Author: Robert D. Knight, Cointelegraph; Translated by: Baishui, Golden Finance
Getting to grips with cryptocurrency isn’t easy. Even if you’ve learned the difference between Bitcoin and Ethereum and proof-of-work and proof-of-stake, there’s still a ton of new terminology to learn and understand.
But even for fairly experienced cryptocurrency enthusiasts, there are still some terms that are difficult to understand. Here are seven terms that almost no one in the blockchain space fully or deeply understands.
Blobs
In the 1958 film starring Steve McQueen and the 1988 remake, the Blob is an amoeba-like jelly monster that terrorizes the residents of a small town, growing larger and redder as it devours them.
In cryptocurrency, especially Ethereum, blobs (binary large objects) are large chunks of data that are not needed by the Ethereum Electronic Virtual Machine (EVM). Blob data is kept on-chain for about 20-90 days and then deleted.
Source: John Irving
The result is a more cost-effective and scalable blockchain. As part of the Ethereum Dencum update, blobs are often discussed in the same breath as the next term on this list.
Blobs may also refer to blocks of data stored on decentralized storage systems such as IPFS or Filecoin. These blobs are encrypted and stored on multiple nodes.
Finally, blob can also refer to transaction blobs on Monero, which are binary data of transactions before they are broadcast to the network. Since Monero is a privacy chain, the structure of these blobs can remain anonymous.
And that’s a lot of blobs.
Rollups
Rollup is a way to process transactions on a Layer 2 protocol, freeing up valuable space on the base layer. Rollup folds transactions one by one on the second layer, sometimes dozens of times, and then rolls them together before sending the data back to Layer 1.
There are two main types of Rollups, optimistic and zero-knowledge (ZK) proofs.
Optimistic Rollup is a fairly clear term. It means that the Rollup operates with an “optimistic” approach, assuming that transactions are valid unless proven wrong by validators. Only in the event of a dispute do they check the validity of the transaction.
ZK Rollup proves transactions without revealing any transaction data. Hence, it is called “zero knowledge”.
ZK Rollup provides instant finality because cryptographic proofs guarantee that the data is valid.
In many ways, a Rollup is to your standard blockchain transaction what a Calzone is to your regular pizza slice. With a Rollup, you can fit more stuff in.
Byzantine Fault Tolerance
This is one of the classic terms of blockchain and a key feature of the technology, but for most people, they simply don’t take the time to think about it.
The Byzantine Generals Problem is a theoretical exercise that describes the difficulty of decentralized parties reaching consensus in the absence of a trusted centralized entity. That is, it grapples with the possibility that bad actors can create false information to produce undesirable outcomes in a given situation.
Specifically, generals without direct communication had to attack Byzantium simultaneously to achieve victory. If one of the generals retreated, or gave the signal to attack but then retreated, the battle would end in a rout; worse than if all the generals had coordinated their retreat.
On the left, if all the generals attack at the same time, they will win. On the right, if two generals mistakenly signal an attack and then retreat, the others will be routed. Source: Lord Belbury
Satoshi Nakamoto solved Bitcoin's Byzantine Generals' Problem by using a proof-of-work consensus mechanism. Creating blocks takes a lot of time and effort, so they have an incentive to provide accurate information.
Byzantine faults are errors in a decentralized computing system that show different errors or results to different participants, just like the Byzantine Generals Problem.
Therefore, Byzantine fault tolerance is the resilience of a computing system to the occurrence of such faults.
We hope this is not an overly Byzantine interpretation.
Original Danks Shard
Sharding is a method of dividing the ledger into smaller parts called shards.
But proto-danksharding is one of the most opaque terms in the crypto world’s vocabulary. The term isn’t particularly instructive. Is proto short for prototype? Is this the same dank in your favorite meme folder? Both assumptions are probably quite reasonable, but both are wrong.
First proposed by protolambda and Dankrad Feist, who named the idea after themselves, proto-danksharding is a transaction type that accepts the aforementioned blobs. The solution using blobs is intended to overcome Ethereum’s long-standing problems with high gas fees and low transaction throughput.
Layer 2 rollups use blobs to bundle transactions and submit them to the Ethereum base layer without overwhelming it.
But if proto-danksharding seems like a confusing and cryptic phrasing, you may choose to use a more instructive name for the process; EIP-4844.
On second thought, the term proto-danksharding isn't that bad.
DVT — Distributed Validator Technology
Most people in the cryptocurrency space are already familiar with validators who approve transactions in the proof-of-stake consensus model.
DVT takes this concept and spreads the process across multiple validators. As Lido describes it, DVT “as a system operates similarly to a multisig setup where validators are run.”
They call it “simple DVT,” but its simplicity remains a mystery.
Ultimately, DVT leverages multiple operators rather than relying on a single operator, thereby increasing resiliency and mitigating single points of failure.
Dynamic Resharding
Dynamic resharding isn’t your grandmother’s old sharding. Dynamic resharding is a relatively new term that the marketing team at Near Protocol calls “the holy grail of sharding,” but it also coined a new vocabulary that’s not immediately understandable.
Based on the concept of blockchain sharding, resharding occurs when the network adjusts the number of shards based on the load.
An overloaded shard can become two shards, and two underutilized shards can become one.
Nonce
Nonce is one of those terms that most people encounter in their early days of discovering cryptocurrency and then completely forget about, like the individual names of a bunch of people you just met at a party.
In the Bitcoin blockchain, the nonce is the number used in the block header, which is then cryptographically hashed. This is the number guessed through trial and error that is used to decide which miner generates the next block of blockchain.
The data structure of a Bitcoin block containing a random number. Source: Research Gate
Random number generation makes the mining process fairer and more transparent. This requires a lot of computing power and energy, and in some cases, miners may need to adjust the random number multiple times to solve a block.
