Glossary

Ada

The name of our currency, named in honor of Ada Lovelace.

Address

The unique identifier of a node. Please read about Addresses in Cardano SL for more info.

Block

A fundamental part of a Ledger. Please read about Blocks in Cardano SL for technical details.

Blockchain

Please see Ledger.

Cardano SL

Cardano SL (or Cardano Settlement Layer) is a decentralized cryptographic currency designed and developed by IOHK. Named in honor of Gerolamo Cardano.

Consensus Algorithm

A way for a decentralized system to reach a consistent view on shared collections of data. Cardano SL uses the Ouroboros Consensus Algorithm, which is an algorithm based on Proof of Stake.

Cryptocurrency

A computer system which uses cryptographic protocols to generate a ledger. Please read about Cryptocurrency Basics for more info.

Daedalus

Cardano SL wallet application. It provides a GUI for users, so they can access their funds, send and receive transactions, etc. Please read about wallets in Cardano for more info.

Decentralization

A notion of a computer system operating through interaction of independent nodes. In case of maintaining a shared data collection such as a ledger, a consensus is required for consistency and reliability of data.

Epoch

A bigger period of time for which we know in advance who will have the right to generate a block in each slot. Please read paper (page 3) for technical details.

Follow The Satoshi

A mechanism whereby stakeholders are selected at random to forge a new block in the blockchain, with a proportional chance to get elected depending on their amount of stake in the protocol.

Kademlia

Please see Peer Discovery.

Leader Election

A process of picking who will generate blocks during the next epoch. Leaders are elected with a probability proportional to their stake (see Proof of Stake, Follow the Satoshi).

Ledger

A collection of data that keeps track of value assigned to individuals. Please read paper (page 32) for technical details.

Lovelace

Name of a smallest unit of our currency. Named in honor of Ada Lovelace.

Minting

A process of a new block creation in Proof of Stake systems.

Node

A computer program that participates in a decentralized protocol system. Please read High-level technical overview for more details.

Paper

Official protocol report Ouroboros: A Provably Secure Proof-of-Stake Blockchain Protocol. Please notice that Cardano SL implementation differs from the paper, read about differences for more details.

Peer Discovery

A way how a node can find other nodes after running. Peer discovery we use is based on Kademlia DHT. Please read a Kademlia paper for technical details.

Plutus

Strictly typed pure functional programming language used for defining smart contracts in Cardano. Please read about Plutus for more info.

Proof of Stake

To generate data in a decentralized environment, election of a temporary authority is required. This temporary authority shall tell which data should be included into the shared collection. In the case of cryptocurrencies, the data included is transactions. A group of transactions is called a block, and a collection of the blocks the ledger can be derived from is called a blockchain.

An important idea of “Proof of Stake” is that the more value one has, the more chances one has to maintain the ledger (i.e. to be able to produce a new block and add it to the blockchain).

For example, the user Alice has some money in her wallet, let’s say 12 units, and the user Bob has 10 units in his wallet. Both Alice’ wallet and Bob’s wallet can be chosen to add a new block to the blockchain (strictly speaking, a new block is added by a node, not by a wallet). But the probability of actually choosing the particular node is determined by the percentage of the total value in the system this node owns. By this percentage we mean “all the value held by wallets on the particular node divided by the total value in the system”. This relative value is called stake, and the node chosen to produce a new block is called a slot leader.

Signing

A way to generate a proof of genuine authenticity of any kind of information we use in cryptocurrency.

Slot

A small period of time that is significantly larger than the expected difference in clocks on different nodes. Please read paper (page 4) for technical details.

Slot Leader

A slot leader is a node which was elected to have a right to create a block in the current slot. Please read paper (page 7) for technical details.

Transaction

The data that represents the act of transferring value. Please read about Transactions in Cardano SL for more info.