Welcome to Module 2-Course 2 of Mission Web3!
In this module, we will provide you with a comprehensive understanding of on-chain transactions, gas fees, and common web3 slang.
What is an On-Chain Transaction?
An on-chain transaction refers to a transaction that is recorded and validated on the blockchain network.
It is important to note that any and all transaction needs to be processed and confirmed by the blockchain network, which involves being added to a block and included in the blockchain's ledger.
This ensures the transparency and security of your transaction, as it is recorded on a decentralized network.
What Are Gas Fees?
Gas fees are the costs associated with performing transactions or executing smart contracts on a blockchain network.
In simpler terms, when you want to do something on the blockchain, like sending cryptocurrency or interacting with a decentralized application (DApp), you need to pay a small amount of cryptocurrency as a fee for that action to be processed by the network.
This fee is called a gas fee.
The more complex or demanding your transaction is, the more Gas it needs to complete. So, if you want your transaction to happen quickly, you might need to pay a higher Gas fee to give it a little boost.
Gas Fees Are Important Because:
Resource Allocation: They prevent the network from being overwhelmed by resource-intensive operations, ensuring fair access for everyone.
Security: By requiring a cost for each action, it prevents spam and malicious attacks on the network.
Incentives: Miners or validators who process transactions and smart contracts are rewarded with these gas fees, incentivizing them to participate in the network's maintenance.
It's worth noting that gas fees can vary widely based on network congestion.
During busy times, when many people are using the blockchain, gas fees can rise significantly.
This has led to discussions around scalability and the development of solutions to reduce gas costs.
In the web3 space, there is a unique vocabulary and set of terminologies, often referred to as "slang," that are commonly used.
Understanding these terms can help you navigate the world of blockchain and decentralized technologies.
Here are some important slang terms to know in web3:
HODL: A misspelling of "hold," it means to keep and not sell your cryptocurrency investments, even during market downturns.
FUD: Fear, Uncertainty, and Doubt. It refers to negative information or rumors spread to create fear and uncertainty in the cryptocurrency market.
DYOR: Do Your Own Research. Encourages individuals to research and verify information before making investment decisions.
DeFi: Decentralized Finance. It refers to financial applications and services built on blockchain, offering traditional financial services without intermediaries.
NFT: Non-Fungible Token. Unique digital assets that represent ownership of a specific item or piece of content.
DAO: Decentralized Autonomous Organization. It's an organization governed by smart contracts and the votes of its token holders, operating without a central authority.
Gas: The fee paid in cryptocurrency to execute transactions or smart contracts on a blockchain platform.
Rug Pull: A fraudulent action in which developers or project creators drain the funds invested in a token by unsuspecting users.
Yield Farming: The practice of staking or providing liquidity to DeFi protocols to earn rewards or interest.
Metaverse: A virtual shared space, often built on blockchain technology, where users can interact with digital assets and each other.
Whale: A term used to describe individuals or entities that hold a significant amount of cryptocurrency.
FOMO: Fear Of Missing Out. The feeling of anxiety or urgency to buy or invest due to the fear of missing out on potential gains.
ATH: All-Time High. Refers to the highest price a cryptocurrency has ever reached.
Bear Market: A market characterized by declining prices and a pessimistic outlook.
Bull Market: A market characterized by rising prices and a positive outlook.
These are just a few examples of the web3 slang commonly used in the blockchain and cryptocurrency space.
As the industry evolves, new terms and acronyms may emerge, so it's essential to stay updated and be familiar with the language of web3 to effectively participate and engage in this rapidly changing ecosystem.