Learn about cryptocurrencies blockchain NFT and Metaverse. Blockchain technology is spreading like wildfire, the latest frontier being video games. Let’s discover the most common terms.
The golden year of NFT has just ended, opening the doors to the era of Metaverse, all under the aegis of blockchain technology.
It all stems from the ideal of decentralized finance: an idea put into practice by the figure of Satoshi Nakamoto, to this day still shrouded in mystery. The birth of Bitcoin takes place on January 3, 2009 at 18.18, the exact time when the genesis of the first blockchain was inaugurated. Since then, the rise of the first digital currency has been unstoppable, albeit punctuated by skepticism and enthusiasm. To find out all about its origins, we suggest checking out our special feature on the history of Bitcoin.
As thousands of people every day are drawn to the mysteries and wonders of the blockchain, it becomes increasingly important to discover the technical terms and fundamental concepts of this technology.
Glossary of Web 3.0 Technical terms (In Alphabetical Order)
Altcoin:
If Bitcoin is the first digital currency, alternative cryptocurrencies are the result of a natural process of technology expansion. Today, there are thousands of such cryptocurrencies and many more are being created daily. Each one purports to be a faster, safer, or more secure alternative to Bitcoin, but not all of them really deliver on their promises. Many rely on existing blockchains, others are created on purpose, such as the Binance Smart Chain or the Ethereum ecosystem.
Blockchain:
it’s like an infinite archive full of folders, where each folder represents a block full of recorded and validated information, which cannot be changed or deleted in any way. It is called a chain, blockchain, precisely, because each individual block is connected to the previous and the next with a cryptographic key.
Bridges:
or blockchain bridges, allow the transfer of information between one chain and another. We have already talked about the presence of multiple blockchains and until recently the world of cryptocurrency proceeded in this direction without posing the problem. The advent of new technologies and the exponential increase of traffic on the main blockchains have made it increasingly necessary to give the feature of interoperability to the chains, i.e. the ability to move, for example, an application from Ethereum to another system, faster and less congested, to the benefit of both platforms.
Cryptocurrency:
virtual currencies are so called for this very reason. Not only the blocks are linked together in this way, but also every single operation recorded on the block (for example a payment on the internet) is protected with cryptographic keys, as well as the addresses of the payer and the receiver.
DAO:
that of Decentralized Autonomous Organization is an extremely fascinating concept, which is perfectly related to what happens in the world of play-to-earn games and some metaverse. A project on blockchain is defined, or becomes, a DAO the moment its network becomes completely self-managed and self-sustainable. This means that there will no longer be any offices that can perform executive powers within it, devolving the entire decision-making process to the token holders of that specific blockchain.
dAPP:
these are real decentralized applications that rely on the blockchain and, in particular, on smart contracts. A common use of them is precisely to connect the seller of a service or nft with buyers in a simple and intuitive way.
DeFi:
is the abbreviation for decentralized finance, the concept around which the whole economic system of the blockchain revolves.
ERC20:
is a standard used on the Ethereum network that introduces a set of rules for issuing tokens based on a Smart Contract.
GAS:
we often hear about gas fees when talking about the crypto space. Just like cars need gas, huge mining rigs need to pay the bill and make a profit from the work. Transactions made on blockchain are therefore subject to specific and precise fees to reward miners, without which transactions could not go through.
Hashrate:
is the mining capacity of a given hardware. The more hashes per second, the greater the gains from its use. Video cards are mainly used in the Ethereum network, where performance is still evaluated in Megahash per second. For Bitcoin, things are different. It is much more complex to mine on the mother of blockchains and you need specific machines, ASICs, with computational capacities of several Terahash per second. Just think that an RTX 3090 has performance that ranges between 100 and 150 Megahash on Ethereum, while the most common ASICs for Bitcoin have performance in the range of 80-90 Terahash. While these numbers are not directly comparable, they probably still give the idea.
HODLER:
This is part of the slang used in the crypto world to refer to someone who buys currency to hold it for the long term. This word comes from a misspelling of “HOLD” made by a self-styled drunk user on the Bitcointalk forum in a 2013 thread, commenting on the enormous volatility of bitcoin. A hodler simply ignores market fluctuations, even in the face of large losses. His goal is to look forward to tomorrow without risking his capital on wrong moves.
