A pseudonymous individual or entity who created the Bitcoin protocol, solving the digital currency issue of the “double spend.” Nakamoto first published their white paper describing the project in 2008 and the first Bitcoin software was released one year later.
A change in size or scale to handle a network’s demands. This word is used to refer to a blockchain project’s ability to handle network traffic, future growth, and capacity in its intended application.
Seed (phrase) / Secret Recovery Phrase
The seed phrase, mnemonic, or Secret Recovery Phrase is a crucial part of public blockchain technology, originally created for Bitcoin, and goes by many names. However, they all refer to a set of ordered words which correspond to determined values. These values never change, and therefore the same string of words in the same order will always produce the same number–this is the underlying functionality that allows seed phrases to back up wallets. The Secret Recovery Phrase is exactly what it sounds like: something that is secret, and should be known only to the owner of the account. If the seed phrase is given to someone else, that person has complete control over the account; they can drain it of tokens and funds, execute transactions with it, etc.
Functioning by itself, not controlled by any other party other than itself. Self-executing smart contracts cut costs/overhead by removing the need for an arbitrator and trust toward a third party.
The process of converting a data structure into a sequence of bytes. Ethereum internally uses an encoding format called recursive-length prefix encoding (RLP).
Sharding refers to splitting the entire network into multiple portions called “shards.” Each shard would contain its own independent state, meaning a unique set of account balances and smart contracts. Usually, shards must be tightly coupled and side-chains must be loosely coupled.
A sidechain is what it sounds like — it is a separate blockchain that is Ethereum-compatible. While a sidechain is a sort of scaling tool, as a class they aren’t part of Layer 2; they simply represent a way in which developers can build and enable cheaper transactions for the user (on the sidechain, in sidechain-native tokens or currencies) while maintaining compatibility with the Ethereum network. This often requires routing tokens through a special portal or bridge, as sending tokens from a sidechain to Ethereum mainnet or vice versa would result in token loss.
Under a Proof of Stake (PoS) consensus mechanism, a slashing condition is one that causes the validator’s deposit to be destroyed when they trigger it. See also ‘Proof of Stake’.
A slot, on the Ethereum Beacon Chain, is a 12-second period of time during which a new block may (or may not) be proposed. Every 32 slots composes an epoch. See also ‘epoch’.
Smart contracts are programs whose terms are recorded in computer code. While they often contain agreements or sets of actions between parties that emulate a traditional legal contract, they are not, in and of themselves, legal documents. Smart contracts are automated actions that can be coded and executed once a set of conditions is met, and are the dominant form of programming on the Ethereum Virtual Machine.
A change to the software protocol where only previously valid blocks/transactions are made invalid. Since old nodes will recognize the new blocks as valid, a soft fork is backward-compatible. However, this can result in a potential divide in the blockchain, as the old software generates blocks that read as invalid according to the new rules.
The programming language developers use to write smart contracts on the Ethereum network. Try it out on Remix. See also ‘smart contract’.
Any cryptocurrency pegged to a stable asset, like fiat currency or gold. It theoretically remains stable in price as it is measured against a known amount of an asset less subject to fluctuation. Always spelled as one word.
In the Ethereum context, ‘staking’ of tokens or currency carries the traditional meaning of ‘setting aside currency for a determined purpose’; however, ‘staking’ can happen in a variety of venues with different effects. For example, on decentralized exchanges (DEXes), there is no centralized authority or bank putting up the funds to allow transfers to happen between parties; rather, the parties amongst themselves have to establish liquidity pools in order to facilitate swaps. In this context, someone might ‘stake’ tokens into a liquidity pool, often for a promised rate of return in exchange for the use of their tokens, with the option to withdraw their tokens later.
On the Beacon Chain and Ethereum 2.0, ‘staking’ means something a bit different: 32 ETH may be staked at a determined smart contract address in order to operate a validator on the Beacon Chain; in this way, you help ensure the good functioning and safety of the network, and are rewarded for your staking.
The set of data that a blockchain network strictly needs to keep track of, and that represents data currently relevant to applications on the chain.
State channels are part of the set of tools and platforms involved in scaling Ethereum and enabling Layer 2. While a complex topic, state channels are essentially methods through which the current ‘state’ of the blockchain can be exported, and based on that any given number of transactions can take place off-chain, and then be moved back onto the main Ethereum chain.
A denomination of ETH. See also ‘ether (denominations)’.