Blockchain:
This is a technology that allows for the creation of a digital ledger of transactions that is distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. This decentralized database managed by multiple participants is known as Distributed Ledger Technology (DLT).
Decentralization:
This refers to the transfer of control and decision-making from a centralized entity (individual, organization, or group thereof) to a distributed network. In the context of blockchain, decentralization means the network operates on a user-to-user (or peer-to-peer) basis rather than being controlled by a single central authority.
Cryptocurrency:
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.
Bitcoin:
Bitcoin is the first decentralized cryptocurrency, introduced in 2009 by an individual or group of people under the pseudonym Satoshi Nakamoto. It is a digital currency that doesn’t rely on a central authority for bookkeeping but instead is an open-source, peer-to-peer network.
Ethereum:
Ethereum is a decentralized, open-source blockchain system that features smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. Amongst cryptocurrencies, Ether is second only to Bitcoin in market capitalization. Ethereum allows developers to build and deploy decentralized applications, and it’s often used as a platform for ICOs (initial coin offerings).
Smart Contracts:
These are self-executing contracts with the terms of the agreement directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.
DeFi (Decentralized Finance):
DeFi is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. The system removes the control banks and institutions have on money, financial products, and financial services.
NFTs (Non-Fungible Tokens):
NFTs are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can serve as a medium for commercial transactions.
Mining:
Mining is the process by which new cryptocurrency coins are entered into circulation, but it is also a critical component of the maintenance and development of the blockchain ledger. It is performed using very sophisticated computers that solve extremely complex computational math problems.