Dictionary

1. Blockchain - At its core, blockchain is a decentralized and distributed digital ledger that records transactions in a secure and immutable manner. Unlike traditional centralized systems, blockchain operates on a peer-to-peer network, where multiple participants, known as nodes, validate and maintain the integrity of the ledger collectively.

2. Node - In blockchain, Node is a computer or device that maintains a copy of the blockchain ledger, validates transactions, verifies and creates blocks, participates in consensus, and helps propagate information throughout the network.

3. Consensus mechanism - in blockchain is a protocol or algorithm that ensures all participants in the network agree on the validity and order of transactions. It is crucial for maintaining the integrity and security of the blockchain. Consensus mechanisms eliminate the need for a centralized authority by enabling distributed nodes to collectively validate and agree on the state of the blockchain. Popular consensus mechanisms include Proof of Work (PoW) and Proof of Stake (PoS), each with its own set of rules and incentives to incentivize participation and prevent malicious activities such as double-spending or fraudulent transactions.

4. Proof of Work (PoW) - a consensus mechanism in blockchain where participants, called miners, compete to solve complex mathematical problems to validate transactions and create new blocks. The first miner to solve the puzzle is rewarded, and their block is added to the blockchain, requiring substantial computational power as a proof of their work.

5. Miner - an individual or entity that participates in the process of validating and verifying transactions on a blockchain network. Miners use specialized computer hardware and software to solve complex mathematical problems, earning rewards in the form of cryptocurrency for their computational efforts.

6. Proof of Stake (PoS) - a consensus mechanism in blockchain where the probability of validating new blocks is determined by the number of cryptocurrency tokens a participant holds. In PoS, participants with a higher stake (amount of tokens) have a greater chance of being chosen to validate transactions and create new blocks, reducing the need for extensive computational power like in Proof of Work (PoW).

7. Staker - is an individual or entity that participates in the process of validating transactions and creating new blocks in a Proof of Stake (PoS) blockchain network. Stakers hold and lock a certain amount of cryptocurrency in a staking mechanism to have a chance at being selected to validate transactions and earn rewards.

8. Bitcoin - a decentralized digital currency and payment system that operates on a peer-to-peer network. It was created by an anonymous person or group known as Satoshi Nakamoto. Bitcoin utilizes blockchain technology to secure and verify transactions. It allows users to send and receive payments without the need for intermediaries, such as banks. Bitcoin is limited in supply, with a maximum of 21 million coins.

9. Peer-to-peer (P2P) - a network architecture where devices, such as computers or mobile devices, communicate directly with each other without the need for a central server. In a P2P network, each participant can act as both a client and a server, enabling decentralized sharing of resources, data, or services. This eliminates the dependency on a central authority and allows for more efficient and direct communication between peers. P2P networks are often used for file sharing, cryptocurrency transactions, and other distributed systems, offering increased scalability, resilience, and privacy compared to traditional client-server models.

10. Gas fees - the transaction fees paid by users for executing operations on a blockchain. These fees are essential for incentivizing miners and stakers, the backbone of most blockchain networks, while also safeguarding the integrity and efficiency of the system.

11. Software wallet - digital application that allows users to securely store, manage, and transact with their cryptocurrencies. It provides a user interface for accessing and interacting with blockchain networks, enabling the sending and receiving of digital assets, as well as the management of private keys and addresses.

12.Hardware wallet - a physical device designed to securely store and manage cryptocurrencies. It stores private keys offline, providing an extra layer of security against hacking or unauthorized access. Transactions are signed within the device, ensuring the keys never leave the hardware, protecting against potential online threats.

13. Seed phrase - also known as a recovery phrase or mnemonic phrase, is a set of words generated by a cryptocurrency wallet. It serves as a backup for the wallet's private keys. By securely storing the seed phrase, users can restore their wallet and access their funds in case of loss, damage, or theft of their original wallet.

14. Private key - a randomly generated string of characters that serves as the cryptographic secret for accessing and controlling cryptocurrency funds in a wallet. It is a crucial component in securely signing transactions and should be kept secret to prevent unauthorized access to the associated digital assets.

15. Public key - a cryptographic string derived from a private key in asymmetric cryptography. It is publicly shared and used to receive funds or verify digital signatures. While it can be freely distributed, it cannot be used to determine the corresponding private key, ensuring the security of transactions.

16. Crypto address - also known as a public key or wallet address, is a unique identifier associated with a cryptocurrency wallet. It is used to receive funds or as a destination for transactions. It is typically a combination of alphanumeric characters and is shared with others to facilitate sending or receiving digital assets.

17. Custodian wallet - a type of cryptocurrency wallet that is held and managed by a trusted third-party custodian, such as a financial institution or a specialized crypto custodial service. It is designed to provide enhanced security and storage services for digital assets on behalf of clients, often including features like insurance, multi-signature authentication, and regulatory compliance.

18. Non-custodian wallet - also known as a self-custody or self-hosted wallet, is a type of cryptocurrency wallet where users have full control and responsibility over their private keys and funds. It allows users to manage, store, and transact with cryptocurrencies directly, without relying on a third-party custodian or intermediary.

19. Centralized Exchange (CEX) - a platform where users can trade cryptocurrencies. It is operated by a central entity that acts as an intermediary, facilitating the buying and selling of digital assets. CEXs often require users to deposit funds into their platform wallets and rely on centralized systems for order matching and transaction settlement.

20. Decentralized Exchange (DEX) - a platform that allows users to trade cryptocurrencies directly with each other without the need for intermediaries. DEXs operate on decentralized networks, utilizing smart contracts to facilitate trustless peer-to-peer transactions. They provide users with more control over their funds and greater privacy compared to centralized exchanges.

21. KYC - short for "Know Your Customer," is a process by which businesses verify and collect information about their customers to ensure compliance with regulations. It involves verifying the identity of individuals or entities through documents such as IDs or proof of address, reducing the risk of fraud and illicit activities.