Terminology for Cryptoassets

Document Type Active Internet-Draft (individual)
Authors Hirotaka Nakajima  , Masanori Kusunoki  , Keiichi Hida  , Yuji Suga  , Tatsuya Hayashi 
Last updated 2021-07-04
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Network Working Group                                        H. Nakajima
Internet-Draft                                               Mercari R4D
Intended status: Informational                               M. Kusunoki
Expires: January 5, 2022                                             JDD
                                                                 K. Hida
                                                                 Y. Suga
                                              Advanced Security Div, IIJ
                                                              T. Hayashi
                                                           July 04, 2021

                      Terminology for Cryptoassets


   This document provides terminology used in cryptoassets.

Status of This Memo

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   include Simplified BSD License text as described in Section 4.e of
   the Trust Legal Provisions and are provided without warranty as
   described in the Simplified BSD License.

Table of Contents

   1.  Introduction  . . . . . . . . . . . . . . . . . . . . . . . .   2
   2.  Conventions and Definitions . . . . . . . . . . . . . . . . .   2
   3.  Terms and Definitions . . . . . . . . . . . . . . . . . . . .   2
   4.  Symbols and abbreviated terms . . . . . . . . . . . . . . . .   7
   5.  Security Considerations . . . . . . . . . . . . . . . . . . .   7
   6.  IANA Considerations . . . . . . . . . . . . . . . . . . . . .   7
   7.  References  . . . . . . . . . . . . . . . . . . . . . . . . .   7
     7.1.  Normative References  . . . . . . . . . . . . . . . . . .   7
     7.2.  Informative References  . . . . . . . . . . . . . . . . .   7
     7.3.  URIs  . . . . . . . . . . . . . . . . . . . . . . . . . .   8
   Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . .   8
   Authors' Addresses  . . . . . . . . . . . . . . . . . . . . . . .   8

1.  Introduction

   Our goal with this document is to improve our understanding on a set
   of terms which frequently used in documents which related to
   cryptoassets.  Mutual understanding about terminology may help to
   reach a consensus on issues we're trying to solve.

2.  Conventions and Definitions

   The key words "MUST", "MUST NOT", "REQUIRED", "SHALL", "SHALL NOT",
   "OPTIONAL" in this document are to be interpreted as described in BCP
   14 [RFC2119] [RFC8174] when, and only when, they appear in all
   capitals, as shown here.

3.  Terms and Definitions

   address:  An identifier to represent a public key in a blockchain

   administrator:  It is a person who conducts operational maintenance
      of the system with the authority to change the system settings.
      From the viewpoint of mutual checking, there are administrators
      with different authorities depending on the subjects to be
      managed.  See also: operator.

   asymmetric cryptography:  Defined in [RFC4949] as "A modern branch of
      cryptography (popularly known as "public-key cryptography") in
      which the algorithms use a pair of keys (a public key and a

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      private key) and use a different component of the pair for each of
      two counterpart cryptographic operations (e.g., encryption and
      decryption, or signature creation and signature verification). "

   block:  A basic unit of the blockchain.  A set of transactions on a
      blockchain which contains a cryptographic hash value of the
      previous block.

   blockchain:  An ordered series of data chains constructed that
      attackers cannot alter by cryptographic algorithms.  A type of
      distributed ledger.

   confirmation:  Approval works defined by the consensus algorithm.  A
      status that blocks and transactions in a certain block are
      approved by miners and users of the blockchain network.

   consensus:  Agreements among nodes in the blockchain network.

   cryptoasset:  A digital representation of values that can be
      exchanged or transferred digitally, realized by a distributed
      ledger such as blockchain utilizing cryptography or similar

   cryptoassets custody service:  Business to manage the kind of

   cryptoassets custodian:  The business entities that operate the
      cryptoasset custody business.

   cryptoassets custody system:  The information system that responsible
      for the cryptoasset custody business.

   cryptoassets exchange:  A function for exchanging fiat currencies and
      cryptoassets, and also exchanging cryptoassets with each other.

   cryptoassets exchange service provider:  A business entity that
      operates a cryptoasset exchange.

   deterministic wallet:  See: wallet

   digital signature:  Defined in [RFC4949] as "A value computed with a
      cryptographic algorithm and associated with a data object in such
      a way that any recipient of the data can use the signature to
      verify the data's origin and integrity."

   distributed ledger:  A distributed database about cryptoassets with
      agreed processed.

