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Whether it\u2019s Meta, a MetaMask or the metaverse, here\u2019s an explanation for many of the most commonly-used web3 terms.<\/strong><\/p>\n Airdrop.<\/strong> In the crypto world, an airdrop is a free distribution of tokens or coins from a company directly into its users\u2019 or members\u2019 wallets.<\/p>\n Altcoins<\/strong>, or alts<\/strong>, are cryptocurrencies that are relatively new to the market and that have relatively low valuations. A conjoining of the words \u201calternative\u201d and \u201ccoin,\u201d the term \u201caltcoin\u201d initially was used to refer to any cryptocurrency that wasn\u2019t Bitcoin.<\/p>\n Augmented reality (AR).<\/strong> A technology that combines elements of virtual reality (VR) with physical reality. In its current form, AR can be facilitated by devices worn over the eyes \u2013 such as glasses or goggles \u2013 or by a smartphone or computer screen. Pok\u00e9mon Go is one common example of AR, because it blends virtual information with one\u2019s physical environment.<\/p>\n Avatar. <\/strong>An avatar is a digital rendering of a human being or other entity in VR, a video game, the internet or another virtual space.<\/p>\n Bitcoin<\/strong> is at the time of writing the most valuable cryptocurrency in the world. It was also the world\u2019s very first cryptocurrency, postulated by \u2018Satoshi Nakamoto\u2019 (which is typically presumed to be a pseudonym) in a now-famous white paper called \u2018A Peer-to-Peer Electronic Cash System\u2019 in 2008.<\/p>\n Blockchain.<\/strong> A \u2018blockchain\u2019 is a distributed digital ledger that\u2019s used to record transactions. It\u2019s an immutable database, which means that information can\u2019t be tampered with or altered once it\u2019s been recorded. (If there\u2019s an error in an entry, then a new, revised entry must be made, and both entries will subsequently be visible on the ledger.) The name comes from the fact that a blockchain stores data in \u2018blocks,\u2019 individual units that are linked, or \u2018chained,\u2019 together. New data is filed into blocks \u2013 and blocks are subsequently chained together \u2013 in chronological order, so a blockchain becomes longer and longer as more information is added to it. Each new piece of information is also assigned a timestamp, which makes it easy for users to find out exactly when it was linked to the database. The transparency and immutability of the blockchain makes it a very reliable and trustworthy business resource both for individuals and for companies.<\/p>\n Block.<\/strong> A block, the constituent element of a blockchain, is an individual unit in which data is stored.<\/p>\n Centralized system. <\/strong>This is a system that is controlled and organized according to a rigid hierarchical structure. In such a system, power and decision-making authority is concentrated in the hands of a relatively small number of individuals at the top of the hierarchy. Corporations, for example, are centralized systems.<\/p>\n Cryptography. <\/strong>A word derived from the Greek \u2018kryptos\u2019 meaning \u2018hidden\u2019 \u2013 this is the process of using mathematics to encode and protect sensitive information from malicious actors.<\/p>\n DAO. <\/strong>A Decentralized Autonomous Organization, colloquially referred to as a \u2018DAO,\u2019 is an organization that is controlled by its members and not subject to the authority of any single individual or entity. Unlike a traditional corporation or government, they are completely free of hierarchical, top-down structure. Its codes of conduct are recorded on a blockchain to ensure transparency and decentralization. Participation in a DAO is usually accessed through the acquisition of a digital token.<\/p>\n Dapp.<\/strong> A decentralized application, colloquially called a dapp, is an application constructed on the blockchain. Dapps function autonomously, according to the stipulations in smart contracts. Like any other application on your phone, dapps come with a user interface and are designed to provide some kind of practical utility.<\/p>\n DeFi. <\/strong>Decentralized finance, or DeFi, refers to a financial system built upon the blockchain, and therefore fully distributed and not subject to any centralized authority, such as a bank, government agency or a financial management firm.<\/p>\n Digital twin. <\/strong>This is a virtual rendering of a physical object. But a digital twin is more than a mere three-dimensional simulacrum \u2013 they\u2019re designed, ideally, to be as dynamic and environment-dependent as the objects they\u2019re imitating. For example, let\u2019s say a team of engineers is making structural improvements to a bridge. They could design a simulation of that bridge, a simple 3D model, which would allow them to make basic measurements and study the overall structure. But that simulation wouldn\u2019t be able to tell them much about how the wind, the traffic or any other number of more subtle environmental factors have been impacting the integrity of the bridge. To study those processes, they might distribute sensors over the bridge in order to create a digital twin. This would allow the team to create a much more informative model.