Reference
Glossary
66 terms used across Legion I.O.T, defined in plain language. Definitions are our own and kept short; the deep dives show the terms in context.
5
- 51% attack
- An attack in which one party controls enough of a proof-of-work network's computing power to rewrite recent history or block transactions.
A
- Atomic settlement
- A transfer in which the linked legs of a transaction either all complete or none do, so nobody is left holding half a trade.
- Authentication
- Proving that you are who you claim to be, or that a device or organisation is genuine.
- Proving or checking that an authenticated party has permission to do something.
B
- Biometrics
- Measurements of body characteristics, such as fingerprints or face geometry, used to recognise people.
- Blockchain
- A shared record built from blocks of transactions, each cryptographically linked to the one before it so that altering history would mean rewriting every later block.
- Byzantine fault tolerance
- The ability of a network to keep agreeing on the truth even when some participants are faulty or malicious, named after a classic thought experiment about generals who cannot trust every messenger.
C
- Central bank digital currency (CBDC)
- A digital form of a country's currency issued directly by its central bank, as opposed to bank deposits or privately issued crypto assets.
- Centralised finance (CeFi)
- Crypto services run by a company, such as an exchange or lender, that holds customer funds and operates under its own rules.
- Consensus mechanism
- The method a network uses to agree on which transactions are valid and in what order, without a single controlling authority.
- Crypto-agility
- Designing systems so cryptographic algorithms can be replaced quickly when they weaken, for example in response to quantum computers.
- Custody
- Safekeeping of digital assets, either by the owner (self-custody) or by a regulated provider that holds the keys on the owner's behalf.
- Cyber resilience
- An organisation's ability to keep operating through a cyberattack, and to recover and adapt afterwards, not only to prevent attacks.
D
- Decentralised finance (DeFi)
- Financial services such as lending, borrowing and trading delivered by smart contracts on public ledgers rather than by a traditional institution.
- Decentralised identifier (DID)
- A W3C standard for an identifier that its owner controls and that can be verified without a central registry.
- Delivery versus payment (DvP)
- A settlement arrangement in which an asset is delivered only if payment is made, and vice versa, so neither side is left exposed.
- Digital signature
- A value created with a private key that proves a message came from the key's owner and has not been altered.
- Distributed ledger technology (DLT)
- The wider family of shared databases that many parties hold copies of and update by agreed rules. Blockchain is one design; others include directed acyclic graphs and hashgraphs.
E
- Edge computing
- Processing data close to where it is produced, such as on a device or local gateway, instead of in a distant data centre.
- Electronic transferable record
- A digital document, such as a bill of lading, that the law treats as equivalent to a paper document that conveys rights to goods or money.
F
- Federated Byzantine agreement
- A consensus model in which each node chooses the others it trusts and only settles a transaction when enough of those trusted nodes agree. The Stellar Consensus Protocol is built on it.
- Fork
- A change to a ledger's rules or a split of its history. A hard fork is not backward compatible; a soft fork is.
H
- Hardware wallet
- A dedicated physical device that stores private keys offline and signs transactions without exposing the keys to a connected computer.
- Hash function
- A one-way mathematical function that turns data of any size into a fixed-size fingerprint. Changing the data even slightly changes the fingerprint.
I
- Internet of Things (IoT)
- Everyday physical objects fitted with sensors and network connections so they can collect and exchange data.
- Interoperability
- The ability of different ledgers, systems or standards to exchange data and value with each other.
- ISO 20022
- An international standard for the structure of financial messages, used so that payment instructions are understood across systems.
- Istanbul BFT (IBFT)
- A Byzantine-fault-tolerant consensus protocol used with Quorum in which a set of validators vote on each block and a committed block is final. Project Khokha used it.
K
- KYC and AML
- Know-your-customer and anti-money-laundering checks that financial firms use to verify who their customers are and monitor for illicit activity.
L
- Layer 2
- A system built on top of a base ledger to make transactions faster or cheaper, settling back to the base layer periodically.
N
- Node
- A computer that takes part in a ledger network by storing data, checking transactions or both.
- Non-fungible token (NFT)
- A token that represents a unique item or right and cannot be swapped one-for-one with another token.
