Ethereum Glossary
Essential blockchain and Ethereum terms explained in simple language
Blockchain
A shared, tamper-proof digital notebook that thousands of computers around the world keep identical copies of, ensuring no single entity can change or control the records.
Cryptocurrency
Digital money that works without banks, using mathematics and computer networks to verify transactions and transfer value instantly across the world.
DAO (Decentralized Autonomous Organization)
A company where decisions are made by token holder voting rather than executives, and rules are enforced by computer code rather than human management.
DeFi (Decentralized Finance)
Financial services like lending, borrowing, and trading built using smart contracts, allowing people to access banking services without traditional banks.
Ether (ETH)
Ethereum's native cryptocurrency that serves as 'fuel' for the network, required to pay transaction fees and interact with applications built on Ethereum.
Ethereum
A programmable blockchain platform that works like a 'world computer,' allowing developers to build decentralized applications that inherit blockchain's security and transparency.
Gas / Gas Fees
The fee paid in Ether to use the Ethereum network, compensating the thousands of computers that process transactions and maintain the blockchain.
Layer 2
Additional blockchain layers built on top of Ethereum that process transactions faster and cheaper while inheriting Ethereum's security guarantees.
NFT (Non-Fungible Token)
A digital certificate of ownership for unique items like digital art, allowing creators to prove authenticity and buyers to verify they own an original digital creation.
Private Key
Like the master key to your cryptocurrency wallet - a secret code that proves you own your digital assets and allows you to spend or transfer them.
Proof of Stake
An energy-efficient method for securing blockchain networks where validators are chosen to create new blocks based on how much cryptocurrency they stake (lock up) as collateral.
Proof of Work
An energy-intensive method for securing blockchain networks where computers compete to solve complex math problems, with the winner getting to create the next block.
Public Key
Like your wallet's address - a code you can safely share with others so they can send you cryptocurrency, while keeping your private key secret.
Smart Contract
A computer program that automatically executes agreements when conditions are met, like a vending machine that gives you a product when you insert correct payment.
Wallet
Software that stores your cryptocurrency keys and lets you send, receive, and manage your digital assets. Can be custodial (company controls keys) or non-custodial (you control keys).
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