Rational choice theoryRational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory originated in the eighteenth century and can be traced back to political economist and philosopher, Adam Smith. The theory postulates that an individual will perform a cost-benefit analysis to determine whether an option is right for them. It also suggests that an individual's self-driven rational actions will help better the overall economy. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.
BlockchainA blockchain is a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leaves). Since each block contains information about the previous block, they effectively form a chain (compare linked list data structure), with each additional block linking to the ones before it.
RationalityRationality is the quality of being guided by or based on reasons. In this regard, a person acts rationally if they have a good reason for what they do or a belief is rational if it is based on strong evidence. This quality can apply to an ability, as in rational animal, to a psychological process, like reasoning, to mental states, such as beliefs and intentions, or to persons who possess these other forms of rationality.
Bounded rationalityBounded rationality is the idea that rationality is limited when individuals make decisions, and under these limitations, rational individuals will select a decision that is satisfactory rather than optimal. Limitations include the difficulty of the problem requiring a decision, the cognitive capability of the mind, and the time available to make the decision. Decision-makers, in this view, act as satisficers, seeking a satisfactory solution, with everything that they have at the moment rather than an optimal solution.
Double-spendingDouble-spending is a fundamental flaw in a digital cash protocol in which the same single digital token can be spent more than once. Due to the nature of information space, in comparison to physical space (as in: valuable physical resources), a digital token (like a file) is inherently almost infinitely duplicable or falsifiable, leading to ownership of said token itself being undefinable unless declared so by a chosen authority. As with counterfeit money, such double-spending leads to inflation by creating a new amount of copied currency that did not previously exist.
Bitcoin networkThe Bitcoin network is a peer-to-peer network of nodes which implement the Bitcoin protocol. The protocol itself implements a highly available, public, and decentralized ledger. The nodes verify that each update to the ledger follows the rules of the Bitcoin protocol. Users broadcast cryptographically signed messages to the network using Bitcoin cryptocurrency wallet software. These messages are proposed transactions, changes to be made in the ledger. Each node has a copy of the ledger's entire transaction history.
Rational agentA rational agent or rational being is a person or entity that always aims to perform optimal actions based on given premises and information. A rational agent can be anything that makes decisions, typically a person, firm, machine, or software. The concept of rational agents can be found in various disciplines such as artificial intelligence, cognitive science, decision theory, economics, ethics, game theory, and the study of practical reason. In reference to economics, rational agent refers to hypothetical consumers and how they make decisions in a free market.
Fork (blockchain)In blockchain, a fork is defined variously as: "what happens when a blockchain diverges into two potential paths forward" "a change in protocol", or a situation that "occurs when two or more blocks have the same block height" Forks are related to the fact that different parties need to use common rules to maintain the history of the blockchain. When parties are not in agreement, alternative chains may emerge. While most forks are short-lived some are permanent.
EthereumEthereum is a decentralized blockchain with smart contract functionality. Ether (Abbreviation: ETH; sign: Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software. Ethereum was conceived in 2013 by programmer Vitalik Buterin. Additional founders of Ethereum included Gavin Wood, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin. In 2014, development work began and was crowdfunded, and the network went live on 30 July 2015.
Tunneling protocolIn computer networks, a tunneling protocol is a communication protocol which allows for the movement of data from one network to another. It involves allowing private network communications to be sent across a public network (such as the Internet) through a process called encapsulation. Because tunneling involves repackaging the traffic data into a different form, perhaps with encryption as standard, it can hide the nature of the traffic that is run through a tunnel.
Rational emotive behavior therapyRational emotive behavior therapy (REBT), previously called rational therapy and rational emotive therapy, is an active-directive, philosophically and empirically based psychotherapy, the aim of which is to resolve emotional and behavioral problems and disturbances and to help people to lead happier and more fulfilling lives. REBT posits that people have erroneous beliefs about situations they are involved in, and that these beliefs cause disturbance, but can be disputed and changed.
Rational expectationsRational expectations is an economic theory used to explain how individuals make predictions about the future based on all available information. It states that individuals will also learn from past trends and experiences in order to make the best possible prediction about what will happen. They could be wrong sometimes, but that, on average, they will be correct. The concept of rational expectations was first introduced by John F. Muth in his paper "Rational Expectations and the Theory of Price Movements" published in 1961.
Communication protocolA communication protocol is a system of rules that allows two or more entities of a communications system to transmit information via any variation of a physical quantity. The protocol defines the rules, syntax, semantics, and synchronization of communication and possible error recovery methods. Protocols may be implemented by hardware, software, or a combination of both. Communicating systems use well-defined formats for exchanging various messages.
Peer-to-peerPeer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the network. This forms a peer-to-peer network of nodes. Peers make a portion of their resources, such as processing power, disk storage or network bandwidth, directly available to other network participants, without the need for central coordination by servers or stable hosts.
Cardano (blockchain platform)Cardano is a public blockchain platform. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, ADA. Cardano's development began in 2015, led by Ethereum co-founder Charles Hoskinson. The project is overseen and supervised by the Cardano Foundation based in Zug, Switzerland. When launched in 2017, it was the largest cryptocurrency to use a proof-of-stake blockchain, which is seen as a greener alternative to proof-of-work protocols.
Collision attackIn cryptography, a collision attack on a cryptographic hash tries to find two inputs producing the same hash value, i.e. a hash collision. This is in contrast to a where a specific target hash value is specified. There are roughly two types of collision attacks: Classical collision attack Find two different messages m1 and m2 such that hash(m1) = hash(m2). More generally: Chosen-prefix collision attack Given two different prefixes p1 and p2, find two appendages m1 and m2 such that hash(p1 ∥ m1) = hash(p2 ∥ m2), where ∥ denotes the concatenation operation.
Solana (blockchain platform)Solana is a blockchain platform which uses a proof-of-stake mechanism to provide smart contract functionality. Its native cryptocurrency is SOL. Solana was launched in 2020 by Solana Labs, which was founded by Anatoly Yakovenko and Raj Gokal in 2018. The blockchain has experienced several major outages, was subjected to a hack, and a class action lawsuit was filed against the platform. Solana's total market cap was in January 2022. However, by the end of 2022, this had fallen to around $3 billion following the bankruptcy of FTX.
Transmission Control ProtocolThe Transmission Control Protocol (TCP) is one of the main protocols of the Internet protocol suite. It originated in the initial network implementation in which it complemented the Internet Protocol (IP). Therefore, the entire suite is commonly referred to as TCP/IP. TCP provides reliable, ordered, and error-checked delivery of a stream of octets (bytes) between applications running on hosts communicating via an IP network. Major internet applications such as the World Wide Web, email, remote administration, and rely on TCP, which is part of the Transport Layer of the TCP/IP suite.
Secure multi-party computationSecure multi-party computation (also known as secure computation, multi-party computation (MPC) or privacy-preserving computation) is a subfield of cryptography with the goal of creating methods for parties to jointly compute a function over their inputs while keeping those inputs private. Unlike traditional cryptographic tasks, where cryptography assures security and integrity of communication or storage and the adversary is outside the system of participants (an eavesdropper on the sender and receiver), the cryptography in this model protects participants' privacy from each other.
Game theoryGame theory is the study of mathematical models of strategic interactions among rational agents. It has applications in all fields of social science, as well as in logic, systems science and computer science. The concepts of game theory are used extensively in economics as well. The traditional methods of game theory addressed two-person zero-sum games, in which each participant's gains or losses are exactly balanced by the losses and gains of other participants.
