Blockchain Terminology: Understanding The Basics

October 11, 2021

Blockchain and related technologies are soaring in popularity among individuals and businesses. It’s tough to turn on a TV or computer and not see something related, such as soaring Bitcoin values or NFT artwork selling for millions of dollars. Less knowledgeable people might believe that, because this tech is so frequently discussed, everyone knows and understands what all these things are.

For some, it might even be embarrassing to admit that they don’t know any of this stuff. Of course, no one should feel this way, as blockchain and similar tech are not intuitive to understand. But having a general sense of the tech is a great way to stay in the loop, and begin to understand how it could change our future.

The following list is a compilation of frequently discussed blockchain terminology that everyone should become familiar with.

  • Blockchain-a decentralized, tamperproof,  peer-to-peer data storage approach that distributed information across computer networks.
  • Bitcoin-a digital, decentralized currency that utilizes Blockchain to enable secure peer-to-peer transactions. Bitcoin is one of many types of cryptocurrencies currently available.
  • Smart Contracts- Similar to physical contracts, online users can enact secure legal agreements between parties without the need for formal validation.
  • Non-Fungible Tokens(NFTs)- digital assets that can be owned or traded, such as artwork or collectable memorabilia, that is secured with blockchain.
  • DeFi- short for “decentralized finance”, any financial activity outside of the traditional banking system.
  • Crypto Wallets-platforms for storing various cryptocurrencies. There are two main types: hot and cold. Hot wallets store crypto currencies online, while cold wallets are stored in a physical device, adding an extra layer of protection against hacks.

Having a basic understanding of these common terms should make understanding the blockchain ecosystem much easier for those on the outside of the tech space. Because if current trends continue, the public will likely encounter these terms on a daily basis in the near future.

Edited by Maurice Nagle

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