O
- Oracle
- A service that feeds real-world data, such as prices or delivery confirmations, to a smart contract.
P
- Parametric insurance
- Insurance that pays out when a measured trigger is met, such as rainfall below an agreed level, instead of after a loss is assessed.
- Passwordless authentication
- Signing in without typing a shared secret. Instead, a device proves it holds a private key by signing a one-time challenge from the site.
- Pedersen commitment
- A cryptographic technique that hides a number inside a sealed value while still letting others verify that sums of such values add up correctly.
- Permissioned ledger
- A ledger where only approved, identified participants can read, write or validate. Common among banks and enterprises.
- Permissionless ledger
- A ledger anyone can join, read and (subject to the rules) help validate, such as Bitcoin or Ethereum.
- Post-quantum cryptography
- Cryptographic methods designed to remain secure against attacks by quantum computers.
- Programmable money
- Money that can carry rules about when and how it may be spent, such as payments released only when delivery is confirmed.
- Proof of stake
- A consensus method in which participants lock up funds as a stake and risk losing it if they cheat, replacing most of the computing effort used in proof of work.
- Proof of work
- A consensus method in which participants spend computing effort to earn the right to add a block, making rewriting history expensive. Bitcoin uses it.
- Public key infrastructure (PKI)
- The systems of certificates and authorities that bind public keys to identities so that others can trust them.
- Public-key cryptography
- A system using a matched pair of keys: a public key that anyone can see and a private key that its owner keeps secret. It underpins digital signatures and wallets.
Q
- Quantum key distribution (QKD)
- A technique that uses quantum properties of light to share encryption keys in a way that reveals eavesdropping.
- Qubit
- The basic unit of quantum information, which can exist in a combination of states until measured.
- Quorum slice
- In federated Byzantine agreement, the group of nodes that one node relies on before it treats something as settled.
R
- Range proof
- A cryptographic proof that a hidden number lies within an allowed range, for example that a payment is not negative, without revealing the number.
- Real-time gross settlement (RTGS)
- A system in which large payments between banks settle individually and immediately in central bank money. South Africa's is called SAMOS.
- Real-world asset (RWA)
- A physical or off-chain financial asset, such as property, bonds or commodities, represented by tokens on a ledger.
S
- Selective disclosure
- Sharing only the specific facts a verifier needs, for example that you are over 18, rather than the whole document.
- Self-sovereign identity
- An approach to digital identity in which individuals hold and control their own credentials rather than relying on one platform's account.
- Settlement finality
- The point at which a payment can no longer be reversed. Operational finality is about the system; legal finality is about the law.
- Single window
- A national platform where traders submit trade information once to all the agencies involved in clearing goods.
- Smart contract
- A program stored on a ledger that carries out agreed terms automatically when its conditions are met.
- Stablecoin
- A privately issued token designed to hold a steady value, usually by being pegged to a currency and backed by reserve assets.
T
- Token
- A unit of value or rights recorded on a ledger. It may represent a currency, a share, a ticket, a claim on a physical asset or access to a service.
- Tokenisation
- Representing an asset, such as a bond, a property title or central bank money, as tokens on a ledger so it can be transferred digitally.
- Tokenised deposit
- A commercial bank deposit recorded as a digital token on a ledger. It stays a liability of the bank, unlike a central bank currency or a stablecoin issued by a non-bank.
U
- Unique Node List (UNL)
- In the 2014 Ripple consensus design, the list of other servers that one server consults when deciding which transactions to accept. Only votes from that list count.
V
- Verifiable credential
- A standard digital format for a claim, such as a licence or qualification, that can be cryptographically checked by anyone who receives it.
- Virtual voting
- A consensus technique in which each node works out how others would vote from the shared record of messages, instead of sending separate voting messages.
W
- Wallet
- Software or hardware that holds the keys needed to prove ownership of assets on a ledger and to authorise transfers.
- Wholesale CBDC
- A digital form of central bank money for banks and other financial institutions, used for large-value settlement rather than for the public.
Z
- Zero trust
- A security approach that assumes no user, device or supplier is trusted by default and checks every request, including from inside the network or supply chain.
- Zero-knowledge proof
- A way to prove a statement is true without revealing the underlying information that makes it true.