18 BestWeb3.0-related terms
Eighteen web 3.0-related terms matter:
- Blockchain:
As the term suggests, “Chain of Blocks.”
Blockchain is a decentralized database that contains data maintained across a peer-to-peer network of computers.
2. Crypto:
Crypto/Cryptocurrency is a digital currency that is not controlled by any central authority (bank).
Crypto operators on distributed public ledgers, which are nothing but blockchains.
3. Public Ledger:
Public ledger stores all the transactions over a network by storing anonymous information of participants.
4. Centralized:
An entity (individual or organization) controls the entire system and decision-making.
5. Decentralized:
Decentralized in terms of blockchain, controls and decision making is handled by a distributed peer-to-peer network.
6. Coin:
A cryptocurrency built on top of its own native blockchain. They are native assets.
For example: ETH and BTC
7. Token:
A token can be considered a digital asset created on top of an existing blockchain. They are generally used to interact with dApps.
8. NFT:
Stands for Non-Fungible Token.
A digital certificate of authenticity is used to assign and verify ownership of unique assets (pieces of art, digital content, or media) you own.
It has unique identification codes and metadata.
9. Protocol:
In general, protocols are the set of rules that a particular computer or application follows.
In web3, it has become a general term used to refer to both L1 and L2. Protocols are fundamentals of different blockchains.
10. L1:
L1 or Layer 1 chain is the main blockchain itself.
For example, Ethereum and Bitcoin are L1 chains.
11. L2:
A protocol or solution built on top of some other existing L1 blockchains.
12. Ethereum:
Ethereum is nothing but a decentralized blockchain written in Solidity programming language.
Ether coin is the native crypto of Ethereum.
13. Consensus:
In general, Consensus is a state of agreement. In web3, the state of agreement among nodes.
Achieving Consensus is necessary to add new blocks and transactions to a particular blockchain.
14. DAO:
Stands for Decentralized Autonomous Organization.
DAO typically has specific goals and ideas controlled by the members and not determined by the central entity.
15. Mainnet:
Mainnet (Main Network) generally refers to a fully operational blockchain where transactions (coins/tokens) possess real value.
16. Testnet:
Testnet (Test Network) is generally set up to test things in which tokens/coins do not have any value attached to them.
17. PoS- Proof of Stake:
PoS is a consensus mechanism that requires nodes, called validators, to stake a set amount of cryptocurrency on the blockchain to verify
18. PoW- Proof of Work:
PoW is a consensus mechanism that requires miners to complete complex mathematical puzzles in order to verify transactions and mint blocks.