Glossary

This glossary defines and explains concepts and terminology that are specific to decentralized computing, blockchain technology, Kadena, or the Kadena ecosystem.

An account is an entry in the Kadena coin contract ledger—a key-value store—that consists of:

The keyset specifies the signing requirements for the account and consists of one or more public keys and a predicate that indicates the number of keys that must sign a transaction for the account.

In the Ethereum network, an address serves as both an identity and an account.

The address is derived from the last 20 bytes of the ECDSA public key that controls the account prepended with 0x before the hashed key. For example, you might have an address similar to 0x71C7656EC7ab88b098defB751B7401B5f6d8976F on Ethereum. You must have an address—sometimes referred to as your wallet address—to send or receive funds and to access the funds, you must have the corresponding private key.

Contracts deployed on the Ethereum network also send and receive transactions using an address. The functions in the contract are executed when the contract receives a transaction request. Contract addresses use the same format as wallet addresses.

Application-specific integrated circuits (ASIC) are engineered to perform one type of computation to optimize performance. In a proof-of-work blockchain like Kadena, computers are often optimized with application-specific integrated circuits to compute hash functions for mining blocks.

Bitcoin is the world’s very first cryptocurrency, postulated by ‘Satoshi Nakamoto’ (which is typically presumed to be a pseudonym) in a now-famous white paper called ‘A Peer-to-Peer Electronic Cash System’ in 2008.

A ‘blockchain’ is a distributed digital ledger that’s used to record transactions. It’s an immutable database, which means that information can’t be tampered with or altered once it’s been recorded. If there’s an error in an entry, then a new, revised entry must be made, and both entries will subsequently be visible on the ledger.

The name comes from the fact that a blockchain stores data in ‘blocks,’ individual units that are linked, or ‘chained,’ together. New data is filed into blocks – and blocks are subsequently chained together – in chronological order, so a blockchain becomes longer and longer as more information is added to it. Each new piece of information is also assigned a timestamp, which makes it easy for users to find out exactly when it was linked to the database. The transparency and immutability of the blockchain makes it a very reliable and trustworthy business resource both for individuals and companies. Kadena is an example of a blockchain.

A bridge, in a web3 context, is a protocol which links blockchain systems together, allowing users from one system to send assets and information to another.

Capabilities provide a way to manage permissions and authorize certain actions based on specific conditions and separate from transaction signing. Capabilities are a core feature in the Pact smart contract programming language.

The numeric identifier for a specific chain in the Kadena network. Currently, the chain identifiers are zero (0) through nineteen (19).

A consensus mechanism is a system that validates transactions and encodes new information on a blockchain. The most common consensus mechanisms are Proof-of-Work (PoW) and Proof-of-Stake (PoS). Kadena uses Proof-of-Work.

Cryptocurrency is a digital currency secured on a blockchain. The blockchain uses cryptographic proof to secure the currency. This prevents the double spending issue for digital currencies where a currency unit is used for multiple payments without being used up. This is where the cryptocurrency name derives from. Anyone can make a cryptocurrency and they are regulated only by their underlying protocol or DAO. KDA is an example of a cryptocurrency.

A crypto wallet is a software program or physical device that allows you to store your digital assets and allow for the sending and receiving of crypto transactions. A crypto wallet consists of two key pairs: private keys and public keys.

A decentralized application, colloquially called a dapp, is an application constructed on the blockchain. Dapps function autonomously, according to the stipulations in smart contracts. Like any other application on your phone, dapps come with a user interface and are designed to provide some kind of practical utility.

Financial services and applications that are not, or mostly not, controlled centrally, as in Centralized Finance. For example, Uniswap is a decentralized exchange, versus Coinbase which is a centralized exchange.

Generally, refers to a method of management that has rules coded in software and that has decision making which is not centralized or hierarchical.

Gas is a unit of measurement that represents the computational effort required to complete a transaction. How much a user spends to complete a transaction is determined by the total amount of gas multiplied by the gas price.

Formal verification uses mathematical methods to evaluate all possible paths and outcomes produced by the logic in a a program or smart contract. With formal verification, developers can mathematically verify whether their code works as expected or contains bugs that produce unexpected results. Blockchain applications that handle assets with real world value should include formal verification in the software development process.

Hardware wallets are physical devices that are designed to securely store secret keys. Typically, hardware wallets are considered more secure devices than desktop or smartphone wallets because they aren't used to connect to the internet. By not allowing internet access, hardware wallets reduce the attack vectors malicious parties can use to attempt to tamper with the device remotely.

