I found the idea tree, as a data structure, interesting. It probably maps better to our brain, where one term can be linked to another. Within this post, I will try to draw a mindmap for the “techincal jargons” (techical words that belong to a field) of blockchain, in the hope that it can bring some values to myself and my readers.

In short, we have this picture:


I did my best to include a small amount of terms that are considered important. These terms can be used as a base, a root to build our understanding of blockchain on.


Bitcoin, the original blockchain is built on this term: “decentralized ledger”. We are familiar with our bank as a “centralized ledger”, in where our transactions are recorded in one place.

Decentralized Ledger

In its simplest sense, the end result of a ledger looks like this:

A: 40
B: 0
C: 100

Where we can find how much is “A” having within an instant. The content of the ledger itself looks like this:

A -> B: 20
B -> C: 40
C -> A: 10

Where each transaction is recorded, and we can build the end result from those transaction. Be “centralized” means the end result (how much is one having) and the content of the ledger (who transferred to whom) is stored in one place, (a “normal” bank to be precise), and it risks us that the storge’s owner can… change the number.

It means our money is not really controlled by us, and “decentralized ledger” comes to our rescue! The transactions that build our needed end result is not stored at one place anymore. Multiple “nodes” (or transactions storing machine) store does it for us.

Let us assume that we are done with “decentralized ledger”, and come to another question: if multiple machines store those transactions, how do they agree on new ones?

Proof of Work

Our last question can be rephrased as: How do the machines that store our transactions aggree on newly-written transactions? The answer is that: let those machines agree on a common set of rule for a newly-written transaction.

If the newly-written transaction comes too easy, everyone can generate a valid history themself. We come to the conclusion: let the process hard. Coming up with the newly-written transaction is challenging, needs a lot of “work”, and that is the “proof” of its validity.

It is Proof of Work.

People do not like to let their machines work for free. Those machines are rewarded, and called “miners”.


I consider Ethereum a “generation 2” blockchain, since it upgrades “decentralized ledger” to “decentralized computer”, and comes up with “Proof of Stake” to replace “Proof of Work”. There are a lot of “Ethereum killers”, but I think they are not novelty enough, or at the writing time (March of 2022), I could not find one yet.

Decentralized Computer

Our question is: what if we store code along with transactions? The answer is Ethereum Virtual Machine and its bytecode. With “immutable” code, we are sured that the computation is also immutable.

“Smart contract” is nothing but that: immutable code. “Token” is the “truer” “virtual currency” on immutable code. “Non-fungible Token” is another “virtual currency”, that are “non-fungible”, a deed of who is owning what.

Proof of Stake

Proof of Work is condemned for its resource wasteness. Proof of Stake hopes to solve that by letting the rule be: if a machine “stake” some “coin” (let some of its owned “coins” be locked), it is the needed “proof” to let it write a new transaction.

A machine that does the work is called “validator”.


A better name for the post might let the title’s “blockchain” be replaced with “cryptocurrency”. I slacked. Sorry for that. It might also raised more question on:

  • How does one actually use Bitcoin/Ethereum to buy something?
  • What is “crypto trading”?
  • What is “decentralized finance”?

Many more, but let us hope that the questions actually exist, and I got over my laziness to write another part of on this.