Get started with Blockchain

Here are some basic concepts to understand the next big thing.

In case you haven’t noticed, there’s an Internet revolution happening just in front of you. Blockchains, bitcoins, litecoins, ethereum and Dapps… Are you sure you’re ready to face it? This article will give you the first steps into the new era of the decentralized web.

What is a “Blockchain”?

Basically, is a database that is public and distributed, keeping record of all digital transactions. It is not controlled by a central authority (decentralized) and each computer that is part of the network (node) stores a copy of the blockchain, shared and public for everyone.

What is Bitcoin?

A digital currency that uses peer-to-peer technology. Decentralized, as there’s no authority to issue it or track the transactions.
You can take a look to our “Bitcoin Whitepaper made Simple” article to go deep into it.

What is Ethereum?

Ethereum is a different blockchain technology. A more open protocol than the Bitcoin one, which has the goal of doing more than just record transactions: using blockchain technology to replace internet third parties, creating a platform in which decentralized applications can be built and developed without any possibility of downtime, censorship or fraud.

What is Ether?

Ether is the cryptocurrency of Ethereum blockchain. The coin that provides the fuel for the blockchain.

What are Public and Private Keys?

The Private Key is basically your digital signature on the web. Your fingerprint on the blockchain. These usually consist of large numbers, buy are represented with numbers and letters using a Wallet Import Format (eg: 5HueCGU9RmjEXpudHD90FeQzL6qdk7Le2DdFJ). This key should not be shared with any outsider, unless all you want is your cryptocurrencies to be stolen.

The Public Key is derived from the private key transformed by an algorithm. Once this public key is hashed, you can get your Address. This address is useful to send and receive cryptocurrencies.

What are Tokens?

Tokens represent a digital asset built on top of a blockchain. This tokens or cryptocurrency tokens can be owned and transferred.
You can take the tokens as a specific amount of digital assets you control, can reassign to someone else and to which you can have access through a keyyou’ve been assigned on the blockchain.

What is a Token Sale?

A token sale is when some party offers investors a few coins of a new cryptocurrency (token) for an X price, that can be exchanged with other cryptocurrencies. These are made in order to fund the development of a new project on the blockchain.

What are the ICOs?

Therefore, ICOs (Initial Coin Offering) are basically token sales, but said in a more “official” way, again, made in order to fund the development of a new project on the blockchain.

What is a Cryptocurrency Wallet?

A cryptocurrency Wallet is a secure, digital wallet used to send and receive digital currencies. These wallets are the ones that store your private and public keys, allowing you to send and receive coins, plus they serve as a personal ledger for transactions.
Like in real life, if you lose your wallet, you lose your money, on the blockchain if you lose your private key, you automatically lose your money.

What is a DAO?

DAO stands for Decentralized Autonomous Organization. DAOs aim to make rules of the company would not able to ignore, implementing for that the Smart Contracts.

What is a Smart Contract?

Smart contracts is a type of contract in between two parties, people or entities, and in which the rules and penalties are defined around an agreement.The innovation here is that different from your average traditional contracts, Smart Contracts automatically enforce those obligations and determine whether the agreement has been successful or not. If “yes”, do this. If “no”, then do that.

These are useful to exchange values on the blockchain in a conflict free way, without the need of a third party to validate them.

What is a dApp?

A Decentralized Application (or Dapp) is an application that is open source, operates without any entity controlling it and has the data stored on a blockchain. It is incentivized by the use of tokens.

Don’t hesitate to leave a comment with suggestions, questions or any other definition you consider relevant! Let’s make the blockchain a simpler, more approachable place!