New to Web 3.0? Here’s a guide to help you get started with unfamiliar terms. Dig in!

Due to the rising influence of web3 in the world, and the African technology ecosystem, it is important to create a repository for beginners new to the space. This article attempts to list the most common terminologies used in the space, across the different sectors that incorporate web3, from gaming to minting NFTs to cryptocurrencies.

These are some of the common terms in the web3 space.

AltCoin

Bitcoin was the first cryptocurrency invented and has gained a lot of popularity since then. AltCoin means “alternative coin”, which covers all other coins that are not BitCoin, like Ethereum, Arbitrum, and the rest.

Airdrop

An airdrop can mean a lot of things according to different contexts, and it is the same in the crypto web3 ecosystem.

An airdrop is a small amount of coins sent to wallet addresses. It is a marketing strategy used by companies to market a new cryptocurrency. It helps increase awareness in the web3 ecosystem. To qualify for airdrops, wallet owners would need to own a minimum amount of coins and perform the tasks the company requests.

There are different types of airdrops. They include standard airdrop, bounty airdrop, holder airdrop, exclusive airdrop, and raffle airdrop.

There are plenty of airdrop scams, so it is important to conduct a full investigation before taking one on. Scenarios like receiving unsolicited crypto funds and getting access to free primary investments count as traps for scams.

Address

An address, a wallet address, is owned by an individual and is used to send and receive cryptocurrencies in the blockchain space. It is a unique combination of letters and numbers.

Application Programming Interface (API)

An API is a piece of code written to enable two applications to connect and share information. In crypto, it is used to create wallets, ensure transactions are carried out successfully, monitor and manage accounts, integrate blockchain into applications, and ensure these applications are functional.

Base Fee

The base fee is the minimum amount (gas fee) you need to pay in order for a transaction to be completed successfully on the blockchain space. They are paid in ETH, short on Ethereum.

Buy The Dip (BTD)

This is an action that signifies the purchase of a cryptocurrency because of its temporary drop in monetary value. This is sometimes encouraged because it helps boost wallet addresses that have it when it eventually goes back up.

Bitcoin (BTC)

Bitcoin, popularly known as BTC, is the first decentralized cryptocurrency to exist in the blockchain space. It was created in 2009 by Satoshi Nakamoto, a group of anonymous developers. It is the most popular and valuable cryptocurrency in the world. It can be bought and sold on various cryptocurrency platforms. It spurred the creation of other cryptocurrencies.

Bridge

A bridge, otherwise known as a crypto bridge or cross-chain bridge. Bridges connect different blockchains and allow the transfer of information between them.

Block

A block is a permanent storage container for transaction data in a blockchain. It is made up of long numbers which cover encrypted information from old and new transactions. In order for a block to be created, the information within it must be verified by a network.

Blockchain

This is a commonly used term that describes a decentralized structure that houses a list of transactions conducted across peer-to-peer (P2P) networks. It stores the information of these blocks as transactions are carried out, and shares them with all the computers that are part of this process. This transaction list is visible to the public, but cannot be accessed by anyone else except an authorized sign-in from its owner.

Cold Wallet

In the literal sense, a wallet is used to store physical money and other sensitive information. In blockchain technology, it serves the same purpose as it is used to store cryptocurrencies, or coins, of any sort. There are different kinds of wallets. A cold wallet is a digital wallet that does not have any sort of connection to the internet. It is built in this manner to prevent pilfering by scammers. It is also known as cold storage and is known to be more secure than other types of wallets.

Cryptojacking

This is a scenario where a certain amount of cryptocurrency is withdrawn from an individual’s wallet address without their consent. This can happen due to clicking on phishing websites, having malware on your device where your accounts are active, and the presence of embedded mining code on your devices as well. It also causes a noticeable reduction in the speed and efficiency of your devices, so it is important to be on the lookout for it.

Cryptocurrency

This is a form of digital currency that can be used for online transactions which recognize it as a valid tender. These currencies have gained massive popularity in the previous years and have been announced as a form of legal tender in some countries such as El Salvador and the Central African Republic (CAR). It has an edge over physical currencies because it cannot be counterfeited.

Consensus

When there is consensus, it means that an agreement has been reached by two or more parties. The consensus mechanism is a compilation of protocols that ensures a transaction is authentic, and the distributed nodes present agree on a state of blockchain.

Fork

A fork is a phenomenon that occurs in the blockchain space where a blockchain is halved, in two equal parts. A fork often occurs when a blockchain network makes an upgrade to its system or changes existing rules. There are two types of forks; hard fork and soft fork.

Gas

Gas is the pricing system on the Ethereum network. The gas fee is the transactional amount paid by miners on a blockchain platform, mostly Ethereum, to access their computational power and carry out certain activities, like mining.

Hard Fork

After a fork occurs, a hard fork is created when the two separate blockchain sections are incompatible. Here, the split is permanent and cannot be backward-compatible.

Permissioned blockchain

There are two types of blockchains; public blockchains and private blockchains. Permissioned blockchain is closed and can only be accessed by individuals given permission by the administrations of that platform.

Soft Fork

After a fork occurs, a soft fork is produced when two separate blockchain sections are compatible. Here, the split can be reversed.

Token

A token is a digital asset, often mistaken for a coin that has some sort of value in the blockchain space. They are created by several blockchain platforms and can represent access to a certain activity, or stand as shares for a project. It can also be an incentive for miners to be attracted to a new/ existing ecosystem.

Conclusion

The list of web3 buzzwords and terms is an ever-growing one, as new technology is being discovered every day. Another list will be shared soon, to help increase your knowledge and keep you updated. Be on the lookout!

For further reading:

Ethereum Glossary
Alchemy Web3 Glossary