Glossary

The mechanism that allows for tokens (both coins & NFT’s) to be sent to a wallet, without the wallet owners input.

Alpha is a term used to describe the inside scoop.

Altcoin is a combination of the words "alternative" and "coin," referring to any cryptocurrency that is not Bitcoin.

While Bitcoin paved the way for cryptocurrencies, altcoins represent the vast array of digital assets that emerged after Bitcoin's groundbreaking introduction.

These alternative coins encompass a wide range of projects, each with unique features and goals.

Understanding Arbitrum

Arbitrum is a Layer 2 scaling solution that enhances the scalability and efficiency of the Ethereum blockchain. It achieves this through the implementation of optimistic rollups, a technology that enables faster and more cost-effective transactions while leveraging Ethereum's security and decentralisation.

Key Aspects of Arbitrum

1. Optimistic Rollups: Arbitrum utilises optimistic rollups to process and validate transactions off the Ethereum main chain. It aggregates multiple transactions into a single batch and submits them to Ethereum as a single proof. This significantly reduces congestion and lowers transaction fees.
2. Security and Compatibility: Arbitrum ensures the security of transactions by relying on Ethereum's robust consensus mechanism. It maintains compatibility with Ethereum's smart contracts and ecosystem, allowing DApps built on Ethereum to seamlessly migrate to Arbitrum with minimal modifications.
3. Ecosystem Expansion: Arbitrum's compatibility and scalability make it an attractive choice for developers and users. It enables new use cases, such as high-frequency trading, gaming, and DeFi, by providing a more efficient and cost-effective environment for executing transactions and interacting with smart contracts.

The word bearish is used to show scepticism or negativity.

Understanding Bitcoin

Bitcoin is a decentralised digital currency that operates on a peer-to-peer network, allowing for secure, transparent, and borderless transactions. It was introduced in 2009 by an anonymous individual or group using the pseudonym Satoshi Nakamoto. Bitcoin is not controlled by any central authority or government, making it resistant to censorship and manipulation.

Key Aspects of Bitcoin

1. Decentralisation: Bitcoin's decentralised nature eliminates the need for intermediaries such as banks or governments to facilitate transactions. Instead, it relies on a network of computers called nodes, which collectively validate and record transactions on a public ledger known as the blockchain.
2. Limited Supply: Bitcoin has a finite supply capped at 21 million coins. This scarcity, combined with increasing demand, has contributed to its value appreciation over time. New bitcoins are created through a process called mining, where miners validate transactions and add them to the blockchain.

You may have heard this from your favourite Web3 influencer, as bullish is a pretty common term in Web3. It’s used as an adjective to show enthusiasm or support.

A mechanism used to indefinitely remove tokens from the overall supply.

Understanding Cardano

Cardano is a decentralised blockchain platform that aims to provide a secure and scalable infrastructure for the development of dApps and the execution of smart contracts. Cardano also has an inclusive governance model to ensure a sustainable ecosystem.

Key Aspects of Cardano

1. Scalability: Cardano tackles the scalability challenge through a layered architecture that separates the blockchain's settlement layer from the computational layer. This enables more efficient transaction processing, reduces congestion, and enhances overall scalability.
2. Sustainability: Cardano's commitment to sustainability lies in its focus on energy efficiency and long-term viability. The platform utilises a proof-of-stake (PoS) consensus mechanism called Ouroboros, which significantly reduces energy consumption compared to proof-of-work (PoW) networks like Bitcoin.
3. Scientific Approach: Cardano distinguishes itself through its scientific approach, leveraging peer-reviewed research and academic collaborations. This ensures the platform's design and development are rooted in rigorous scientific principles, enhancing security, and fostering innovation.

Understanding Consensus Mechanisms

Consensus mechanisms are fundamental protocols used by blockchain networks to achieve agreement among participants on the validity and order of transactions.

These mechanisms play a vital role in establishing trust, preventing double-spending, and maintaining the decentralised nature of blockchain networks.

