Basic knowledge of terms related to Cardano you must have. Along with the brief explanation, we have added external links from reliable resources available on the internet to make you understand better and effortlessly. We will keep updating the glossary list periodically until we have the complete one. Let us know if we have missed any term you would find helpful.
A
Ada is the native token of Cardano. ADA has six decimal places and its smallest unit (0.000001 ADA) is called Lovelace.1 ADA = 1,000,000 Lovelace.
E
Extended unspent transaction output model of Cardano.
Cardano (like Bitcoin) is an Unspent Transaction Output (UTXO)-based blockchain, which utilizes a different accounting model for its ledger from other account-based blockchains like Ethereum. Cardano implements an innovative Extended Unspent Transaction Output (EUTXO) model, which is introduced by the Alonzo upgrade to support multi-assets and smart contracts.
F
Fungible tokens are interchangeable and can be exchanged with any other token of the equivalent kind. For example, fiat currencies are fungible. For example, $10 notes are interchangeable with other $10 notes. Similarly, cryptocurriencies are fungible. For example, value of 10 ada tokens can be exchanged with other 10 ada tokens, which makes no difference for holders.
L
The smallest unit of ada, equivalent to one millionth of one ada. A lovelace is to ada what a satoshi is to bitcoin. 1 Lovelace = 0.000001 ADA
N
Native tokens is the feature that lets users create their own tokens on Cardano and these interact with the blockchain just like ada. Tokens can be fungible (interchangeable) or non-fungible (unique), and act as payment units, rewards, trading assets, or information holders. There is no need to create smart contracts to handle native tokens, which removes a layer of added complexity and potential for errors.
Non-fungible tokens (NFTs) are unique digital assets that are assigned unique identification codes and metadata, making them one-of-a-kind.
O
The consensus protocol underlying Cardano. There are several different implementations including Classic, Praos, Genesis, and more recently Hydra for scalability.
P
Plutus is the smart contract platform of the Cardano blockchain. It allows you to write applications that interact with the Cardano blockchain.
Peer-to-peer (P2P) networks are a type of decentralized network architecture that allows nodes to share and access resources directly without a central authority.
Cardano uses Dynamic P2P networking, which is an important evolution for Cardano and a further boost to the network's performance, resilience, and decentralization.
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