Every new industry comes with its own glossary. A professor at UCLA once said to us, “… class if you learn the glossary of terms in this class you are sure to pass the final exam”. Of course, he didn’t say we would ace the course but at least we would pass! He was right and I remember his advice to this day. There are too many crypto/blockchain terms to define in this short article but in honor of my former professor allow me to share seven crypto/blockchain terms you should know. Let’s do it in alphabetic order.

Bitcoin: is a decentralized crypto-currency that is not limited to any nation. It is a global currency. It is completely decentralized. It was created in 2008 by an anonymous person(s) named Satoshi Nakamoto. The purpose was to allow peer-to-peer transactions without a central authority. Proponents say it can be a medium of exchange, a store of value, and/or a unit of account, which are the three primary functions of money. (Personally, I think the only use case for Bitcoin is possibly a store of value but let’s not get side tracked.)

Blockchain: a blockchain is a digital ledge of transactions that is duplicated, decentralized and distributed across the entire network of a computer system. Blockchain is the technology behind crypto-currency. See below.

Coinbase: is an exchange where people and institutions can buy, sell and trade crypto-currencies. Coinbase is largest centralized crypto exchange in the USA and is a public company whose shares are sold on the Nasdaq exchange. (I use Coinbase. But believe me they don’t pay me to say that nor am I offering financial advice.)

Crypto-currency: a crypto-currency is a form of money that can be used for payment. It circulates without the need for a central monetary authority. Crypto currencies are created using cryptographic methods, hence the name crypto-currency. Bitcoin is the most famous crypto-currency but there are hundreds of other crypto-currencies in circulation.

Decentralized Finance (DeFi): DeFi is an emerging financial technology and method of conducting finance. It is based on distributed digital ledgers that use blockchain technology. DeFi removes intermediaries, e.g. banks, financial institutions. Basically, the idea is to cut out middle-men. (Middle-men need love too is what middle-men would say, ha, ha!)

NFT: NFT is an acronym that means Non Fungible Token. An NFT is a cryptographic asset on a blockchain. It has unique identification codes and metadata that make each NFT unique. Each NFT is different from any other and all others. NFT can be used to represent real wold items such as art or even real estate. The University of Nicosia issued me an NFT for completing an on-line course related to DeFi. Check it out on my profile.

Trilemma: Scalability, decentralization and security represent the core features of blockchain technology. To date, blockchain developers have had to prioritize two of the three core features because thus far it has been impossible to optimize for all three. Put another way, you can’t have it all baby, at least not yet. However, there are smart computer engineers working on solving the trilemma via sharding, side chains, modular chains, and other technologies.

Now you know seven blockchain/crypto currency terms. Keep reading and learning to expand your glossary! Until next time.

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