Boiled down they are cryptographically secured digital representations of value or contractual rights.

These then use a form of distributed ledger technology and can be transferred, stored or traded electronically.

In the crypto world, the term "degen" is short for "degenerate."

While the word might sound a bit edgy, it's used to describe individuals who embrace risky or unconventional behaviour in their cryptocurrency investments or activities, it can also be used a term to describe those early to crypto and blockchain.

Being a degen is often associated with participating in DeFi projects, trading volatile assets, or taking high-risk investment approaches.

Understanding Ethereum

Ethereum is an open-source blockchain platform introduced in 2015 by Vitalik Buterin. Unlike Bitcoin, which primarily focuses on peer-to-peer digital currency, Ethereum serves as a decentralised platform that enables the execution of smart contracts and the development of dApps.

Key Aspects of Ethereum

1. Smart Contracts: Ethereum introduced the concept of smart contracts, which are self-executing agreements written in code. These contracts automatically execute predefined conditions without the need for intermediaries, enhancing transparency, efficiency, and trust in various industries.
2. dApps: Ethereum provides a platform for developers to create and deploy decentralised applications. These dApps leverage the blockchain's immutability and transparency to offer innovative solutions across industries such as finance, supply chain, gaming, and more.

FUD is simply an acronym for Fear, Uncertainty and Doubt. It is used commonly to describe negative rumours.

The floor price or floor is a term used to describe the lowest possible trading price of an NFT on secondary marketplaces.

Essentially it is a term for the cheapest NFT to buy in a collection.

These are the fees paid to miners for completing a requested transaction, they can vary depending on demand.

Gas fees can be thought of like tips for the people/computers who maintain the integrity of a blockchain network also known as Validators.

Understanding Layer 1 Blockchains

Layer 1 blockchains serve as the bedrock of the blockchain landscape, providing the fundamental infrastructure for dApps, smart contracts, and digital assets. They are the first layer in the blockchain stack and play a crucial role in a blockchain network.

Key Characteristics of Layer 1 Blockchains

Layer 1 blockchains prioritise decentralisation, distributing control and decision-making power across a network of nodes. This ensures a trustless environment where no single entity holds ultimate authority.

Security is a big focus for Layer 1 blockchains and through decentralised consensus mechanisms and cryptographic protocols they are made highly resistant to hacking, fraud, and censorship. This ensures the integrity and immutability of the data stored on the blockchain.

Examples

Ethereum, Bitcoin, Cardano, Solana

Understanding Layer 2 Blockchains

Layer 2 solutions are protocols built on top of existing Layer 1 blockchains to address the scalability limitations of the underlying networks. They aim to enhance transaction throughput, reduce fees, and improve user experience without compromising the security and decentralisation offered by Layer 1 blockchains.

Key Characteristics of Layer 2 Blockchains

Layer 2 blockchains hold immense importance in the blockchain ecosystem, they overcome the scalability challenges faced by Layer 1 blockchains, enabling faster and more cost-effective transactions.

Which is vital for the mainstream adoption of blockchain technology, as it allows networks to handle a significantly higher number of transactions per second.

Examples

Polygon, Arbitrum, Optimism, Starknet

This is the process of validating transactions and processing them to make sure that they are legitimate and can therefore be publicly broadcast.

Think your ready to get your hands on your first NFT? If so, have a quick read about what Minting an NFT means.

What Does Minting An NFT Mean?

When minting NFT’s what you are doing in technical terms is converting metadata and code into a digital asset by recording it on the blockchain, which creates unique asset that cannot be changed. In less technical terms its essentially broadcasting to the world (in this case the blockchain) that you are the owner of that digital asset.

Understanding Polygon (MATIC)

Polygon is a proof of stake (PoS) Layer 2 scaling solution for the Ethereum blockchain, designed to address its scalability limitations and high transaction fees. It aims to enhance Ethereum performance, enabling faster and more cost-effective transactions while maintaining interoperability with Ethereum's ecosystem.

