The blockchain industry may seem profound, but many 'cool-sounding' terms can be understood immediately if you grasp their core meanings.
Today, we will introduce you to the core terms of the blockchain world in an easy-to-understand way, so you won't feel lost when chatting and may even show off a little.
📚 10 Core Terms Every Blockchain Beginner Must Know
1️⃣ Blockchain
One-sentence explanation: A 'distributed ledger' that everyone can view and no one can easily tamper with.
It divides data into blocks and links them in chronological order to form a chain.
Application scenarios: Bitcoin, Ethereum, supply chain traceability, digital identity, etc.
2️⃣ Decentralization
One-sentence explanation: A network structure without a 'unique leader'.
Traditional bank transfers go through banks, but in the blockchain world, transfers do not require a central institution; all network nodes validate transactions together, decentralizing power and risk.
3️⃣ Consensus Mechanism
One-sentence explanation: The rules that ensure everyone agrees on the contents of the ledger.
Common types:
• PoW (Proof of Work): Competing based on computing power (used by Bitcoin)
• PoS (Proof of Stake): Determines accounting rights based on the amount and duration of holdings.
• DPoS (Delegated Proof of Stake): Elect representatives to help keep records
4️⃣ Smart Contract
One-sentence explanation: A 'code contract' that executes itself.
For example, set 'if condition A is met, then automatically execute B', with no human intervention required throughout, and it cannot be easily changed.
Applications: DeFi protocols, NFT trading, DAO governance, etc.
5️⃣ Token
One-sentence explanation: Digital assets on the blockchain, which can represent currency, rights, items, etc.
• Native Token: Issued by the blockchain itself (e.g., BTC, ETH)
• Contract Token: Issued based on a specific chain (e.g., USDT, UNI)
6️⃣ Wallet
One-sentence explanation: Your 'digital pocket' in the blockchain world.
Divided into:
• Hot Wallet (online, convenient but relatively high risk, like MetaMask)
• Cold Wallet (offline storage, secure but less convenient, like Ledger)
7️⃣ Private Key & Public Key
One-sentence explanation:
• Public Key: Your 'bank card number', used by others to transfer money to you.
• Private Key: Your 'password + USB shield', must be kept safe; losing it means losing control over your assets.
8️⃣ NFT (Non-Fungible Token)
One-sentence explanation: Unique and irreplaceable digital credentials.
Can be used for artworks, game items, tickets, digital identities, etc.
Highlights: On-chain proof, public and transparent, strong anti-counterfeiting capabilities.
9️⃣ DeFi (Decentralized Finance)
One-sentence explanation: Decentralized financial services.
Allows you to complete operations like lending, trading, and wealth management without a bank, executed entirely by smart contracts.
🔟 DAO (Decentralized Autonomous Organization)
One-sentence explanation: A 'decentralized organization' running on blockchain and smart contracts.
Members vote to decide the project's direction, and the rules are written into the chain's code, ensuring transparency.
📌 Summary
Mastering these terms gives you the 'pass' to enter the blockchain world.
In the future, whether chatting about cryptocurrencies with friends or reading industry news, you'll be able to easily keep up with the pace.
Remember: The blockchain is not just about trading coins; it is a completely new system of trust and value exchange. Understanding it today may help you catch the next wave tomorrow.
❤️ Follow: In the next episode, we'll discuss the 'money-making logic' of blockchain, which you definitely don't want to miss.
