Understanding mining requires understanding its language. This glossary defines the core terms used across Proof of Work networks, explained clearly and concisely.
An ASIC (Application-Specific Integrated Circuit) is a specialized microchip designed to perform one specific task, and in cryptocurrency mining it is used to calculate a blockchain’s hashing algorithm as fast and efficiently as possible.
ASIC-Resistant describes a mining algorithm designed to reduce the advantage of ASIC miners, so that hardware like CPUs or GPUs can still compete and mining stays more decentralized.
An address is a unique identifier for a wallet in a cryptocurrency network, used to send and receive transactions.
An algorithm is a set of rules or instructions that a computer follows to solve a problem or complete a task.
A block is a data structure that contains a collection of transactions and is added to the blockchain.
A blockchain is a decentralized, distributed ledger that records all transactions across a network of computers.
Base block reward + block fees.
A base block reward is the amount of cryptocurrency awarded to a miner for successfully adding a new block to the blockchain.
Block fees are the transaction fees paid by users to have their transactions included in a block.
The block size refers to the maximum amount of data that can be included in a single block on the blockchain.
The block height is the number of blocks that have been added to the blockchain since the genesis block.
The block time is the time it takes to mine a new block on the blockchain.
The block header contains metadata about the block, including the previous block's hash, a timestamp, and the nonce.
The block hash is a unique identifier for a block on the blockchain, generated by applying a cryptographic hash function to the block's header.
A CPU (Central Processing Unit) is the primary component of a computer that performs most of the processing inside a computer.
A coinbase transaction is a special type of transaction that is created by a miner when they successfully mine a new block.
Consensus is the process by which a decentralized network agrees on the state of the ledger.
A confirmation is the number of blocks that have been added to the blockchain since a particular transaction was included.
The circulating supply of a cryptocurrency is the total amount of coins that are currently in circulation and available for usage.
Double spending is the fraudulent act of spending the same digital currency more than once.
A developer fee is a small percentage of what you earn that is paid to the developers of a project(for example, a mining software).
An explorer is a web-based tool that allows users to search and view information about transactions, blocks, and addresses on the blockchain.
An epoch is a period of time during which a set of rules or conditions applies to the blockchain.
Effort is the amount of computational work put into mining a block.
Field-Programmable Gate Array
A fork is a change to the protocol of a blockchain that results in a split of the network into two separate chains.
Full Pay Per Share
A full node is a computer that runs the complete blockchain protocol and validates all transactions and blocks.
Graphics Processing Unit
The first block in a blockchain, which serves as the foundation for the entire chain.
The output of a cryptographic hash function, which is used to uniquely identify data in the blockchain.
The rate at which a mining device can perform hashing operations, typically measured in hashes per second.
A scheduled event in some cryptocurrencies where the reward for mining a new block is reduced by half.
An input is a piece of data that is provided to a transaction in the blockchain.
A job is a package of data sent by a mining pool to a miner that contains everything needed to start calculating hashes and try to find a valid block.
The delay between a user's action and the system's response(for example, the time a share takes to reach the pool).
The degree to which a miner's earnings are influenced by random chance rather than computational power.
The memory pool is a collection of transactions that have been received by the node but not yet included in a block.
A miner is a participant in the blockchain network who uses computational power to validate transactions and create new blocks.
The process of validating transactions and creating new blocks in a blockchain network.
A technique that allows miners to mine multiple cryptocurrencies simultaneously using the same computational resources.
Specialized software used by miners to participate in the mining process.
A group of miners who combine their computational resources to increase their chances of finding a block and earning rewards.
A facility that houses a large number of devices used for cryptocurrency mining.
The maximum number of coins that will ever be created in a cryptocurrency.
A number that is used once in a cryptographic communication.
A computer in a blockchain network that maintains a copy of the ledger and participates in validating transactions.
The entire system of computers connected to a blockchain network.
The total computational power of the blockchain network, measured in hashes per second.
The level of difficulty required to mine a new block in the blockchain network.
A block that is not included in the main blockchain because it was not the first to be validated.
The result of a transaction or operation in the blockchain.
Proportional.
Pay Per Last Number(N) Shares.
Pay Per Share.
Pay Per Share Plus.
A cryptographic key that is publicly shared and used to verify digital signatures.
A cryptographic key that is kept secret and used to sign transactions.
A consensus mechanism where miners compete to solve a computational puzzle to validate transactions and create new blocks.
The total computational power of a mining pool.
The practice of switching between different mining pools to maximize profits.
A node that does not store the entire blockchain history, only the most recent blocks.
A fee charged by a mining pool for managing the mining operation and distributing rewards.
The ability of a cryptographic system to resist attacks from quantum computers.
Return on Investment
A period during which mining rewards are distributed.
A share that is submitted to the mining pool but is not accepted for reward purposes.
A unit of work submitted by a miner to a mining pool.
SOLO mining
A protocol used by mining pools to communicate with miners.
The difficulty level of a share submitted by a miner to a mining pool.
A share that is submitted to the mining pool after it has already been accepted by another miner, making it invalid for reward purposes.
A system where participants can interact without trusting each other.
A record of a transfer of value between two parties on the blockchain.
A fee paid by the sender of a transaction to incentivize miners to include the transaction in a block.
The practice of reducing the voltage supplied to a device to save power and potentially increase efficiency.
A block that is not included in the main blockchain but is still valid and can be used as a reference.
Unspent Transaction Output
Vardiff (Variable Difficulty) is a system used by mining pools that automatically adjusts the difficulty of the shares a miner submits, so both small and powerful miners send shares at a steady and manageable rate.
A digital wallet used to store, send, and receive cryptocurrencies.
The computational effort required to solve a cryptographic puzzle in a proof-of-work blockchain.