Network

A network, from a cryptocurrency perspective, is a collection of nodes that work together to facilitate the operation of the network.

A network is also a general term that describes all blockchain networks, such as the Bitcoin network or the Ethereum network.

How a blockchain network operates is determined by the network protocol, which is a set of rules that allows nodes on a network to share data and create the structure that we know as a blockchain.

The Bitcoin network, for example, is a peer-to-peer (P2P) network, made up of computers (or network nodes) running the Bitcoin Core software.

All the computers in the Bitcoin network are connected to each other, allowing them to “talk” to each other and share and pass along data.

Related Terms

Peer-to-Peer (P2P)

Describes the sharing of data or assets between 2 or more parties without any central authority making the transaction happen. P2P exchanges tend to offer transactions that are censorship resistant, cheap, private, and secure.

Bitcoin (BTC)

Bitcoin (BTC) is most well known as a digital decentralized cryptocurrency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries, such as payment gateways or banks or routing services. Think of bitcoin as Internet money, that you can send and receive directly, to and from anyone, and you can use it to pay for stuff.

Full Node

A type of node that participates in a blockchain network, performing some function for the network, like securing the network or validating transaction data. A full node stores a complete copy of the blockchain data. Information about every block and the recorded transactions within each block is available in the full copy of the blockchain.

Distributed Ledger Technology

A database that is used to record transactions across a network of devices, usually computers or servers. “Distributed” refers to how the nodes (or computers or servers) of the network are designed architecturally, and where they are located geographically. “Ledger” in this context, and traditionally, simply refers to a centralized database that is used to store financial records, such as a company’s financials, liabilities, revenues, owner’s equity, and other financial information. Now, combine the two ideas and you have a ledger that is distributed across many devices, instead of one device, in many different locations, possibly around the world. Even if one of those locations disappears, or a computer or server goes down, the ledger is still intact, still secure, and the data stored within the ledger can still be processed, validated, and authenticated to.

Soft Fork

In relation to blockchain technology, a soft fork involves introducing changes to a blockchain’s underlining protocol or software that are minor in nature. These software updates can take the form of new blockchain functionality, upgrades to network performance, enhancements that correct security issues, or even changes to the consensus rules that govern how blocks are created and validated on a blockchain. Forks are necessary for providing decentralized blockchains a way to make changes to the blockchain since there isn’t a central authority governing all aspects of blockchain development and evolution.