What Is a Cryptoasset? A UK Explanation
A cryptoasset is a digitally recorded representation of value or contractual rights that is secured using cryptography. In UK legislation, the definition also says it can be transferred, stored or traded electronically and uses technology that supports the recording or storage of data, which may include distributed ledger technology. “Cryptoasset” is a useful umbrella term....
READWhat Is Tokenisation? A UK Explanation
Tokenisation is the digital representation of an asset or interest using a digital ledger. In UK financial and technical discussion, the term is often used for creating a digital version of an asset and recording it on a shared ledger. What a tokenised record can represent The Bank of England explains tokenisation as creating a...
READWhat Is a Decentralised Application (Dapp)?
A decentralised application, often shortened to dapp, is an application built on a decentralised network. Ethereum describes a dapp as combining a smart contract with a frontend interface. The parts of a dapp On Ethereum, the smart contract is code on the blockchain. The frontend is the interface a person uses. Ethereum notes that a...
READWhat Does Off-Chain Mean? | Crypto Glossary
Off-chain means handled outside the blockchain being discussed. Data or activity can be off-chain even if it later connects with, or is settled on, a blockchain. Examples of off-chain activity Bitcoin’s Lightning Network provides one example. Its channels open and close on Bitcoin’s blockchain, while individual payments between channel participants occur off-chain rather than each...
READWhat Does On-Chain Mean? | Crypto Glossary
On-chain means recorded on the blockchain being discussed. Always name the network: a record can be on Bitcoin, Ethereum or another specific chain. What can be on-chain A Bitcoin blockchain is an ordered, timestamped public ledger of transactions. On Ethereum, a signed transaction can update the network’s state once it is included in a validated...
READWhat Is Proof of Stake?
Proof of stake is a consensus mechanism used by some blockchain networks, including Ethereum. Ethereum’s documentation describes it as the mechanism that processes transactions and creates new blocks. How it fits into Ethereum Ethereum uses validators in its proof-of-stake system. Its documentation explains that validators are responsible for ordering transactions and creating blocks, with other...
READWhat Is Proof of Work?
Proof of work is a consensus mechanism in which participants demonstrate computational work under a network’s rules. Bitcoin uses proof of work as part of its process for ordering blocks. The basic idea Bitcoin’s white paper describes a proof-of-work system based on searching for a value which, when hashed, meets a required condition. The work...
READWhat Is Blockchain Consensus?
Blockchain consensus is the set of protocol rules and processes a network uses to agree on a valid history or state. It is a technical term, not a promise that every participant agrees about everything outside the network. Why a network needs consensus Blockchain networks have multiple independent computers receiving and checking information. Consensus mechanisms...
READWhat Is a Blockchain Node? A Technical Explainer
A blockchain node is a computer or software instance that participates in a particular blockchain network. Its tasks depend on the network and the type of node. What nodes can do Bitcoin full nodes download and verify blocks and transactions before relaying them to other nodes. Ethereum describes a node as an instance of Ethereum...
READWhat Is a Hash in Blockchain? A Technical Explainer
A hash is an output calculated from data using a cryptographic function. In blockchain systems, hashes are often used as references or commitments to particular data. From data to a hash value A hash function takes an input and produces an output of a defined form. When the input changes, the resulting hash value changes...
READWhat Is a Blockchain Block? How Blocks Work
A blockchain block is a protocol-defined record that can group transactions with other data used by that network. It is one piece of the chain of records that gives a blockchain its name. What a block contains There is no single block format for every blockchain. The rules come from the protocol. Bitcoin documentation describes...
READBitcoin vs cryptocurrency: what is the difference?
Bitcoin is a cryptocurrency. Cryptocurrency is the broader term for digital assets that use cryptography and typically a distributed ledger such as a blockchain. In other words, Bitcoin is one example of cryptocurrency, but not every cryptocurrency is Bitcoin. The distinction matters because different cryptoassets can use different networks, rules and technologies. A description of...
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