Page 11 - FIGI: Security Aspects of Distributed Ledger Technologies

Mining The act of validating Blockchain transactions. Requires computing power and electricity to
solve “puzzles”. Mining rewards coins based on ability to solve blocks.
Mining pool A collection of miners who come together to share their processing power over a network
and agree to split the rewards of a new block found within the pool.
Node A copy of the ledger operated by a user on the blockchain
Nonce A number only used once in a cryptographic communication (often includes a timestamp)
Off-chain Where data is not processed on a native blockchain, but which may later be placed on a
blockchain. That data may not be accurate however.
On-chain governance A system for managing and implementing changes to a crypto-currency blockchain
Oracles An agent that finds and verifies real-world occurrences and submits this information to a
blockchain to be used by smart contracts.
P2P (Peer to Peer) Denoting or relating to computer networks in which each computer can act as a server for
the others, allowing shared access to files and peripherals without the need for a central
server.
PKI (Public Key Infrastruc- A set of roles, policies, and procedures needed to create, manage, distribute, use, store, and
ture) revoke digital certificates and manage public-key encryption.
Private Blockchain Blockchain that can control who has access to it. Contrary to a public blockchain a Private
Blockchain does not use consensus algorithms like POW or POS, instead they use a system
known as byzantine fault tolerant (BFT). BFT is not a trustless system which makes a BFT
system less secure
Proof of Activity Active Stakeholders who maintain a full node are rewarded
Proof of Capacity Plotting your hard drive (storing solutions on a hard drive before the mining begins). A hard
drive with the fastest solution wins the block
Proof of elapsed time Consensus algorithm in which nodes must wait for a randomly chosen time period and the
first node to complete the time period is rewarded
Proof of Work (POW) A consensus algorithm which requires a user to “mine” or solve a complex mathematical
puzzle in order to verify a transaction. “Miners” are rewarded with Cryptocurrencies based
on computational power.
Public key cryptography Encryption that uses two mathematically related keys. A public and private key. It is impos-
sible to derive the private key based on the public key.
Sharding Dividing a blockchain into several smaller component networks called shards capable of
processing transactions in parallel.
Smart Contract Self-executing contract with the terms of agreement written into the code
Solidity Solidity is a contract-oriented programming language for writing smart contracts. It is used
for implementing smart contracts on various blockchain platforms.
Token Representation of a crypto-asset built on an existing blockchain
Turing Complete language A computer language that is able to perform all, possibly infinite, calculations that a com-
puter is capable of
Wallet Stores a crypto-asset token
51% Attack A situation in which the majority of miners in the blockchain launch an attack on the rest of
the nodes (or users). This kind of attack allows for double spending.

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