Blockchain Glossary, T

Public and private blockchains, Dapps, ICO software


Usually ‘transaction’ means money transfer.
For Bitcoin, e.g.:

The owner of account X initiates a transaction- he issues a command to transfer Y bitcoins to account Y.

The nodes check correctness of the transaction. E.g. the transaction will be rejected if you try to transfer 1 bitcoin from the account with zero balance.

If you set competitive miners commission (“gas”) for the transaction and other conditions are fulfilled, then the transaction will be “confirmed”.
And the balances of accounts X and Y will be changed properly.
Blockchains 2.0 have a wider spectrum of commands. You can also transfer tokens from one account to another or deploy the smart-contract in the blockchain.
A transaction is always initiated by some program instruction. Then the system check its correctness. After that the transaction is executed and the state of the blockchain changes.


What digital assets can you give to other individual? –

Loyalty points, shares or bank account balance. 
These digital assets has be stored and processed. Usually it is done by the centralized systems of retail chains or similar operators.

But any operation with digital asset can be implemented in blockchain!
Digital asset is a “token” in blockchain world.

You can buy tokens. And then you can sell it or buy some product/service for the tokens.
So two types of tokens exist: security tokens and utility tokens.
Security tokens are traded on exchanges and generate investors’ profit via its price fluctuations.
Such tokens are issued during ICO/ITO.

Otherwise, utility tokens are similar to tickets or vouchers. Such tokens can be spent only for specific services/products.
For example an investor buys 1000 tokens and later spends it for 1000 ad impression.

Strictly speaking, tokens are nothing more than amounts associated with addresses.
The tokens data structures can be easily created in blockchain and the logic of operations with tokens is described in smart contracts.

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