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- Bitcoin: The first cryptocurrency, it uses proof-of-work, requiring lots of computational power.
- Ethereum: One of the most popular cryptocurrencies, running on a proof-of-stake mechanism, and has a large market cap
- Tokens: Refers to one crypto of a type of cryptocurrency, and these tokens vary in price based on type of crypto (Eth, Bitcoin, ADA, etc.) and on the market.
- DeFi: Also known as Decentralized Finance, this type of finance does not require intermediaries, it typically makes use of smart contracts.
- Distributed Ledger: The Ledger holds data on all transactions on the blockchain, this ledger is public to everyone.
- Smart Contracts: Digital agreements that are executed based on predetermined rules and without intermediaries. Used on blockchains for carrying out certain types of transactions, staking, etc.
- Proof-of-Stake: Stakers stake their crypto as collateral, to have a chance to be chosen to create the next block, this chance increases with the amount staked.
- Proof-of-Authority: A select few are given the ability to create and validate new blocks.
- Proof-of-Work: Miners compete to solve cryptographic hash functions, difficult math puzzles/problems, to create new blocks to be added to the blockchain
- Layer 1’s / Mainnet: These are the main blockchain network, where transactions and all other applications are run.
- Layer 2’s: These are chains that are used to scale the network, moving the transactions from the mainnet to other chains that have the same security and protocols
- Bridges: A protocol that establishes a connection between two blockchains, enabling interactions between the two, like converting crypto from one type to another, or allowing resources for better smart contract development
- Sharding: Splitting the main blockchain network into a number of different shards each shard takes control of some smart contracts, transactions, and other applications to reduce stress on the main blockchain network.
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Basic Crypto Definitions (Part 1) was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
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