ICO:
or Initial Coin Offering, is the process of launching a new currency on the market that is not yet available. Through the ICO, a developer can raise the funds to finance his crypto project and in return he will offer his backers a quantity of cryptocurrency at a fixed price once it lands on the market.
Market Cap:
this is one of the most important parameters to take into account when assessing the strength and confidence that the market has in a currency. It is also called market capitalization and its value is nothing more than the product between the number of coins issued and the number of a single token. The total decrees the market value of a given system. In the case of BTC, which is the coin with the highest Market Cap of all, you would have to multiply the current value (at the beginning of 2022 of 42000 dollars) by the almost 19 million coins circulating, for a total of over 800 billion dollars. Ether, with its approximately $3000 for an ETH in early 2022, has a Market Cap of $400 billion, half the value and not a tenth as one might mistakenly imagine.
Metaverse:
according to the most common and simple meaning of the term, it is a digital universe in which users can perform the most diverse activities, with or without virtual reality. If the philosophy of metaverse does not include blockchain as a propaedeutic feature, it is in practice thanks to NFT. Lately many games are extending to this concept and among the most illustrious examples we can name Decentraland and The Sandbox, where you can do really anything, buy and sell land or accessories. Every single element, in the Metaverse, corresponds to a token, i.e. a NFT.
Mining:
it is a fundamental practice the cryptocurrency economy, which allows these monetary systems to remain decentralized. Without a central body, i.e. a bank, someone will have to verify that the transactions in the blocks are authentic, otherwise anyone could attribute a million dollars to themselves simply by writing it on the blockchain. Well, the devices used for mining serve precisely to resolve the encryption of all transactions and verify that they are authentic. In turn, the miners are also subject to control, because otherwise they could make illegitimate transactions themselves. That’s why we talk about consensus mechanisms. There are many and each blockchain has its own, Bitcoin proceeds by absolute majority, marking as authentic a transaction verified by 51% of the active miners on the network.
NFT:
a direct result of smart contracts, non-fungible tokens are digital objects of any type, shape or size that can be registered through a contract that establishes ownership. Simply put, if we buy an NFT at auction, our ownership of that asset will be recorded on the blockchain in a certified, verified and provable way.
Play-to-earn:
ately we talk more and more about this model. The games that embrace this new philosophy are far from the current model, in which within the games you can buy aesthetic accessories and perks that improve our statistics and our chances of winning, but all with a simple concession of use. The play-to-earn games on the other hand, are based on the blockchain and everything we buy will be ours forever, certified as NFT and therefore also resalable and soon, hopefully, even interoperable between multiple metaverse. In many games, it is also possible to earn cryptocurrencies and NFTs just by playing. In this way, the player is given a key role within the system and no longer a paying spectator within a system that would still go on with or without him.
Smart contracts:
these are protocols, instructions and simple if/only programs that can be registered and executed on the blockchain. This, in fact, lends itself very well to record money exchange transactions, however, there are those who have thoughtfully used it to record different information as well. If the creation of the blockchain has the ultimate goal of removing intermediaries, i.e. banks, from the financial system, with smart contracts the goal is to remove legal representatives from the equation as well. Think of a notarized deed or a transfer of ownership. The smart contract is a program, a code, that can be registered on the blockchain and that can establish that upon payment of a predetermined amount, the recipient confers ownership of an asset to the payer.
Stablecoin:
unlike Bitcoin and Altcoin, these are market benchmarks that often replicate the value of real currencies such as dollars or euros. In this way they aim to eliminate or at least minimize the volatility of cryptocurrency value. One example of all is Tether (USDT), designed to maintain a value over time as close as possible to a dollar.
Wallet:
we often refer to this term as wallets. Just like in the real world, cryptocurrencies need to be accumulated in a specific place that defines their owner. For this reason, anyone can create their own crypto wallet and there are hundreds of completely free alternatives on the web, as well as physical wallets, such as USB sticks, where you can protect your value offline.
Whale:
in the market, there are those who take advantage of the moment to buy and sell according to fluctuations. These movements are dominated by the so-called whale, i.e. individuals or collectives with a large economic availability, such as to own a good slice of the currency in circulation and able, through purchase and liquidation, to decree the value through the law of supply and demand.
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