Glossary of blockchain terms in supply chain traceability

Chris Stretton

Talking about blockchain can feel like trying to speak a foreign language, so we’ve created this blockchain glossary to help you confidently talk about using blockchain technology to ensure supply chain traceability. 

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

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B

Blockchain: A digital ledger that stores and synchronises valid transactions (data composed of blocks) across a network of devices (referred to as nodes) rather than on a single server. Blockchains are either public or private.

C

Centralised: A system controlled from a single point of authority and control or a group of parties.

Computationally hiding: A form of cryptography that protects information but with the assumption that a hacker does not have unlimited computing power or time available. So with enough computing power e.g. with a quantum computer, something that is computationally hiding could be deciphered. 

Cryptocurrency: A digital form of money designed to represent a tradable value within a network. These are usually decentralised and therefore operate independently of any central authority or bank. 

Cryptography (crypto): The field of secure communication methods designed to ensure data is only revealed to those who are intended to see it.

D

Decentralised: A system where decisions are made from no single point, but as an aggregate result of the network. A decentralised network has no single owner of information and no central authority, meaning trust does not have to be placed in a single party when using the network. 

E

Ethereum: A public blockchain that allows the production of decentralised applications that use smart contracts. The platform uses Ether as its local currency to incentivise use and maintenance.

G

Gas fees: A fee for work done in order to add information to a blockchain. The fee is paid to the operator who performs the calculation that validates new information being added to the blockchain.

I

Interoperable: The functional communication between different systems, even if they are not using the same application or software.

M

Mining: The act of performing complex mathematical calculations which validate information being added to the blockchain. This generates new cryptocurrency for the operator as a reward.

Minting: The creation of a new packet of information (token) on a blockchain. This is the virtual equivalent of minting a physical coin. 

P

Peer-to-peer: The direct connection between two users of a system without a third party acting as an intermediary.

Perfectly hiding: A form of cryptography that protects information from being read by someone that should not, regardless of the computational power or time that they have available. 

Private blockchain: A closed, normally centralised blockchain that is controlled and managed by a single entity or a group of parties. 

Proof-of-Stake (PoS) : A way to achieve consensus when someone wishes to add new data (blocks) to a blockchain, where a cryptocurrency owner can stake their holdings to validate their authority to add data to the network and earn a reward in the process. This is the means by which transactions are verified on the Ethereum 2.0 network.

Proof-of-Work (PoW): A way to achieve consensus when someone wishes to add new data (blocks) to a blockchain, by using computer power to solve highly complex mathematical problems to validate the individual's authority to add data. A reward is also earned in the process (referred to as mining). This is the means by which transactions are verified on the original Ethereum network.

Public blockchain: An open, normally decentralised blockchain that can be read and written by anyone with internet access where data (blocks) cannot be amended or deleted.

S

Smart contracts: Programs that automatically conduct an action once certain conditions are met.

Smart Questioning: Circularise’s patent-pending method of using Zero-Knowledge Proofs (ZKP) to share essential and useful insights into product and material information throughout a supply chain over a public blockchain without sharing any specific data.

T

Token: A packet of data or a virtual asset that is owned by a user.

Transparency: One of the main characteristics of a public blockchain is that all information is public and can be viewed by anyone.

Trustless: Blockchain allows transactions to be performed between two parties that do not trust each other, the trust is placed in the cryptography to perform the action, not an individual.

W

Wallet: A personal storage area for tokens owned by an individual.

Z

Zero-knowledge proofs (ZKP): a form of perfectly hiding encryption that allows sharing of useful insights into information without sharing any specific data. ZKPs can be used to share insight into the environmental impact of a product or material without sharing any specific data on the composition or manufacturing processes of a product.