Altcoins
An altcoin is a digital currency that exists alongside Bitcoin. The word altcoin is a portmanteau of ‘alternative’ and ‘coin’, to form ‘altcoin’. It actually refers to a wide array of crypto; essentially all crypto other than Bitcoin.
Decentralized Apps (dApps)
You’ve probably heard of dApps. These are open-source blockchain applications designed for real-world use. Ethereum is regarded as the ‘mother’ of dApps. Ethereum was created with the intention of allowing developers to build new applications on top of its blockchain.
There is no universal definition of dApps. However, all dApps share a few characteristics: they are open-source, decentralized, incentivized (validators must be rewarded with cryptographic tokens), and follow a protocol (the community agrees on a cryptographic algorithm that can be widely adopted).
Some ETH-based dApps are now worth millions of dollars in market capitalization, and a dApp can theoretically become as valuable as any other company or product.
Decentralized Finance (DeFi)
Decentralized alternatives to traditional (centralized) finance are referred to as DeFi. Banking, money management, payment processing, insurance, and other financial services are all part of DeFi. DeFi products and services open up previously closed doors, to what had been a closed-off industry.
If you pay attention, you’ll notice this term being thrown around everywhere in the web3 space, so it’s important to be aware of what it stands for.
Digital Currency
Fiat money and digital money can both be linked. In fact, the majority of large countries, like the US and China, currently have a digital currency connected to their fiat.
A transaction with a digital currency requires trust because it involves several institutions. On the other hand, with crypto you can instantly verify the records of the address you are interacting with, as well as the transactions themselves.
To put it another way, when you want to sell a pair of shoes on StockX, you are unable to view the transaction history of your counterparty and third party payment processor. You have faith that PayPal (and your bank) will complete that transaction in a secure manner.
Public Ledger
Each blockchain has a unique ledger. Here’s a link to the public ledger of Bitcoin. Given that it is public, this is the location where you can view every transaction ever made on a blockchain. Some coins set themselves apart by using an anonymous or private ledger.
Distributed Ledger Technology (DLT)
We briefly discussed public ledgers, which are the places where you can view all blockchain transactions. DLT stands for distributed ledger technology, which is another name for blockchain technology. Consider blockchain when you hear the term DLT. Keep that in mind.
Fiat
Fiat currency is, first and foremost, government-backed, and it is not backed by any commodity (like gold). What about those green US dollars in your wallet? That is fiat money. The value of US dollars is solely determined by our collective faith in the institution of the US government. If the US collapses, so will your fiat.
Gas
When you conduct a blockchain transaction, you must pay a fee. This fee is known as a gas price. You are essentially paying a miner to go out and collect cryptocurrency for you. You can choose to pay higher transaction fees for faster transaction speeds or lower transaction fees for slower transaction speeds.
Gas prices are one of the most significant challenges confronting cryptocurrency markets. If we can find a better way to reduce transaction energy costs, crypto adoption will likely become more widespread.
Smart Contracts
Smart contracts, a key feature of the Ethereum blockchain and NFTs, are simply boring legal contracts … they’re just written in computer code.
Smart contracts, like any other legal contract, hold multiple parties accountable for something, but they instruct each party through code rather than spoken language. Both parties can see and approve the programming before agreeing to the terms of a contract, making it completely transparent.
Whale
The most valuable Bitcoin addresses are referred to as whales. According to bitinfocharts, there are approximately 2000 Bitcoin whale addresses, with only 4 holding more than 100,000 BTC.
