Layer 2 Scaling

Blockchain

A distributed, immutable digital ledger that records transactions across a network of computers without a central authority.

Distributed Ledger Technology

A digital system for recording, sharing, and synchronising data across multiple sites without a central administrator.

Consensus Mechanism

The method by which a distributed network agrees on the current state of the ledger and validates transactions.

Proof of Work

A consensus mechanism requiring computational effort to validate transactions and create new blocks, used by Bitcoin.

Proof of Stake

A consensus mechanism where validators are selected based on the amount of cryptocurrency they hold and stake.

Delegated Proof of Stake

A consensus mechanism where token holders vote for delegates who validate transactions on their behalf.

Byzantine Fault Tolerance

The ability of a distributed system to reach consensus despite some nodes acting maliciously or failing.

Merkle Tree

A hash-based data structure that efficiently verifies the integrity and consistency of large sets of data.

Hash Function

A mathematical function that converts input data of any size into a fixed-size output, used extensively in blockchain security.

Cryptographic Hash

A one-way function producing a fixed-length output that is computationally infeasible to reverse or find collisions for.

Public Key Cryptography

An encryption system using mathematically linked key pairs — a public key for encryption and a private key for decryption.

Digital Signature

A cryptographic mechanism that verifies the authenticity and integrity of digital messages or documents.

A decentralised oracle network that connects smart contracts with external data sources, APIs, and payment systems.

A cryptocurrency token that grants holders voting rights on protocol decisions and changes.

A blockchain-based token that provides access to a specific product, service, or platform functionality, rather than representing ownership or investment rights.

A cryptocurrency designed to maintain a stable value by pegging it to a reserve asset like a fiat currency.

Converting rights to real-world assets into digital tokens on a blockchain for fractional ownership and trading.

The practice of using already-staked cryptocurrency to simultaneously secure additional protocols or services, extending the economic security of one network to others.

Networks that use blockchain token incentives to coordinate the deployment and operation of physical infrastructure such as wireless networks, energy grids, and compute resources.

A digital asset on a blockchain that represents ownership of a regulated financial instrument such as equity, debt, or revenue share, subject to securities laws.

Throughput

The actual rate of successful data transfer across a network in a given time period.