Web 3.0 Terms and Their Definitions in Plain English
4 min read
You've probably heard about Web3 unless you've been living under a rock. Web 3.0 is the next step in the web's growth, and it aims to make the internet more intelligent. In this article, we are going to learn some commonly used Web 3.0 terms and their definition.
Cryptocurrency, or crypto, is a type of digital currency that can be used as a medium of exchange. It employs encryption to safeguard and authenticate transactions, as well as to regulate the generation of new digital currency units.
When you hear about Web3, you'll notice that cryptocurrencies are frequently referenced. Because many of these systems involve cryptocurrency, anyone who wants to help build, manage, or improve one of the projects will receive a monetary reward (tokens).
There are nearly over 6,000 cryptocurrencies at the time of writing this article (Nov. 2021)
A crypto token is a virtual money. It is a tradable asset or utility that exists on its own blockchain and can be used for investment. Tokens are typically used to describe all crypto assets.
A smart contract is a decentralized program that responds to events by executing business logic. The exchange of money, delivery of services, unlocking of information controlled by digital rights management, and other forms of data manipulation, such as altering the name on a property title, are all possible outcomes of smart contract execution. Smart contracts are often written in Solidity.
Mining is the process of adding transactions to the blockchain, which is a vast distributed public database of existing transactions. Mining is usually done on a separate computer because it necessitates a fast CPU, as well as more electricity and heat generation than normal computer operations.
Solidity is an object-oriented, high-level programming language for creating smart contracts on the blockchain that automate transactions.
If you are new to Solidity, I have written a beginner's guide about it.
Ethereum Virtual Machine
The Ethereum Virtual Machine (EVM) is the Ethereum smart contract runtime environment. The Ethereum Virtual Machine is focused on providing security and allowing machines all around the world to execute programs.
Solana is an open-source project that implements a new permissionless, high-performance blockchain. Solana has its own native token called SOL. It can be passed to nodes in a Solana cluster in exchange for running an on-chain program or validating its output.
ICOs - Initial Coin Offering
Initial Coin Offerings (ICOs) are a popular financing tool for firms that want to sell products and services in the cryptocurrency and blockchain arena.
The transaction costs that users pay to miners on a blockchain protocol to get their transaction included in the block are referred to as "gas fees."
A crypto wallet is a program or software that allows users to engage and interact with blockchain networks directly. Some popular are Coinbase, Exodus, and BlockFi.
Cryptocurrency wallets can be software or hardware-based.
Etherscan is a program that allows you to see information about any Ethereum blockchain transactions that are either pending or confirmed. Because Ethereum is a public, open blockchain, every interaction with it is documented in the transaction history, which is visible to anybody.
DApp - Decentralized application
A decentralized app (dApp) is a digital application or a program that resides and executes on a blockchain or peer-to-peer network of computers rather than a single computer and is independent of anyone's authority's control.
NFT - Non-fungible token
NFTs (non-fungible tokens) are blockchain-based tokens that each represent a unique asset such as a work of art, digital property, or media. It can be anything from music to a website domain.
You can also create your own NFT collections. Eda has written an awesome guide about it.
A consensus mechanism is any of the methods for achieving agreement, trust, and security across a decentralized computer network.
A consensus algorithm is a method through which all peers in a Blockchain network come to an agreement on the current state of the distributed ledger.
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