Business Applications of Blockchain and Tokenization
Expert-defined terms from the Professional Certificate in AI-Enabled Blockchain Asset Tokenization course at LearnUNI. Free to read, free to share, paired with a globally recognised certification pathway.
Algorithm #
A set of rules or procedures that a computer program follows to solve a problem or perform a task. In the context of blockchain, algorithms are used to secure transactions and create new blocks in the chain.
Asset Tokenization #
Asset tokenization is the process of converting the ownership of a physical or digital asset into a digital token on a blockchain. These tokens represent ownership of the underlying asset and can be traded or transferred easily.
Blockchain #
A decentralized and distributed digital ledger that records transactions across a network of computers. Each transaction is recorded in a "block," which is linked to the previous block, forming a chain of blocks. This technology ensures transparency, security, and immutability of data.
Consensus Mechanism #
A process by which all participants in a blockchain network agree on the validity of transactions and the order in which they are added to the blockchain. Common consensus mechanisms include Proof of Work (PoW) and Proof of Stake (PoS).
Cryptocurrency #
Digital or virtual currency that uses cryptography for security and operates independently of a central authority. Cryptocurrencies are typically decentralized and based on blockchain technology.
DApp (Decentralized Application) #
An application that runs on a decentralized network, such as a blockchain. DApps use smart contracts to automate processes and execute transactions without the need for intermediaries.
Decentralization #
The distribution of control and decision-making across a network of nodes, rather than relying on a central authority. Decentralization is a key feature of blockchain technology, ensuring transparency and security.
Digital Identity #
A unique representation of an individual or entity in the digital world. Digital identities can be verified and authenticated using blockchain technology, enabling secure access to services and resources.
Distributed Ledger #
A type of database that is spread across multiple sites, regions, or participants in a network. Distributed ledgers are used in blockchain technology to record and track transactions in a transparent and secure manner.
Encryption #
The process of converting information into a code to prevent unauthorized access. Encryption is used in blockchain technology to secure transactions and protect data from tampering.
ERC #
20: A technical standard used for smart contracts on the Ethereum blockchain. ERC-20 tokens are fungible and can be easily exchanged with other tokens that comply with the same standard.
Hash Function #
A mathematical algorithm that converts an input (data) into a fixed-size string of characters. Hash functions are used in blockchain technology to create unique identifiers for blocks and transactions.
Immutable #
Unable to be changed or altered. In the context of blockchain, immutability refers to the inability to modify or delete data once it has been recorded on the blockchain.
Initial Coin Offering (ICO) #
A fundraising method in which a company issues digital tokens or coins to investors in exchange for funding. ICOs are commonly used to raise capital for blockchain and cryptocurrency projects.
Interoperability #
The ability of different blockchain networks to communicate and share data with each other. Interoperability ensures seamless integration between various blockchain platforms and applications.
Mining #
The process of validating transactions and adding them to the blockchain through cryptographic calculations. Miners compete to solve complex puzzles and earn rewards in the form of new cryptocurrency coins.
Node #
A computer or device that participates in a blockchain network by storing a copy of the blockchain and validating transactions. Nodes communicate with each other to maintain the integrity and security of the network.
Private Key #
A unique string of characters that allows a user to access and control their cryptocurrency holdings. Private keys must be kept secure and confidential to prevent unauthorized access to digital assets.
Proof of Stake (PoS) #
A consensus mechanism in which participants in a blockchain network validate transactions and create new blocks based on the number of cryptocurrency coins they hold. PoS is an energy-efficient alternative to Proof of Work.
Proof of Work (PoW) #
A consensus mechanism in which participants in a blockchain network compete to solve complex mathematical puzzles to validate transactions and create new blocks. PoW is the original consensus algorithm used in Bitcoin.
Smart Contract #
Self-executing contracts with the terms of the agreement directly written into code. Smart contracts are deployed on a blockchain and automatically enforce the terms of the contract without the need for intermediaries.
Token #
A digital asset or representation of value issued on a blockchain. Tokens can represent ownership of assets, access to services, voting rights, or other functions within a decentralized network.
Transaction #
An exchange of data or value between two parties on a blockchain network. Transactions are recorded in blocks and added to the blockchain after being validated by network participants.
Wallet #
A digital tool or application that allows users to store, send, and receive cryptocurrencies. Wallets can be hardware devices, software programs, or online services that provide secure access to digital assets.