Blockchain Terminology

Updated at Jan 9, 2020

1. What is Proof of Stake?
2. Ethereum
3. Decentralized Finance (DeFi)

1. What is Proof of Stake?

What is Proof of Stake? — Earn Passive Income with Staking

Topic: What is staking? How it’s done on Ethereum?

Bitcoin and other decentralized cryptocurrencies hold the promise of sending money digitally without any central authority. Initially, the solution to managing a blockchain, which is a fancy term for a ledger of balances that isn’t controlled by any one entity, was done through mining.

Mining
Minging is sort of a competition where powerful computers try to guess the solution to a mathematical solution. Whoever finds the solution first, earns the right to write the next page of transactions, also known as a block, into the ledger.

Thanks to the laws of math and probability, it is highly unlikely that any single person or group will gain a monopoly over updating the ledger and that’s how decentralization is maintained.

Mining’s technical term is “proof of work” — because by displaying the right solution, miners prove that they’ve put in a lot of work, as there is no other way to get to the solution aside from using computing power to constantly work at trying to guess it.

2. What is Ethereum?

Ethereum is a Do It Yourself platform for writing decentralized programs, also known as decentralized apps or Dapps.

3. What is DeFi? A Guide to Decentralized Finance