<\/p>\n Ethereum<\/strong> is a decentralized blockchain network built by Vitalik Buterin in 2015. The open-source network is home to its native cryptocurrency, also called Ethereum but more commonly known simply as Ether or ETH (there\u2019s some debate about whether or not it\u2019s pronounced \u2018eth\u2019 or \u2018eeth\u2019). The Ethereum platform also gave rise to smart contracts \u2013 a subject we\u2019ll dive into another week. As of March, ETH is the second most-valuable cryptocurrency in the world, after Bitcoin.<\/p>\n Extended reality. <\/strong>Also commonly referred to as “XR,” extended reality is a category of multiple technologies \u2014 including virtual reality (VR), augmented reality (AR), and mixed reality (MR) \u2014 which, in various ways, blend virtual worlds with physical reality.<\/p>\n Fiat money.<\/strong> Not to be confused with the car brand, fiat money is a term used to refer to any kind of currency that has been declared a legal tender by a government body. (The declaration itself is often called a fiat.) Fiat money isn\u2019t backed by any intrinsically valuable commodity, such as precious metals like gold and silver. Instead, the value of fiat money is determined by the fluctuations of supply and demand. Paper money, like the US dollar, is fiat money. Fiat money is subject to an economic force called \u2018variable supply,\u2019 which means the governing body that issued the fiat can control its value by tweaking a variety of levers, such as the adjustment of interest rates. Cryptocurrency, which is not subject to the authority of any centralized authority, is often positioned as the opposite of fiat money.<\/p>\n Fungibility. <\/strong>A term used in economics to refer to a commodity that is precisely equal in value and therefore exchangeable with other identical versions of that same commodity. A $1 bill, for example, is fungible, because it can be exchanged for any other $1 bill \u2013 they have the same value and therefore, for all intents and purposes, are identical.<\/p>\n Gas.<\/strong> In the context of web3, gas refers to a fee that\u2019s required in order to execute a smart contract or transaction on Ethereum blockchain. Gas, which is often denominated in a very tiny fraction of an ETH called a WEI, is paid to node operators, AKA miners.<\/p>\n Gwei. <\/strong>The smallest denomination of the cryptocurrency ETH is called Gwei. 1 ETH is worth 1bn Gwei.<\/p>\n HODL<\/strong> is a common acronym used in the crypto space which stands for \u201chold on for dear life.\u201d It\u2019s typically invoked at times when the crypto market is undergoing some dramatic fluctuations and investors are feeling nervous, as in: \u201cDon\u2019t sell just yet, the markets will recover and your investments will bounce back if you just HODL.\u201d<\/p>\n IRL. <\/strong>Shorthand for \u2018in real life,\u2019 IRL is an acronym commonly used in the web3 space to describe a person, place, thing or event in physical \u2013 as opposed to virtual \u2013 reality.<\/p>\n Liquidity<\/strong> is a term used in economics to describe the degree to which an asset can be converted into either cash or some other asset.<\/p>\n A main network<\/strong>, or mainnet<\/strong>, is a finalized version of a blockchain that is fully developed and available for public use.<\/p>\n Meatspace<\/strong> refers to the physical world, ie the tangible counterpart to the virtual world of the metaverse. It may not be the most elegant of terms, but it\u2019s been catching on among tech circles.<\/p>\n Meta. <\/strong>Facebook, Inc changed its name to Meta (officially Meta Platforms, Inc) as part of the company\u2019s pivot toward the metaverse. There are many who mistakenly believe that the metaverse is a technology owned by Meta.<\/p>\n MetaMask <\/strong>is a software built for the Ethereum blockchain that functions as a crypto wallet.<\/p>\n Metaverse. <\/strong>\u2018The metaverse\u2019 is not synonymous with \u2018web3.\u2019 The former is the virtual landscape that\u2019s accessible via virtual reality (VR) technology, whereas the latter is a term that\u2019s commonly used to describe the next evolutionary stage of the internet. \u2018Web3\u2019 is inclusive of blockchain, cryptocurrency, the metaverse and other emergent technologies.<\/p>\n Minting<\/strong> is a term used to describe the process of registering a digital asset on the blockchain, thereby turning it into a purchasable non-fungible token. Once a NFT has been minted \u2013 given the nature of the blockchain \u2013 it cannot be altered. Minting NFTs on the blockchain requires a vast amount of energy, which has led many to criticize the blockchain and its proponents.