What are the technical terms underlying digital currency?

The underlying technical terms of digital currency include: blockchain (distributed ledger technology), consensus mechanism (agreement to achieve consistency), cryptography (data protection and verification), private key (access to wallet), public key (verify transactions), wallets (store digital currency), miners (maintain the blockchain network), smart contracts (automatically execute programs), and tokens (blockchain assets).

Underlying technical terms of digital currency

Blockchain
Blockchain It is an immutable distributed ledger technology used to record transaction data. It consists of a chain of blocks called blocks, each block containing a set of transactions and the hash of the previous block.

Encryption algorithm
Encryption algorithm is used to protect the security of transactions on the blockchain network. The most commonly used algorithms include SHA-256, RSA, and elliptic curve cryptography (ECC).

Consensus mechanism
The consensus mechanism is an algorithm used to reach transaction consensus. The most common consensus mechanisms include Proof of Work (PoW) and Proof of Stake (PoS).

Decentralization
Decentralization means that the blockchain system has no central authority. All participants own a copy of the network, and transactions are verified by the entire network.

Hash function
The hash function is an algorithm that maps arbitrary length data to a fixed-length output. Hash functions are used to generate unique identifiers for blocks in a blockchain.

Mining Pool
A mining pool is a group of miners who join together to mine cryptocurrency. Mining pools increase the chances of miners finding blocks and receiving rewards.

Node
A node is a computer or device in a blockchain network that stores and verifies transaction records.

Private Key
A private key is a digital currency owner’s private code used to access and control their funds.

Public Key
A public key is the public code of the owner of a digital currency and is used to receive and send transactions.

Wallet
A wallet is a software or hardware device used to store and manage digital currencies.

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