Key Aspects of Polygon

1. Scalability: Polygon achieves scalability by employing various Layer 2 solutions, such as sidechains, to process transactions off the Ethereum main chain. This reduces congestion and allows for a higher throughput of transactions, making it ideal for dApps and DeFi protocols.
2. Security: Polygon leverages Ethereum's security through its reliance on the Ethereum main chain for finality and consensus. By building on top of Ethereum, Polygon benefits from the robust security measures established by the Ethereum network.
3. Interoperability: Polygon maintains strong interoperability with Ethereum, enabling seamless movement of assets and data between the two networks. Developers can port their existing Ethereum-based applications to Polygon with ease, benefiting from its scalability while retaining compatibility with Ethereum's ecosystem.

Understanding Proof of Authority (PoA)

Proof of Authority is a consensus mechanism that relies on a set of pre-approved Validators known as authorities. These authorities are trusted entities responsible for validating transactions and producing new blocks.

Unlike Proof of Work (PoW) or Proof of Stake (PoS), where Validators are chosen based on computational power or token holdings, PoA ensures consensus through trusted identities.

Understanding Proof of Capacity (PoC)

Proof of Capacity is a consensus mechanism where participants demonstrate their commitment to the network by allocating storage space on their devices rather than computational power or token holdings.

Participants pre-compute plots, which serve as a representation of their storage capacity, and use them to compete for mining rights and validate transactions.

Understanding Proof of Elapsed Time (PoET)

Proof of Elapsed Time is a consensus mechanism that aims to distribute block creation rights in a fair and decentralised manner.

It utilises a random wait time based on real-world time intervals to select a leader who is granted the privilege to create the next block and validate transactions.

Understanding Proof of Stake (PoS)

Proof of Stake is a consensus mechanism used by blockchain networks to achieve agreement on the validity and order of transactions.

Unlike Proof of Work (PoW), which relies on computational power, PoS selects Validators to create new blocks based on the number of tokens they hold and ‘stake’ in the network.

Validators are chosen in a deterministic manner, reducing energy consumption and increasing scalability compared to PoW.

Understanding Proof of Work (PoW)

Proof of Work is a consensus mechanism that requires participants, known as miners, to solve complex mathematical puzzles to validate transactions and create new blocks.

This computationally intensive process secures the blockchain network by ensuring that miners invest significant computational resources, making it difficult for malicious actors to manipulate the network.

A Rug Pull/Rug is a term used to describe a scam. Think of the phrase, having the rug pulled out underneath you.

Understanding Solana

Solana is a high-performance blockchain platform designed to provide fast, scalable, and cost-effective solutions for dApps and cryptocurrencies, it is ideal for builders and users with minimal gas fees on the network.

Key Aspects of Solana

1. Scalability: Solana's architecture is designed to process a vast number of transactions per second (TPS), making it one of the fastest blockchain networks available. By utilising a combination of proof of history (PoH) and proof of stake (PoS) consensus mechanisms, Solana enables rapid transactions.
2. Security: Solana prioritises security by utilising a PoS consensus mechanism, where Validators hold and stake SOL tokens to secure the network. Additionally, the integration of cryptographic algorithms and robust consensus protocols ensures the integrity and immutability of transactions on the Solana blockchain.
3. Ecosystem and Interoperability: Solana promotes interoperability by supporting a wide range of decentralised applications and tokens. It provides developers with a flexible environment to build and deploy dApps, enabling seamless integration with other blockchain networks and projects.

Stablecoins are a unique category of cryptocurrencies designed to minimise price volatility.

Unlike other cryptocurrencies, which experience significant price fluctuations, stablecoins aim to maintain a stable value.

They achieve this by pegging their value to an external asset, such as a fiat currency like the U.S. dollar or a commodity like gold.

Placing assets in escrow for a period of time to aid the operation of the protocol being used and in return receiving compensation.

Tokenomics or token economy is a quite often misunderstood, in the simplest terms tokenomics refers to the supply, strategy and management of a particular token.

It essentially covers how and why a token will implement and use certain mechanisms.