Blockchain & Web3 Glossary

Blockchain is a decentralized, digital ledger technology that records transactions across a distributed network of computers. Each transaction is securely stored in blocks that are linked together, making the data immutable and transparent. Commonly used in cryptocurrencies like Bitcoin, blockchain eliminates the need for intermediaries, ensuring trust, accuracy, and security. Beyond crypto, it is transforming industries by providing tamper-proof, verifiable records in areas like supply chain, finance, and healthcare.

An NFT (non-fungible token) is a unique digital asset stored on a blockchain that proves ownership and authenticity of a specific item—whether it's digital art, music, videos, or in-game content. Unlike cryptocurrencies like Bitcoin or Ethereum, NFTs are non-interchangeable and hold individual value. They introduce scarcity to the digital world by assigning ownership to otherwise easily copyable files. Most NFTs follow the ERC-721 or ERC-1155 standards on the Ethereum blockchain, but other blockchains like Solana and Polygon also support them. NFTs have become central in digital art, collectibles, and Web3 gaming, with marketplaces like OpenSea enabling global trade of these one-of-a-kind assets.

DeFi (Decentralized Finance) is a blockchain-based ecosystem that offers financial services—such as lending, borrowing, trading, and insurance—without relying on banks or traditional intermediaries. Built mostly on Ethereum, DeFi platforms use smart contracts to automate transactions and enable peer-to-peer interactions. With 24/7 access and no geographic restrictions, DeFi aims to create a transparent, open, and inclusive financial system. Core components include decentralized exchanges (DEXs), lending protocols, stablecoins, yield farming, and insurance dApps. While DeFi unlocks powerful financial innovation, users face risks like smart contract bugs, market volatility, and regulatory uncertainty.