Lesson 2: key terms

Question 1

What is a transaction?

Answer 1

Change of state— either money changing hands or change in the data

Question 2

Block?

Answer 2

Batch of transactions added to a blockchain at certain intervals

Question 3

Mining?

Answer 3

Compute power applied to solve complex problems to provide network security for a reward

Question 4

Node?

Answer 4

Compute hardware and software that relays transactions to other nodes

Question 5

Consensus?

Answer 5

Agreement that a block is valid

Question 6

Hash?

Answer 6

All data in previous block of transactions collapsed to unique digital signature

Question 7

Public address?

Answer 7

Address to which coins or tokens are sent

Question 8

Public key?

Answer 8

Used to prove digital signature came from private key

Question 9

Private key?

Answer 9

Key created with public key to encrypt or send transactions; only key owner knows this and this proves ownership

Question 10

Distributed ledger technology?

Answer 10

Database synchronized among network peers, who all agree on the version

Question 11

Blockchain?

Answer 11

Database of transactions linked by cryptographic hashes and maintained by a distributed network of peers who all agree on the version

Question 12

Miner?

Answer 12

People or organizations who mine

Question 13

Consensus algorithm?

Answer 13

Software process by which a blockchain network reaches agreement on the validity of transactions and state of the blockchain

Question 14

Proof of work (PoW)?

Answer 14

Consensus algorithm requiring miners to expend energy to solve complex math problems

Question 15

Proof of stake (PoS)?

Answer 15

Like posting a bond, it’s a consensus algorithm requiring nodes to stake crypto assets