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Wow! You’ve boosted since the last education article. So today, I prepared for you the second part of more difficult crypto terms. Keep calm! It won’t be hard because every word is explained in simple words! Go over!
Blockchain is a decentralized database of transactions that connects computers around the world. It is also called a continuous chain of actions that are constantly growing longer. Blockchain cannot be changed or deleted. Only new blocks can be added.
Blocks are the transactions that make up the blockchain. They contain cryptographic information, i.e. a secret cypher that ensures confidentiality and encryption of data. Since all blocks are interconnected, it is impossible to delete or change them.
#3 Block reward
It is a reward for creating a new block (newly minted cryptocurrency). The block reward incentivizes miners and validators to keep the blockchain running.
Consensus is the agreement process during which the validity of transactions and the content of the blockchain are determined. Consensus mechanisms are protocols, algorithms or other computer systems that allow cryptocurrencies to work. PoW (proof-of-work) and PoS (proof-of-stake) are the most famous mechanisms.
In simple words, cryptography is a technology that guarantees the security, confidentiality and encryption of data on the Internet to prevent scammers from interfering with users’ personal information.
A Decentralized Autonomous Organization (DAO) is governed by program code and doesn’t have a central node that manages the entire system. The main feature of DAO is democracy among all participants of the system. That is, each user can vote for changes in the blockchain, and this vote will be taken into account.
Ethereum Virtual Machine is a virtual computer responsible for operating smart contracts in the Ethereum network.
Gwei is the smallest denomination of Ethereum used to pay for services and transactions on the Ethereum blockchain. 1 Gwei is 1,000,000,000 Wei. For easier understanding, Gwei to Ethereum plays the same role as cents to dollars.
These are miners and other participants in the blockchain network who work to ensure that data is created, received and transmitted. So, nodes are responsible for the validity of transactions and blocks.
#10 Margin trading
Margin trading is based on the principle of leverage. This method gives traders access to larger amounts to increase their profits. However, margin trading has high risks, so the trader must first analyze the market situation.
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