The Basics of Crypto
This is meant to be a quick on-ramp into crypto concepts and ideas that we need to
understand in order to design applications effectively. This is self-paced learning, so
pick the topic you want to learn:
Economics Concepts (Yes, start here)
1. What is money? Short version, medium version and the long version.
2. How is money created? https://youtu.be/mzoX7zEZ6h4
Blockchain Concepts
1. What is a blockchain? The concept and the visual example and a demo
2. What is a Bitcoin? https://youtu.be/bBC-nXj3Ng4
3. Consensus mechanisms: Proof of Stake vs. Proof of Work and other
mechanisms
4. What are smart contracts? Visual explanation
5. What are NFT’s? Basic and more detailed
Additional Information
1. The evolution of the web: With Marc Andreesen and Chris Dixon
2. Mental models to understand Web3: By Chris Dixon
3. A good overview of the crypto industry: By Chris Dixon
4. Future of Applications: By Balaji Srinivasan
Glossary of Terms to Understand
The software that allows you to interact with a blockchain and stores
Wallets your private key to encrypt messages and public keys to decrypt
them
Software wallets that are running on independent devices and are
Hardware Wallets
considered more secure as they cannot be hacked remotely
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Private and Public A long set of hexadecimal numbers that can be used to
Keys cryptographically sign transactions. The Private Key is used to
encode a message (or transaction) and the public key can be used to
decrypt that message.
A unit of account on a blockchain that is usually used to pay for
Coins conducting operations on that chain. For example Bitcoin, Ethereum
and Atom.
It is a unit of account created for specific use that is based on the
Tokens code of a different coin and therefore doesn’t have a blockchain of its
own. For example Matic, DAI, UNI, etc.
Alt Coins Anything that’s not Bitcoin
Any coin that doesn’t have good fundamentals and instead probably
Shit Coins built to simply pump its value and dump it on the market. Doge coin
is a prime example.
Metamask A software wallet that is used as a browser plug-in
Means Hold On for Dear Life. It is an investment strategy where
HODL people buy a coin and hold on to it for many years instead of selling
it.
“We Are Going to Make It” or “We All Gonna Make It”. A positive
WAGMI
affirmation.
Buy The F*&king Dip. An indication to buy a token or coin when the
BTFD
prices are low.
BUIDL Build, spelt differently to indicate building in Web3
Bear Market When sentiments in the market are low
When sentiments in the markets are high and when new all-time-
Bull Market
high’s are usually being hit
Blockchains that are the final settlement layers and provide their own
Layer 1 Chains
security
Blockchains built on top of L1 chains that usually do not perform their
Layer 2 Chains own security or finality and are instead built to handle fast and cheap
transactions
Application specific blockchains as opposed to general purpose
App Chains
blockchains
Decentralised Exchanges. They are typically exchanges where one
coin or token can be changed for another coin or token. They usually
DEX
do not have any KYC requirements. For example UniSwap,
SushiSwap, DYDX.
CEX Centralised Exchanges where the same operations as DEX’s can
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take place. They usually have KYC requirements and make it simpler
for new users.
Any coin whose value is pegged to a US dollar or any other Fiat
currency. They have properties of tokens so that they can be used in
Stable Coins crypto transactions (as Fiat currencies can’t be used in this way). But
their value is based on the real-world value of the Fiat currency it
represents.
Decentralised Finance. It represents an industry within crypto that is
trying to build equivalent infrastructures that are present in traditional
DeFi finance institutions like banks. They enable people to deposit their
currencies and earn interest, lend their money to others, borrow
money from others, etc.
Cefi, TradFi The slang for traditional finance or centralised finance
The act of securing a Proof of Stake network by depositing coins into
Staking
staking pools
If the amount of a coin or token you have is low and you can’t meet
the minimum requirements of staking, you can delegate your tokens
Delegation
to someone else and they will then stake your tokens once they have
the required number of tokens.
Liquidity Pools
Automatic Market
Makers
This is the point where the Ethereum blockchain switched its
The Merge consensus mechanism from Proof of Work to Proof of Stake. It was a
major milestone and therefore got a name.
A coding standard for tokens that are built on the Ethereum
ERC20
blockchain. Examples of this include ETH, OP, ARB and others.
A coding standard for NFT’s that are built on the Ethereum
blockchain. This is usually used when you have only one copy of an
ERC 721
NFT, called “1 of 1”. Usually used to represent ownership of
expensive objects.
A coding standard for NFT’s that are built on the Ethereum
ERC 1155 blockchain. It is usually used when multiple copies of an NFT are
produced by the creator.
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