![Gaining an appreciation for the art of Blockchain [image credit: Namecoin / Flickr ]](https://staticr1.blastingcdn.com/media/photogallery/2017/12/9/660x290/b_502x220x82/gaining-an-appreciation-for-the-art-of-blockchain_1726841.jpg "Gaining an appreciation for the art of Blockchain [image credit: Namecoin / Flickr ]")
As Bitcoin and other blockchain based technologies gain interest and widespread corporate use, you will be hearing new terms almost daily. To keep up to speed on the conversation at the coffee bar, peruse this short list of necessary lingo. In just a few minutes you'll sound like an expert!
1. Blockchain
A decentralized, unchangeable record stored in unique blocks of data, also called a distributed ledger. Each block is highly encrypted and links to the previous and the next block, creating the “chain” in Blockchain.
2. Distributed Ledger
When a database is stored in multiple sites utilizing blockchain technology, it is called a distributed ledger.
The data is spread out into multiple “nodes” which are continuously self-auditing by checking their copy of the database against the others.
3. Smart Contracts
Utilizing a computer language rather than legalese, smart contracts document agreements across the blockchain. They are executed automatically when the defined conditions are met, creating a “trustless” platform for complex blockchain transactions. The Ethereum network is the most widely used platform to create smart contracts, but there are many others.
4. Confirmation
As individual transactions are verified and “hashed” by the network, they gain confirmations through the mining process. Once they receive a set number of confirmations, they become part of the immutable blockchain record and cannot be changed, hidden, or reversed.
5. Mining
Miners operate the decentralized nodes which make up the blockchain network. Using specialized computer setups these miners process, encrypt, and confirm the transactions. This process triggers the automatic reward of cryptocurrency, which pays the miners for their work.
6. Cryptocurrency
A decentralized form of digital currency based on the blockchain.
Bitcoin is the most famous example, but there are now thousands of Cryptocurrencies, coins, and tokens. These are issued through the mining process and are purchased by investors in ICOs (Initial Coin Offerings) or on exchanges.
7. Wallet
A wallet is a software interface which stores the users' private keys, displays cryptocurrency balances, and allows transactions to send coins in and out.
Some wallets are specific to one cryptocurrency, others support multiple coins and tokens. Remember that the coins don't live in the wallet, they exist on the blockchain assigned to the wallet address.
8. Private Key
A specific data string that allows access to a blockchain wallet. Never reveal your private key to anyone and keep a written copy locked up somewhere secret.
Wallets can be re-created on new hardware using the private key and/or a secret “seed phrase.” If the private key and seed phrase are lost, the coins still exist, but they cannot be accessed.
9. Address
When coins or tokens are transferred, the blockchain uses encrypted addresses to move assets on the network. Sometimes called a “Public Key,” your wallet address can be safely shared and used for payments.
This key is a long string of letters and numbers, but can also be rendered as a QR code for ease of use.
10. Transaction Fee
Most transactions on the blockchain network incur a small transaction fee, usually equivalent to a few cents. This is the payment to the miner who mines the block that contains your transaction, and those who confirm it. This is the only cost associated with the use of cryptocurrencies in a peer to peer manner.
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With these terms in your repertoire, you'll be ready to lead your friends to knowledge the next time you hear, "What is Blockchain anyway?"
