Introduction to Blockchain Fundamentals
1. Block
A digital ledger file that records cryptocurrency transactions during a specific time period. Each block contains a predetermined coin value (e.g., Bitcoin blocks currently reward 6.25 BTC, halving every 4 years until 2140). Block sizes vary by blockchain—Bitcoin's theoretical maximum is 4MB, while Bitcoin Cash supports 8MB-32MB blocks.
2. Blockchain
A decentralized network of interconnected blocks replicated across distributed computers. When transactions are verified and added to a new block, the entire chain updates simultaneously.
3. Distributed Ledger
Synonymous with blockchain—a shared, immutable record-keeping system.
4. Genesis Block
The inaugural block of a blockchain containing unspendable coins. Bitcoin's genesis block (January 3, 2009) held 50 BTC.
5. Block Height
The total number of blocks sequentially linked in a blockchain.
Network Architecture & Security
6. Peer-to-Peer (P2P)
Direct computer networking without intermediaries—the foundation of decentralized blockchains.
7. Protocol
Software governing how new blocks are added to the network through predefined rules.
8. Algorithm
Mathematical formulas generating cryptographic keys that secure transactions. Primary key types:
- Hash
- Public Key
- Private Key
9. Encryption
The cryptographic process converting readable text into secure hashes/keys—the basis of cryptocurrency security.
10. Hash
A unique alphanumeric string representing a verified transaction (also called TxID).
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Wallets & Key Management
15. Wallet
A blockchain-stored file for sending/receiving crypto, managed via:
- Public Key (shareable address)
- Private Key (secret access code)
16. Cold Wallet
Offline key storage (paper/external drives) for enhanced security against hackers.
17. Hot Wallet
Internet-connected app storing keys—convenient but vulnerable to cyberattacks.
14. Seed Phrase
A 12-24 word backup phrase to recover lost private keys.
Mining & Consensus Mechanisms
18. Mining
Transaction verification process where:
- Network computers validate transactions
- New blocks are added
- Fresh coins are minted
21. Proof of Work (PoW)
Energy-intensive mining competition requiring computational effort proof.
23. Proof of Stake (PoS)
Mining rights proportional to held coins (e.g., 2% coins = 2% block mining).
24. Proof of Activity
Hybrid PoW/PoS system starting with PoW, then switching to PoS post-block creation.
Cryptocurrency Types
42. Bitcoin (BTC)
The pioneering cryptocurrency (launched 2009) with the largest market cap.
44. Ethereum
A programmable blockchain supporting dApps and smart contracts via its native coin, Ether (ETH).
58. Stablecoin
Value-pegged cryptos like Tether (1 USDT ≈ $1).
59. Memecoin
Joke-based cryptocurrencies (e.g., Dogecoin) with no intrinsic value.
Trading & Market Concepts
56. Exchange
Platforms like Binance for trading crypto/fiat currencies.
60. Dollar Cost Averaging (DCA)
Regular fixed-amount investing regardless of price fluctuations.
72. Bull Market
Prolonged period of rising crypto prices.
76. Bear Market
Extended phase of declining cryptocurrency values.
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Security Threats
80. 51% Attack
When entities control >50% network hash rate, enabling transaction reversal and double-spending.
66. Double Spend
Fraudulent attempt to spend the same coins twice.
Frequently Asked Questions
What's the difference between PoW and PoS?
- PoW: Miners compete using computational power
- PoS: Validators are chosen based on staked coins
How do I secure my cryptocurrency?
- Use hardware wallets for large holdings
- Never share private keys
- Enable 2FA on exchanges
What makes blockchain secure?
- Decentralization prevents single-point failures
- Cryptographic hashing makes data tamper-evident
- Consensus mechanisms validate legitimate transactions
Notable Crypto Figures
81. Satoshi Nakamoto
Anonymous Bitcoin creator(s)
84. Vitalik Buterin
Ethereum founder
97. Justin Sun
TRON founder
98. Charles Hoskinson
Cardano (ADA) creator and Ethereum co-founder
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