<\/p>\n Mixed reality<\/strong>, also known as MR, is a technology that fuses virtual reality with physical reality and also allows for the interaction between those two worlds. In other words: in mixed reality, input from the physical environment directly affects the output that the user receives from the virtual world. <\/p>\n NFT.<\/strong> A non-fungible token, or NFT, is a collection of data stored on a blockchain that is non-interchangeable \u2013 in other words, it can\u2019t be replicated into multiple copies of equal value in the same way that, say, US quarters can be replicated and exchanged with one another. (See definition for \u2018fungible\u2019 above.) <\/p>\n NGMI <\/strong>is a popular slang acronym in the NFT space, meaning \u2018not gonna make it,\u2019 and used to refer to a campaign or specific token that is unlikely to attain a high value. Its opposite, WGMI \u2013 \u2018we\u2019re gonna make it\u2019 \u2013 is also commonly used.<\/p>\n P2P. <\/strong>Peer-to-peer, or P2P, is a term used to describe a network of individual computers exchanging information with one another without the oversight of a central server. Management of a P2P network is distributed among its constituent computers.<\/p>\n PAOP. <\/strong>A Proof of Attendance Protocol, or POAP, is a virtual token that serves as evidence \u2013 also commonly called a \u2018badge\u2019 \u2013 that an individual attended, either virtually or IRL, a particular event.<\/p>\n Private key<\/strong>, in crypto-speak, is an alphanumeric code that must be entered by a user in order to access one\u2019s wallet or authorize an exchange of blockchain-based assets or currency.<\/p>\n Proof of Stake<\/strong>, or PoS<\/strong>, is a system for validating transactions and establishing new blocks in the blockchain. It\u2019s consensus-based mechanism, with each validator\u2019s role in the process being directly proportional to the size of their stake in the cryptocurrency that\u2019s involved in the transaction.<\/p>\n Proof of Work<\/strong>, or PoW<\/strong>, is another system for establishing consensus and building new blocks in the blockchain. A PoW mechanism requires each participant in a cryptographic process to submit proof that they have expended a certain amount of contributory computational effort.<\/p>\n Public key<\/strong> is an alphanumeric code that\u2019s connected with a particular wallet. Analogous to a bank account number, a public key is the code that other users would input to send assets directly into your wallet.<\/p>\n Redpilled<\/strong> is a slang term used to describe a situation in which someone\u2019s worldview \u2013 or their perspective on a specific issue \u2013 has undergone a sudden and dramatic shift. The phrase refers to the famous red pill from The Matrix film franchise, which basically symbolizes the decision to swallow a hard and uncomfortable truth about oneself or about the nature of reality.<\/p>\n Smart contracts<\/strong> are blockchain-based computer programs that are designed to automatically go into effect as soon as the parties privy to the contract have fulfilled their respective obligations. Once they\u2019ve been coded and their terms have been agreed upon, they become fully automated, which negates the need for any facilitating third party. Because they\u2019re built upon the blockchain, transactions made via smart contracts can be closely monitored \u2013 but can\u2019t be tampered with after the fact \u2013 by the parties involved.<\/p>\n A test network<\/strong>, or testnet<\/strong>, is a blockchain where developers can test the functionality of new protocols, before activating them on a mainnet.<\/p>\n Tokenomics<\/strong>, a blending of the words \u2018token\u2019 and economics, is an umbrella term that refers to all of the various qualities of a virtual currency that can cause its market value to fluctuate.<\/p>\n TradFi <\/strong>is tongue-in-cheek shorthand that some in the crypto community use to refer to \u2018traditional finance\u2019 \u2013 basically the pre-DeFi paradigm of centralized financial authority, in which governments, banks and other institutions control and regulate currency.<\/p>\n Virtual reality<\/strong> (VR) is a technology that creates three-dimensional, immersive digital environments, wherein visitors can interact with other people (or rather, their avatars) and other elements of the environment. VR technology, though still in its infancy, has been advancing rapidly. Meta\u2019s Oculus Quest headset is an example of a piece of hardware that can transport the wearer to VR worlds.<\/p>\n Wallet. <\/strong>A crypto wallet is an application that stores and protects the keys to blockchain-based assets and accounts. (See definitions for \u2018private key\u2019 and \u2018public key\u2019 above.)<\/p>\n For a curated view of what\u2019s happening weekly across web3, sign up for The Drum\u2019s metaverse weekly newsletter.<\/a><\/strong><\/p>\n<\/div>\n