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Web3 - Metaverse

Web3 Glossary

Don’t know your DAO from your PFP? Here’s a handy guide.

From airdrops to NFTs to smart contracts, the jargon that is part and parcel of Web3 can be hard to comprehend – even for seasoned veterans of the space. If you’re interested in Web3 and its many facets, read on to get a better understanding of some of the more unusual terms floating about the metaverse.

Metaverse
Image credit: Chaosamran Studio, Shutterstock

Airdrop: The practice of distributing free cryptocurrency tokens in order to kickstart the launch of a new currency.

Augmented reality: Any technology that enhances a real-world environment with additional digital information such as 3D graphics.

Avatar: A digital representation of a user’s character within a virtual world, typically highly customizable in terms of appearance.

Blockchain: A digital ledger recording information and storing it securely while verifying its authenticity with cryptography. It grows via a process known as mining, whereby computers on the network solve increasingly complex mathematical problems in order to securely add new records – meaning that new transactions are verified and recorded without the interference of one central authority.

Cryptocurrency: Frequently abbreviated to “crypto”, cryptocurrency is a digital form of currency secured by blockchain technology.

Cryptography: The practice of securing information during transmission. The communication is first encrypted to prevent third party interference, before being decrypted on the other end with the help of a key – ensuring only the sender and receiver can access the information within. 

Decentralization: A method of organization that doesn’t rely on the control of a central authority, instead distributing decision making among participants.

Decentralized applications (Dapps): Decentralized apps are pieces of software built and hosted on blockchain technology. Examples include cryptocurrency wallets, games and financial services applications.

Decentralized autonomous organizations (DAOs): A DAO is a new form of distributed organization controlled by its members, with its rules and activity recorded on blockchain technology.

Exchange: A platform enabling users to buy, sell and trade cryptocurrency – either for other forms of digital currency or traditional fiat currencies.

FOMO: An acronym for “fear of missing out”, the phrase refers to buying into an NFT or cryptocurrency to avoid the regret that would occur if it ballooned in value.

Gas: A fee that must be paid to validate and confirm transactions on the Ethereum blockchain and similar platforms. The price is related to the amount of work required to include transactions in a new block.

GM/GN: An abbreviation of “good morning” and “good night” respectively, the greeting is a common feature of crypto communities.

Governance: In a Web 3.0 sense, governance refers to the the structuring of a blockchain and how it is led, with popular approaches including on-chain governance, where rules are encoded into the blockchain protocol, and off-chain governance, where decisions are made away from the blockchain itself.

IRL: an abbreviation of “in real life”, referring to the real world as opposed to the metaverse or cryptocurrency community.

LAND: A non-fungible token that represents ownership of virtual land in the Decentraland platform.

Layer 1: A term used to describe the base blockchain architecture, with a layer 1 network serving as a source of truth and the authority for transactions via consensus mechanisms.

Layer 2: A term describing a network building on top of an underlying blockchain, intended to extend its functionality and reduce gas fees and transaction times.

Metaverse: A term referring to a virtual 3D world in which users can interact, socialise and play, as well as an imagined future wherein the internet can be accessed as a virtual world.

Mining: The process by which new cryptocurrency units are created and transactions confirmed. Computers solve complex mathematical problems to verify transactions and add them to the blockchain network as a new block, with the first miner to solve the problem rewarded with new items of cryptocurrency.

Minting: The practice of issuing a new piece of art as an NFT, by turning it into a digital token that’s recorded on the blockchain. The process is typically handled by a marketplace.

NFTs (non-fungible tokens): An NFT is an entry on a blockchain establishing who has ownership of a digital item such as a piece of art or a trading card.
Peer-to-peer networking: A peer-to-peer network allows users to communicate with each other without resorting to a central server, as with blockchain.

PFP: An abbreviation of profile picture, the term typically is used in relation to images that can be bought as part of an NFT series and used on social media profiles.

“Probably nothing”: A phrase typically used ironically to infer that an opportunity is in fact “probably something”.

Proof-of-stake: One of two popular approaches to validating transactions on the blockchain, proof-of-stake sees users staking cryptocurrency to become validators. They are then randomly chosen to create new blocks as well as check and confirm blocks created by others.

Proof-of-work: One of two popular approaches to validating transactions on the blockchain, proof-of-work relies on the efforts of miners solving complex mathematical problems in order to add new blocks onto the chain.

Public key: One of two pairs of keys within a cryptographic system. The public key can be known to others and allows the owner to receive cryptocurrency from another user. 

Private key: One of two pairs of keys within a cryptographic system. The private key must be kept a secret to everyone except the owner and allows them to send cryptocurrency from a wallet.

Smart contract: A smart contract is a program stored on a blockchain that executes when certain conditions are met, allowing transactions and other operations to happen without the involvement of an intermediary.

Token: A slightly nebulous term for cryptocurrencies in general, token is also frequently used to describe crypto assets that piggyback on another, more popular cryptocurrency’s blockchain.

Virtual land: Created by the developers of a given metaverse platform, land is parcelled off to users who are free to utilise it within the limits of that platform’s features. Owning virtual land involves buying an NFT that confers ownership of a digital space. 

Virtual reality: A simulation typically accessed through a virtual reality headset, allowing the user to interact with a digital world.

WAGMI: An acronym for “we are gonna make it”, the term is used to show fellowship with holders of a given cryptocurrency by asserting that their investment will be successful
Wallet: Unlike a physical wallet that stores currency itself, a cryptocurrency wallet stores the keys to access your cryptocurrency on the blockchain.

Web3: A successor to the current model of web 2.0, Web3 represents a new era for the internet emphasizing decentralization and user ownership – alongside new methods of interaction in virtual worlds. 

“Wen moon”: Also found in other forms such as “wen lambo”, the intentionally misspelt phrase asks how long it will take for the price of a given digital asset to rise as high as the moon.

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