, Bitcoins transaction fees are between $0.20 and $0.28 (or 0.00005089 - 0.00007125 BTC). Transactions of lesser value than this are considered dust because they will not be processed by the network.
IEO: Initial Exchange Offering. A fundraising event for early-stage crypto projects administered by an exchange (or group of exchanges). Similar to an ICO, but with a direct listing on a crypto exchange which acts as the counterparty. Projects launched on Binance’s Launchpad, such as BTT and Fetch.ai are examples of IEOs.