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   double spending:  Defined in [MasteringBitcoinOnline] as "result of
      successfully spending some money more than once." fiat currency:
      Currency which has been established by the government or other

   fork:  A branch of a ledger.  Ledger branching may occur accidentally
      or by specification changes.

   accidental fork:  A case where a block is accidentally mined at about
      the same time, and a plurality of chains coexist temporarily.  It
      occurs on a daily basis and converges to the longest chain by re-

   soft fork:  A branch caused by specification change of blockchain.
      It does not affect wallet implementation.

   hard fork:  A branch caused by a specification change without the
      forward compatibility of the blockchain, which may affect the
      wallet implementation in addition to the miner.  There is a case
      where a plurality of chains continue to coexist permanently
      because there is no consensus between developers regarding the
      case where the majority of nodes stay in the specification change
      by following the hard fork, we call it split.  Examples of typical
      splits include the division of Ethereum and Ethereum Classic in
      The DAO case of 2016, the division of Bitcoin and Bitcoin Cash in
      2017, and so on.  The new coin born by division is called a fork

   genesis block:  An initial block on a blockchain.  Genesis block may
      differ to distinguish chains.

   hash value:  Defined in [RFC4949] as "The output of a hash function."

   hash rate:  Amount of a hash value which node is able to generate per
      unit of time (generally per second)

   hierarchy deterministic wallet:  See: wallet

   mining:  A process to append a received transaction to a block by
      validating a transaction with agreed consensus rules such as
      proof-of-work and proof-of-stake.

   miner:  A network node which contributes its resources to mining.

   multisignature:  Defined in [MasteringBitcoinOnline] as "requiring
      more than one key to authorize a bitcoin transaction".  In this
      scope, the transaction is not limited to a bitcoin transaction.

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   node:  A device that connects to the blockchain network.Note that the
      node has a different meaning in the context of expression about
      the Merkle tree.

   off-chain transaction:  The movement of value outside of the

   on-chain transaction:  The movement of value on the blockchain

   operator:  It is a person who performs routine tasks based on
      authority as a normal task.  See also: administrator.

   orphan block:  Defined in [MasteringBitcoinOnline] as "Blocks whose
      parent block has not been processed by the local node, so they
      can't be fully validated yet."

   permissioned-chain:  A blockchain that only specified members can
      join the blockchain network.

   permissionless-chain:  See: permissioned-chain

   public-chain:  An open blockchain that anyone can retrieve all of
      blocks and transactions without special privileges.

   public key:  Defined in [RFC4949] as "The publicly disclosable
      component of a pair of cryptographic keys used for asymmetric

   private-chain:  In contrast with "public-chain", A closed blockchain
      that only qualified users can access blocks and make transactions.

   private key:  Defined in [RFC4949] as "The secret component of a pair
      of cryptographic keys used for asymmetric cryptography."

   proof-of-stake:  Defined in [MasteringBitcoinOnline] as "method by
      which a cryptocurrency blockchain network aims to achieve
      distributed consensus."

   proof-of-work:  Defined in [MasteringBitcoinOnline] as "A piece of
      data that requires significant computation to find."

   reorganization:  The convergence into one chain based on a certain
      consensus from multiple chains that are temporarily branched.

   reward:  Value by the blockchain network which assigned to a miner
      who successfully validates a transaction.  Rules may differ among
      blockchains and consensus rules.

