The world of blockchains is full of technical jargon, which can make blockchain technology hard to get one’s head around. For those trying to understand how blockchains work, it could be vital to understand some of these terms.
Below are 10 blockchain terms defined in simple English
1. Bitcoin
Bitcoin is the first and most well-known cryptocurrency – created in 2009 by a mysterious figure named Satoshi Nakamoto. Every Bitcoin transaction is recorded on the Bitcoin blockchain, which was the first ever public blockchain to be developed. As of 2025, the Bitcoin blockchain is around 665 Gigabytes in size.
2. Blockchain
What exactly is a blockchain? A blockchain is pretty much a digital ledger that is used to record transactions. Information on each transaction is stored within a block. Each block then becomes part of a chain (hence the word ‘blockchain’). Blockchains are decentralized and data stored in each block cannot be altered, making them one of the most secure ways of storing information.
3. Cryptocurrencies
Cryptocurrencies are digital currencies that include the likes of Bitcoin, Ether and Litecoin. They were created as a decentralized currency that could be traded online between countries without having to pay currency transfer fees. Every cryptocurrency has its own value and is supported by its own blockchain.
4. dApp
dApp stands for ‘decentralized application’. Unlike regular apps that use a centralized server, dApps run on a blockchain so that no single entity has control over the software. This post lists a few examples of dApps.
5. Decentralized
Blockchains, cryptocurrencies and dApps are all ‘decentralized’ – which means that data on them is distributed and stored across a network of computers instead of a single server. This means that no single person or organization has control over them. In the case of blockchains, this helps to provide security and transparency.
6. Ethereum
Ethereum is a popular blockchain. Just as the Bitcoin blockchain is used to store information on Bitcoin transactions, the Ethereum blockchain is used to store transactions for its own native cryptocurrency called Ether. However, unlike Bitcoin, Ethereum can also support dApps and smart contracts. Because of this, it is much bigger in size – around 1.3 terabytes.
7. Proof of Stake (PoS)
In order for a block in a blockchain to be created, a transaction has to be validated using one of two security mechanisms: proof of stake (PoS) or proof of work (PoW). PoS has become the most popular method among modern blockchains, as it is more energy-efficient. Transactions are validated by randomly selecting validators who are willing to stake large amounts of cryptocurrency – encouraging each validator to act honestly.
8. Proof of Work (PoW)
Proof of work (PoW) is the most traditional form of transaction validation. It involves getting validators known as ‘miners’ to compete with each other to validate transactions by solving complex puzzles using high-powered computers. The miner that solves the puzzle the fastest is rewarded with newly minted cryptocurrency. This form of transaction validation is used by Bitcoin’s blockchain – although effective, it uses much more energy and is less eco-friendly than PoS.
9. Smart contract
Smart contracts are legal contracts supported by blockchains. They are a great way of sharing legal contracts online because the information in each contract cannot be tampered with once it is created. All parties involved can meanwhile use the blockchain to view all previous contracts.
10. Superchain
It’s possible for different blockchains to be interconnected to form a ‘superchain’. Using a superchain, an app can have enhanced efficiency and functionality. This list of superchains gives a few examples.
Conclusion
These are just some of the fundamental Blockchain terms used within blockchain technology. There are many other terms you can look up – however knowing the above basic terms will make it easier to expand your knowledge.
