Gear Up For Web3 With These Terminologies
Tags: web3, blockchain, beginners
Published: 2022-08-09 07:16:15

Web3 is probably the most happening word in the technology sector, and it has an 'N' number of buzz words. But, unfortunately, a beginner can quickly get confused with all the terminologies around it. 

So in this article, I have explained the ten most popular terminologies for web3 beginners like you. This is the second article of the 'Busting Web3' series. If you haven't read the first article, get it here - An Overview of Blockchain and Web3

#### Web3
Web3 is a decentralized web. It's a collection of protocols, standards, and applications built around the Ethereum blockchain.

Web3 allows decentralized applications (DApps) to be built on top of any arbitrary set of functionality - including identity management, messaging systems, and more.

#### Ethereum
Ethereum is an open-source, public, blockchain-based distributed computing platform.

The Ethereum blockchain is the base layer of the decentralized application ecosystem, that is, the Ethereum Virtual Machine (EVM). It supports smart contracts and distributed applications that run on top of its native token (intended to be used as a currency for paying for services or application fees) called ether which can be transferred between accounts and used to compensate miners who perform work on it.

#### Bitcoin
Bitcoin is a digital currency. Any government or central bank does not back it, and its supply is limited to 21 million bitcoins. The origin of bitcoin's name comes from the fact that it was developed by an anonymous developer known as Satoshi Nakamoto.

Bitcoin has been around since 2009, but it gained mainstream attention when the value of its market cap surpassed $1 billion in 2013 for the first time—and then again in 2017 when bitcoin reached its all-time high price of $20,000 per coin (and stayed there until January 2018). 

Though there are many different types of cryptocurrencies on today's market (including Ethereum), this one still reigns supreme because it has easier access than most others: anyone can buy some bitcoins directly through exchanges like Coinbase or Gemini; however, you do this depends on where exactly you live!

#### Solidity
Solidity is a contract-oriented programming language for writing smart contracts. It was designed to target the Ethereum Virtual Machine (EVM), which can be used to create decentralized applications on the Ethereum network. The Ethereum blockchain uses EVM to provide security, transparency, and immutability while executing code.

Solidity is a statically typed language with strong typing and high-level features like classes and inheritance. Moreover, it has support for multiple languages such as Javascript or Python via ANSI C++ extensions or direct CALLs, respectively.

#### Smart Contracts
A smart contract is a computer protocol that executes the terms of an agreement. The network verifies the validity of all transactions, including those on the blockchain and in other blockchains.

Smart contracts are often written in Solidity but can also be implemented using other programming languages like Serpent and LLL (which were used by Ethereum's first implementation). To understand how they work and why they are helpful, it's essential first to know what they are not:

They're not simply pieces of code written by developers; instead, they've generated automatically through a process called "smart contract compilation." This means there will never be any human involvement involved in creating them—they'll always be 100% secure because no one knows how you wrote them until after execution has taken place!

#### DeFi (Decentralized Finance)
DeFi is a term that refers to an open-source protocol for decentralized finance. It's the technology that powers the Ethereum blockchain, but it's not limited to just Ethereum; any blockchain can implement this protocol.

DeFi is not about digital assets or securities — it's about how someone pays another person or organization for something with no intermediary involved (such as money). In other words: "Decentralized Finance" means there isn't any central authority mediating between two parties when they exchange value (money) in return for goods or services from each other.

The most common use case of DeFi is trading cryptocurrencies between two individuals over smart contracts on an immutable ledger known as the Ethereum blockchain. This allows users who want to transact quickly and easily without having their funds held hostage by banks or other financial institutions because they're using encrypted transactions instead of traditional fiat currencies like USD/EURO etc.

#### ERC-20 Token Standard
Ethereum token standard, or ERC-20 for short, is a set of rules that define how to build smart contracts on the Ethereum blockchain. The most popular use cases for ERC-20 tokens are:

A digital asset (e.g., Bitcoin) that can be transferred from one person to another

An access key for a specific service (e.g., Dropbox)

#### NFTs
NFTs are a special type of token that can be used to represent unique digital assets. These tokens are non-fungible and non-interchangeable. NFTs are often associated with blockchain technology, but they don't necessarily need to be part of a blockchain network. For example, an NFT could be used as a currency in a game or game item that is not stored on any blockchain database but rather represented by an algorithm running on your computer (or even within other software).

#### Decentralized Autonomous Organization (DAO)
DAOs are organizations run through rules encoded as computer programs called smart contracts. These organizations are autonomous, decentralized organizations run by a computer program called a smart contract. In this model, no one person or group controls the system—the code is open source and can be examined by anyone who wants to look at them and make changes if needed by making changes to the code itself.

#### Crypto Wallet
A cryptocurrency wallet is an app that allows cryptocurrency users to store and retrieve their digital assets. As with conventional currency, you don't need a wallet to spend your cash, but it certainly helps to keep it all in one place. Think of it like a Demat account from which you buy and sell stocks and mutual funds.

#### Gas Fees
Gas fees are the transaction fees paid to miners on a blockchain network to get a user's transaction included in the block. Interestingly, gas fees are not of fixed value, but they keep fluctuating with time for various reasons.

## Final Words
Those mentioned above were the most popular web3 terminologies. If you wish to know more, you can read this article by Unstoppable Domains.

Now, the third article in this series will be a detailed blog on Ethereum. Till then, stay tuned and share it with your friends.