Blockchain 101: the blockchain data glossary

A block explorer is a tool that allows users to search for real-time and historical information about a blockchain, including data related to blocks, transactions, addresses, and more.

A powerful technology designed to make it easier for users to track the activities of specific entities (i.e., transactions, holdings, and other relevant data) and understand the overall state of the blockchain network).

The Elementus intelligent blockchain platform is the #1 market and data analytics solution. By combining the most comprehensive data set available with patented algorithms, our solution set enables financial institutions and crypto exchanges of any size to leverage the blockchain with ease and confidence – whether the goal is investigating on-chain activities, identifying risk, or discovering valuable market intelligence to create new revenue opportunities.

The way in which Elementus describes and displays the entire lineage of a transaction and helps to identify if a bad actor or participant is a part of it. This capability is critical to organizations across verticals that need to ensure compliance with regulatory requirements or simply want to avoid association with illicit or illegal activity on the blockchain.

Know Your Counterparty (KYC) refers specifically to the process of evaluating the risks associated with conducting business with another company or individual. This might include researching the company's ownership and management structure, financial stability, and any legal or regulatory issues it may have faced. By thoroughly vetting their counterparty, financial organizations can help mitigate anti-money laundering and reduce their risk of legal and reputational consequences.

Know Your Customer (KYC) is a process that financial institutions and other regulated companies use to verify the identity of their clients and assess their potential risks for money laundering or financing terrorism. The goal of KYC is to prevent these institutions from being used to facilitate financial crime by obtaining information about their clients and their financial activities. By thoroughly vetting their customers, financial organizations can help mitigate anti-money laundering and reduce their risk of legal and reputational consequences.

Know Your Transaction (KYT) is a process used to monitor and analyze financial transactions for signs of money laundering, financing terrorism, or other illicit activity. By monitoring and analyzing transaction data and other relevant information in real-time, financial organizations can identify unusual or suspicious activity that may signal some form of illegal activity and report these suspicious transactions to the appropriate authorities, helping to prevent the use of their systems and networks for illegal purposes.

A peel chain is a money laundering technique that attempts to avoid being flagged for anti-money laundering (AML) non-compliance and tax reporting by using a series of low-value transactions that are converted into other assets.

RapidRank is a patented technology that automatically tracks, flags, and ranks potentially malicious activity and delivers a risk assessment to help avoid high-risk entities and bad actors.

RapidTrace is a patented algorithm within the Elementus intelligent blockchain platform that can trace the flow of funds at the most granular level, providing financial services and crypto exchanges with powerful visualization of on-chain activities and insightful analytics to unlock both the power and promise of the blockchain.

Elementus’s proprietary technology enables organizations to reach a deeper level of attribution to all participants in any on-chain transaction to gain the most granular insights into these activities and mitigate risk.

Virtual Asset Service Providers are specific businesses that facilitate financial activities involving transactions made in digital assets. VASPs cover a broad range of services operating in the market today, including exchanges, wallet providers, and payment processors, and are often subject to regulatory laws in the locations in which they operate.‍

Walletcheck is a patented technology that monitors cryptocurrency wallets, including balances and transactional activity, and detects anomalies that can identify potentially malicious activity and bad actors.

A blockchain is a decentralized, distributed ledger (see: Distributed ledger) that facilitates the process of recording transactions and tracking assets in a business network.

A changer is a blockchain service that enables users to convert one type of cryptocurrency to another or trade cryptocurrencies for other cryptocurrencies. It’s important to note that some blockchain changer services are decentralized which enables them to be trustless and secure. They provide a peer-to-peer mechanism for trading, where users can trade assets directly with each other. The other types of blockchain changer services are centralized. This means that these exchanges are controlled by a central authority and are therefore vulnerable to hacking or other malicious activities.

The process of reaching an agreement among the participants in a blockchain network. A consensus mechanism such as proof of work (PoW) or proof of stake (PoS) secures the network and prevents unauthorized users from validating bad transactions.

A digital or virtual currency native to a blockchain or DLT that uses cryptography for secure financial transactions (eg, Bitcoin, Ethereum).

Blockchain technology relies on cryptographic techniques to secure the data on the ledger and protect it from tampering.

Also known as a DAO, is a form of blockchain cooperative where members buy their way in, most of the time purchasing a governance token specifically for the DAO that gives them the ability to vote on decisions that are made around how the pool of money is spent and managed.

A cryptocurrency exchange that has no central authority and allows anonymous trading.

Decentralized finance (DeFi) is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. By leveraging decentralized technologies, DeFi aims to provide financial services that are open, transparent, and accessible to everyone, regardless of their location or financial status. DeFi enables a wide range of financial activities and services, including lending and borrowing, trading, asset management, insurance, and reputation management.‍

A software program that stores a user's cryptocurrency and allows them to send and receive digital currency.

A database maintained by a computer network, rather than a single centralized server.

A platform that allows individuals to buy, sell, and trade cryptocurrencies. Exchanges can be marketplaces where buyers and sellers meet and trade cryptocurrencies at prices set by the market.

A mathematical function that takes an input of any size and produces an output of a fixed size to solve for a blockchain computation.

One of the key features of a blockchain is its immutability, which means that once data is recorded on the ledger, it cannot be altered or deleted.

The process of adding transactions to the blockchain and releasing new units of a cryptocurrency. Recovering these coins requires validating cryptocurrency transactions on a blockchain network and adding them to a distributed ledger to locate them.

A service that aims to increase the anonymity of a transaction by “mixing it” with the transactions of other users. This process makes it more difficult to trace the funds back to their original source but does not guarantee complete anonymity, as it is still possible for advanced users to trace the origin of these funds.

A “non-fungible token”, meaning a digital representation of a particular asset (both digital and physical assets) that is designed in a way that both ensures ownership and is not interchangeable.

A computer that is connected to the blockchain network and helps to validate and relay transactions. A blockchain node's primary job is to confirm the legality of each subsequent batch of network transactions, known as blocks.

A service that enables the acceptance of cryptocurrency payments for goods and services. The payment gateway converts cryptocurrency into the local currency, then deposits the funds into a merchant’s bank account. They also facilitate communication between the merchant's website and the blockchain network, ensuring that transactions are secure and properly recorded on-chain.

A “frictionless”, decentralized transaction model where two parties interact directly to complete a transaction without the need for third-party intermediaries.

A decentralized platform for buying and selling cryptocurrencies. A P2P (peer-to-peer) exchange provides the infrastructure and tools for individuals to trade directly with each other but does not take part in the trade itself, except for some cases in order to ensure the security of a transaction.

A long, secret string of characters that is used to decode messages encoded with the corresponding public key.

A long, publicly available string of characters that is used to encode messages.

A computer program that acts as a self-executing contract with the terms of an agreement between buyer and seller (such as the initial creation of a token or its transfer to a new owner) being directly written into lines of code.

Much like a cryptocurrency, a token represents a unit of ownership of a fungible or non-fungible tradable asset on a particular blockchain. Examples of tokens, or crypto tokens, include Tether, Cardano, and Polkadot.

Tokenization refers to the process of representing real-world assets or rights as digital tokens on a blockchain. Tokens are commonly used to indicate the ownership of a valuable asset.

A software tool that helps users manage multiple cryptocurrency wallets through a single, easy-to-use interface. It provides features such as viewing all of your wallets and their balances in one place, sending and receiving cryptocurrencies, and viewing transaction history.

Web3 is a term that is used to refer to the third generation of the World Wide Web, which is focused on the integration of blockchain technology and decentralized networks.