Interoperability refers to the ability of multiple blockchains to cooperate and exchange information with one another, enabling virtual assets (such as non-fungible tokens [NFTs]), avatars and other pieces of code to move seamlessly from one platform to another.

Keys are long strings of numbers used to access the Web3 products stored in your wallet. There are two forms of keys:

A public key functions like your bank account number, with the private key being your PIN code. These keys are randomly generated and so can be hard to memorize. Therefore most wallets employ a string of words known as a “seed phrase” to act as a passcode to your keys.

A keyset is a Pact construct used to authorize transactions. A keyset consists of one or more public keys and a predicate function that describes the authorization policy for the keys in the keyset. For example, if a keyset has three public keys and the keys-all predicate, then all three keys must sign a transaction for the transaction to be valid. Pact provides three default keyset predicates: 

Smart contract module authors can define additional predicates.

(L1) blockchains are the foundations of multi-level blockchain frameworks. They can facilitate transactions without support from other blockchain networks. All layer 1 blockchains – including Bitcoin and Ethereum – offer their own native cryptocurrency as a means of accessing their networks.

(L2) blockchains are built on top of layer 1 blockchains, often enhancing the latter’s performance and expanding its accessibility. Polygon, for example, is a popular layer 2 blockchain that allows users to enjoy the benefits of using the Ethereum network without having to go through that network’s relatively slow transaction speed and costly fees.

Mining is the process of validating a transaction in a proof of work blockchain. In mining, a large pool of users compete for tokens to see who can solve a cryptographic puzzle the quickest using computing power. The difficulty of the puzzle scales with the total hash power of the entire network, the hash rate.

The costs of mining are well documented, both in the exponential increase in computing power to continue mining and the detrimental environmental impact.

Non Fungible Token. Tokens that represent something unique, such as crypto art or collectibles. They cannot be exchanged for something identical. For example, CryptoPunks and Hashmasks.

Nodes are the computers used to secure a blockchain network. These are the engine of the blockchain, supplying the computing power to maintain it, validating transactions, and maintaining the consensus of the blockchain that keeps it secure.

The more nodes a blockchain has, the safer it is. However, this increases the computational complexity, amount of energy used, and thus the price for making each transaction.

An oracle is any application that provides data from outside the blockchain or vice-versa. Blockchains can only access data available on their own chains, and so need oracles to add outside or off-chain data. A typical use case is smart contracts that need to incorporate real-world data or bridges that require information from another blockchain to perform an exchange.

For example, if a stablecoin needs to keep its value constantly connected to the amount of collateral available to that coin, it would need an oracle to identify how much of that collateral is available. This is because knowledge of the collateral amount is off-chain data that has to be translated to data usable by the blockchain.

Read-eval-print-loop (REPL) is an interactive shell that enables you to run and test code in a terminal. In most cases, a REPL is an interpreter for a specific language or compiler that enables you to write and execute programs from a command-line interface.

Smart contracts are self-executing contracts formed using a blockchain. A smart contract is a program that can automatically execute agreements on the blockchain without external oversight, as long as the originally set parameters of the contract are fulfilled. The blockchain ensures that the contract has been considered trustworthy – the validation method and the transparent ledger of previous transactions create the necessary trust.

A token is an electronic proof of asset ownership. These are typically split into two types. Fungible tokens like Kadena are identical, exchangeable tokens; non-fungible tokens (NFTs) are unique and cannot be reproduced.

While not every blockchain has a token, most deploy a form of token to take advantage of their utility value.

Uses for tokens include:

The expiration time—in seconds—for how long a transaction should be considered valid for inclusion in a block after its creation time. In most cases, transactions are processed and included in block in approximately 30 seconds and don't require changes to the default TTL. However, the maximum time a transaction can wait to be included in a block is 48 hours after its initial creation.

A portmanteau of the words 'token' and 'economics,' tokenomics refers to all the aspects of a cryptocurrency that can impact the price such as total supply, vesting, and utility.

The Trilemma refers to the problem every blockchain has in having to compromise on either security, decentralization, or scalability. Coined by Vitalik Buterin, one of the Ethereum co-founders, the trilemma points to each of the issues being interconnected:

Kadena’s innovative PoW consensus mechanism called Chainweb makes it the only blockchain to have solved the infamous blockchain trilemma.