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   side-chain:  See off-chain

   smart contract:  A guaranteed digital procedure that automatically
      enforced on a blockchain network.

   soft fork:  See: fork

   token:  1) Data that represents the amount of cryptoassets like ERC20
      specification, 2) Data used in the API as one of the factors with
      the authentication process.

   transaction:  Defined in [MasteringBitcoinOnline] as "More precisely,
      a transaction is a signed data structure expressing a transfer of

   incoming transaction:  Transfer of cryptoassets from other addresses
      to one's own address.

   outgoing transaction:  Transfer of cryptoassets from one's own
      address to other addresses.

   validation:  Checking the accuracy and consistency of given
      transactions and blocks.  Specifically, it is general to verify
      the integrity of data to be digital-signed and also the integrity
      of other transactions and blocks.  By verifying a transaction
      repeatedly, it is possible to verify blocks in the transaction.

   validated:  See: validation

   validator:  See: validation

   wallet:  A mechanism that handles a key pair of a public key and a
      secret key used for transmitting cryptoassets and such a key pair.

   hot wallet:  A wallet that is online connected to the network, the
      key is activated, and operators can coin out the cryptoassets by
      automatic processing.

   cold wallet:  A wallet that is disconnected from the network and the
      key is inactivated.  It can not be coined out unless there is an
      explicit operation by the operator.  The frequency of outgoing
      coins is limited.  Between hot wallet and cold wallet, there are
      various intermediate forms such as a wallet that is online, but
      requires manual operation at the time of signing a transaction,
      the wallet that is offline but the operation is automated, and
      warm wallet.

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4.  Symbols and abbreviated terms

   AML  Anti-Money Laundering

   API:  Application Programming Interface

   CFT:  Counter Financing of Terrorism

   DAO:  Distributed Autonomous Organization

   DLT:  Distributed Ledger Technologies

   HD:  Hierarchy Deterministic (wallet)

   PKI:  Public Key Infrastructure

5.  Security Considerations

   This document defines terminology for cryptoassets.  Therefore, there
   is no security considerations.

6.  IANA Considerations


7.  References

7.1.  Normative References

   [RFC2119]  Bradner, S., "Key words for use in RFCs to Indicate
              Requirement Levels", BCP 14, RFC 2119,
              DOI 10.17487/RFC2119, March 1997,

   [RFC8174]  Leiba, B., "Ambiguity of Uppercase vs Lowercase in RFC
              2119 Key Words", BCP 14, RFC 8174, DOI 10.17487/RFC8174,
              May 2017, <https://www.rfc-editor.org/info/rfc8174>.

7.2.  Informative References

              Antonopoulos, A., "Mastering Bitcoin", March 2018,

   [RFC4949]  Shirey, R., "Internet Security Glossary, Version 2",
              FYI 36, RFC 4949, DOI 10.17487/RFC4949, August 2007,

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7.3.  URIs

   [ref-1]    , <https://cgtf.github.io/>.


   Thanks to members of the Cryptoassets Governance Task Force [ref-1]
   for help and feedback.

Authors' Addresses

   Hirotaka Nakajima
   Mercari, Inc. R4D
   Roppongi Hills Mori Tower 21F
   6-10-1 Roppongi
   Minato, Tokyo  106-6125

   Email: nunnun@mercari.com

   Masanori Kusunoki
   Japan Digital Design, Inc.
   Nihonbashi Talk Building
   3-3-5, Nihonbashi-Hongokucho

   Email: masanori.kusunoki@japan-d2.com

   Keiichi Hida
   Japan Blockchain Association

   Email: hida@jba-web.jp

   Yuji Suga
   Advanced Security Division, Internet Initiative Japan Inc.
   Iidabashi Grand Bloom,
   2-10-2 Fujimi
   Chiyoda, Tokyo  102-0071

   Email: suga@iij.ad.jp

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   Tatsuya Hayashi
   Lepidum Co. Ltd.

   Email: hayashi@lepidum.co.jp

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