Blockchain & Crypto 101

What is Blockchain?

A blockchain is a decentralized database shared between a large number of computer networks, called nodes. It stores information electronically in “blocks” and this data is immutable (definition - cannot be changed). Once a block is filled with its storage capacity, the block closes and links to the previous block, thus creating a chain of trusted data (read blockchain).

What is Cryptocurrency?

A cryptocurrency is a digital or a virtual currency that is secured by cryptography. This makes it nearly impossible to counterfeit or double-spend. Many (not all) cryptocurrencies are decentralized and built on the blockchain. Another key feature of cryptocurrency is that it is not issued by any central authority or bank, thus immune to government interference or manipulation (however, governments can impact the use case of cryptocurrencies through regulation).

What is Ethereum?

Ethereum is a permissionless decentralized blockchain platform that works on a peer-to-peer network that securely executes and verifies application code. Ethereum enables decentralized applications (“Dapps”). These application codes are called Smart Contract.

What is a Smart Contract?

Smart contracts is an application code that sits within a contract address. It allows participants to transact with each other without a trusted central authority/middle man. Smart contracts are written in programming languages and compiled on Ethereum to be executed on blockchain.

What is a Protocol?

A protocol is a foundational layer of code (set of rules) that tells applications how to function. It’s the program that forms the software on any given network.

What is ETH/Ether?

Ether is the token that facilitates various operations on the Ethernet network. ETH is the token ticker. ETH acts as a form of payment for the network so that participants can transact.

What is Gas?

To transact on the Ethereum network, a transaction cost is charged which rewards the network as each transaction has to be resolved by using computational effort. This is the current structure under Ethereum’s Proof-of-Work (PoW) infrastructure. This transaction cost is referred to as Gas on the Ethereum network.

What is the difference between Bitcoin (BTC) and Ether (ETH)?

Bitcoin was launched in 2009 after the financial crisis and is also the first cryptocurrency. It is a scarce cryptocurrency where the total supply could never exceed 21 Million. Often referred to as ‘digital gold’.
Ether is the token that facilitates various operations on the Ethernet network. ETH is the token ticker. ETH acts as a form of payment for the network so that participants can transact. Unlike Bitcoin, Ether does not have a maximum supply limit.