Blockchain Basics - for Creators

Iterative Glossary for Creators

This is an iterative article, that is, I’ll keep adding or removing content constantly based on questions or suggestions from community members and specially OSS developers and creators. If you have a suggestion, to change the glossary, add a new article or video for a subject, feel free to comment or message me. Ideally it should change every day, I’ll keep updating it.

The blockchain technology and the cryptocurrency universe are unique, the space is minimally restricted or constrained by regulation, it is a trust-minimized environment where individuals are free to create, to transact between themselves. Different from anything else ever seen in human history, the costs of creating something new, without requiring validation from third parties, are low. The fierce competition between creators in a totally free decentralized market maximizes innovation as projects always need to be active to stay relevant, since everything is changing extremely fast and new projects, concepts, competition are born every day.

This is the most fertile space for creators, they are free to create anything, just limited by their own creativity. The environment that maximizes the freedom to create and innovate, is ideal for Creators to grow and correctly rewarded for the impact they cause in the world.

What is Blockchain

The Bitcoin whitepaper published in November 2008, introduced revolutionary concepts, such as a purely peer-to-peer digital currency that doesn’t need a trusted third party, financial institution or central issuer. The main technology behind it is the proof-of-work blockchain, a public digital and immutable ledger, shared by all nodes of that system. For the first time, in an open, decentralized network, participants didn’t need to know and trust each other to verify electronic transactions, which are made through cryptographic algorithms that can be correctly verified and corrected even if attacked by malicious nodes.

Since then, innumerous blockchains were built, Ethereum, Cardano, Polkadot and now Binance Chain are some examples of the biggest blockchains projects at the moment.

Ethereum still is the blockchain with most prestige, and where significant innovation occurs. With over active 2,300 developers , trends like cryptokitties, DeFi, NFTs, DAOs.

Smart Contracts

Is program stored on a blockchain - Ethereum for example- that is automatically executed every time some sort of event specified on that contract triggers it. The main benefit of using Smart Contracts is that you don’t need a third party to execute it or human intervention, all the terms of the contract are on the code itself.

Ethereum

Ethereum is a community-ran, open source, technology or computing infrastructure, that let’s you execute smart contracts, send cryptocurrencies to anyone by paying a small fee called gas.

Since Ethereum is programmable, you can use it for way more than just use it as money or for payments.

Gas

Gas is the fee that is required to run computational resources to successfully execute a transaction on Ethereum.

Wallets

Wallet is where you store the keys and the dapp that allows you to access your crypto currencies. When you ‘hold’ cryptocurrencies in your wallet, you are the only person who has sovereignty over it, as long as you have your private keys.

Centralized Exchange (CEX)

A Centralized Exchange is, just like a common broker, a trusted middle man or third party that sells the service of having the custody of assets of individuals and creates the market - exchange- where these individuals can trade between themselves through orderbooks.

Decentralized Exchanges (DEXs)

Differently from CEX, DEXs are exchanges that connect users directly, there is no middle man. Users have control, sovereignty over their own tokens, and can connect their wallets to the exchange dapp to trade between themselves usually through pools instead of orderbook.

Liquidity Pool

A liquidity pool can be described as a pool or pile of tokens that are locked in a smart contract, it is used to allow individuals to trade the tokens inside that pool against each other. Liquidity Providers usually have to deposit another token with the same value to form the trading pair, usually ETH. For example, 50% DEV and 50% ETH is deposited into a pool to form the DEV/ETH trading pair.

NFT

Non-fungible Tokens are tokens that have unique characteristics or properties. Things like visual art, music, collectible items, games, are rapidly being tokenized into NFT since it is a way to represent and verify the ownership of those items.

Fungible Tokens

Fungibility is an economic term that describes a good or a commodity that are mutually interchangeable with an identical item. So, Fungible Tokens are tokens that don’t hold any uniqueness intrinsic to them, individually, and can’t be distinguished from another one of it’s kind. Some examples of Fungible currencies or tokens are: bank notes from a specific country with the same denomination; an ERC-20 token, they have the exact the same type and have the same value.

Governance Tokens

Governance Token holders can vote directly on proposals that decides the future of the Protocol or platform. Through governance tokens, every holder had their say and the right to vote on changes, proposals and decisions of that DAO.

DAO

Decentralized Autonomous Organization - DAO - is an organization or internet-based business run by rules created by their members through consensus, everything coded into smart contracts. Access to the treasury, proposals and decisions are all voted, usually by the governance token holders.

Keep Asking Questions!

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As I’ve said, please share your ideas here, ask questions or any suggestions. I’ll keep updating this article!

It’s like Wikipedia.
I think it’s very good.

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You found smart use of the forum!
Thank you for sharing your knowledge :books:

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Guys, remember to ask questions, I’m always updating this article with all the questions I get.

Well, there’s a topic here that is easy to understand but other topics really hard to understand, like I need to read and watch the videos again. But overall, it was great content! I learn a lot here. I will get back here again when I forgot some things. Thank you for this!

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Awesome thanks for your feedback, could you point out which one you found difficult to understand?

Do you have any questions after watching those?

This article is supposed to be constantly changing so your feedback is more than welcomed.

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It’s quite good for me actually.

  • But can I ask what is cryptokitties?
  • I think the description of DeFi is missing in this topic?
  • I see there’s a lot of ERC (with number) can you explain that to me? ^^

Thank you!

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