Do the terms ‘proof-of-stake,’ litecoin’ and ‘mining’ mean anything to you? If not, keep reading.
With all the buzz lately around blockchain technology, it can be tough to keep up. Given how fast this industry is growing, new terms are being introduced on a regular basis, and if you have wanted to learn more about crypto, the blockchain and what it means to “HODL,” then here is a short list of essential vocabulary to digest.
If you’re going to talk about blockchain, you have to know what the blockchain is first. Blockgeeks explain that blockchain is a distributed ledger of digital information. Created by an unknown individual named Satoshi Nakamoto (probably a pseudonym), the original use-case for blockchain was the digital currency Bitcoin. A significant benefit of blockchain is that the technology is transparent and incorruptible because the network exists through decentralized consensus. It’s helpful to think of blockchain technology as a giant spreadsheet to which everyone can contribute.
Cointelegraph defines blockchain as a digital or virtual currency designed to be a medium of exchange. It uses cryptography to secure and verify transactions and create new units of a cryptocurrency. Built upon their own blockchains, cryptocurrencies vary in how they process transactions, number of coins available and overall structure.
Bitcoin creator “Satoshi Nakamoto” remains an unknown figure to this day. But his (her?) Bitcoin is the first peer-to-peer currency for online transactions.
Litecoin was created to be a direct competitor of Bitcoin. According to PCMag, Litecoin was designed to handle transactions more quickly than Bitcoin.It can take a significant amount of time for blockchain to process transactions, whereas a Visa or Mastercard can process thousands of exchanges in a second.
Like Bitcoin and Litecoin, Ethereum is considered a significant cryptocurrency. Bankrate describes Ethereum as a “world computer”; this is because Ethereum is a foundational blockchain system that other blockchain developers can use to build new cryptocurrencies. The process of using existing blockchain technology and building on top of it is similar to how mobile developers build apps on the App Store platform.
In the blockchain world, these technologies built on top of foundational blockchain systems are known as dApps.
dApps, or decentralized apps, are applications built upon an existing blockchain. Like applications in the App Store, these apply to a wide variety of uses, from health care to asset management. Numerous entrepreneurs have found different use cases for blockchain and crypto, so dApps have become widely used for blockchain development projects.