Each block in Bitcoin's blockchain has an 80 byte block header, which contains metadata about the block. This metadata has 6 fields: the block version number, the hash of the previous block header, a hash based on all of the transactions in the current block, a current timestamp, the difficulty target (required for proof of work), and the nonce (required for proof of work).
In 1982 Leslie Lamport, Marshall Pease, and Robert Shostack described this agreement protocol and presented an algorithm to solve this problem, which has been implemented in blockchain solutions such as Bitcoin. The problem is described as follows. Reliable computer systems must handle malfunctioning components that give conflicting information to different parts of the system. This situation can be expressed abstractly in terms of a group of generals of the Byzantine army camped with their troops around an enemy city. Communicating only by messenger, the generals must agree upon a common battle plan. However, one or more of them may be traitors who will try to confuse the others. The problem is to find an algorithm to ensure that the loyal generals will reach agreement. It is shown that, using only oral messages, this problem is solvable if and only if more than two-thirds of the generals are loyal; so a single traitor can confound two loyal generals. With unforgeable written messages, the problem is solvable for any number of generals and possible traitors.
Cluster analysis or clustering is the task of grouping a set of objects in such a way that objects in the same group (called a cluster) are more similar (in some sense or another) to each other than to those in other groups (clusters). In the context of Bitcoin, address clustering tries to break the privacy of bitcoin users by linking all addresses created by an individual user, based on information available from the blockchain.
A cryptocurrency is a digital currency that is protected by cryptography. One of its primary functions is to act as a means of exchange within a peer-to-peer (P2P) economic system built on blockchain technology.
A digital overlay network that can only be accessed with specific software, configurations, or authorization, often using non-standard communications protocols and ports. Two typical types of Darknet are friend-to-friend (peer-to-peer) networks and privacy (anonymous) networks, such as The Onion Router (TOR). See also the definition for I2P for further information.
Decentralization as organized by blockchain technology cannot be compared to traditional centralized cloud storage methods. With centralized cloud storage, data is not stored on devices but in central servers of third parties. Information within the blockchain is not stored in central databases, but is distributed over many different nodes within a peer-to-peer general ledger.
Digital signatures are a way to prove that somebody is who they say they are by using cryptography or math. A digital signature is a way to prove that a message originates from a specific person and no one else. See asymmetric cryptography for how digital signatures operate on a blockchain through users generating key pairs.
Also known as internet escrow, works by placing cryptocurrency in the control of an independent and licensed/unlicensed third party to protect both buyer and seller in a transaction. When both parties verify that the transaction has been completed per terms set, the digital currency is released. This is often a service provided by a Darknet Market Place.
The creation of an alternative ongoing version of the blockchain, typically because one set of miners begins hashing a different set of transaction blocks from another. It can be caused maliciously by gaining too much control over the network, accidentally, or intentionally when a core development team decides to introduce substantial new features into a new version of a client. A fork is successful if it becomes the longest version of the blockchain.
A permanent divergence in the blockchain which makes previously invalid transactions valid, and therefore requires all users to upgrade. Occurs when any alternation changes the block structure or difficulty rules
A limit order is an order type in which the investor indicates that he wishes to buy or sell a cryptocurrency at a certain price. For example: the current price of Bitcoin is €10,000, the investor sets a limit order that when the price reaches €9,000, the order is performed.
Refers to blockchains which are only available to interaction by authorized parties. These types of blockchains are often used by a consortium of organizations. Examples of permissioned blockchains are Hyperledger and Corda.
This digital and encrypted code which is only known by the intended recipient or owner is usually paired with a public key. The private key is used to sign or confirm an outgoing transaction which is used by the network to confirm that the user sending the transaction is the legitimate user of the public key. Whoever controls the private key controls the wallet and if the private key is lost access to the contents of the wallet become inaccessible.
Sharding is the method where using a mathematical scheme, the blockchain is broken into shards were each transaction is assigned to a single shard and any given node is tasked with tracking a single shard of the blockchain. The node tasked with a single shard is accompanied by other nodes tasked with the same shard to maintain security.
A soft fork is a change to the blockchain where only previously valid blocks are made invalid. Since old nodes will recognize the new blocks as valid, a soft fork is backward-compatible. This kind of fork requires only a majority of the miners upgrading to enforce the new rules.
Two-factor authentication (2FA), sometimes referred to as two-step verification or dual factor authentication, is a security process in which the user provides two different authentication factors to verify themselves to better protect both the user's credentials and the resources the user can access