Ans: Web3 is an idea for a new iteration of the World Wide Web which incorporates concepts such as decentralization, blockchain technologies, and token-based economics.
Ans: Web 2.0 is the current version of the web with which we are all familiar, while Web 3.0 represents its next phase, which will be decentralized, open, and of greater utility.
Ans: Proof of Stake (POS) uses randomly selected miners to validate transactions. Proof of Work (POW) uses a competitive validation method to confirm transactions and add new blocks to the blockchain.
Proof of work is a competition between miners to solve cryptographic puzzles and validate transaction in order to earn block rewards.
Proof of stake implements randomly chosen validators to make sure the transaction is reliable, compensating them in return with crypto. Each choice has unique advantages and disadvantages.
Ans: Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.
Ans: The difference between Ethereum and Bitcoin is the fact that Bitcoin is nothing more than a currency, whereas Ethereum is a ledger technology that companies are using to build new programs. Both Bitcoin and Ethereum operate on what is called “blockchain” technology, however Ethereum’s is far more robust. If Bitcoin was version 1.0, Ethereum is 2.0, allowing for the building of decentralized applications to be built on top of it.
Dapp (Decentralized application): Peer-to-peer, permissionless, censorship resistant applications. Anyone can use them and no central organization controls them.
DAO (Decentralized autonomous organization): An algorithmic organization that has a set of rules encoded in a smart contract that stipulates who can execute what behavior or upgrade. A DAO commonly includes a governance token.
DeFi (Decentralized finance): A financial infrastructure that does not rely on a centralized institution such as a bank. Exchange, lending, borrowing, and trading are conducted on a peer to-peer basis using blockchain technology and smart contracts
DEX (Decentralized exchange): A platform that facilitates token swaps in a noncustodial fashion. The two mechanisms for DEX liquidity are order book matching and AMM.
AMM (Automated market maker): An automated market maker (AMM) is a type of decentralized exchange (DEX) protocol that relies on a mathematical formula to price assets. Instead of using an order book like a traditional exchange, assets are priced according to a pricing algorithm. This formula can vary with each protocol.
ERC-20 : Ethereum Request for Comments (ERC) related to defining the interface for fungible tokens. Fungible tokens are identical in utility and functionality. The US dollar is fungible currency in that all $20 bills are identical in value and 20 $1 bills are equal to the $20 bill.
ERC-721: Ethereum Request for Comments (ERC) related to defining the interface for nonfungible tokens. Nonfungible tokens are unique and are often used for collectibles or specific assets, such as a loan.
ERC-1155: Ethereum Request for Comments (ERC) related to defining a multi-token model in which a contract can hold balances of a number of tokens, either fungible or non-fungible.
Gas (aka Gas Prices, Gas Fees): A fee required to execute a transaction and to execute a smart contract. Gas is the mechanism that allows Ethereum to deal with the halting problem.
Governance token: Governance tokens represent ownership in a decentralized protocol. They provide token holders with certain rights that influence a protocol’s direction. This could include which new products or features to develop, how to spend a budget, which integrations or partnerships should be pursued, and more. The right of an owner to vote on changes to the protocol. Examples include the MakerDAO MKR token and the Compound COMP token.
Gwei (gigawei): Is 1,000,000,000 wei. Wei, as the smallest (base) unit of ether (ETH), is what Sats (aka satoshi) are to bitcoin. NFT (Non-fungible Token): A non-fungible token as defined by ERC-721 and ERC-1155 is a unique token often used for collectibles or specific assets, such as a loan.
Private Key: In the Private key, the same key (secret key) is used for encryption and decryption. In this key is symmetric because the only key is copied or shared by another party to decrypt the cipher text. It is faster than public-key cryptography.
Public Key: In a Public key, two keys are used one key is used for encryption and another key is used for decryption. One key (public key) is used to encrypt the plain text to convert it into cipher text and another key (private key) is used by the receiver to decrypt the cipher text to read the message. Now, we see the difference between them: