Crypto Basics

Crypto lending applies a familiar idea, lending and borrowing, to digital assets. One side lends out their crypto and earns interest. The other side borrows it and pays interest for the privilege.

DeFi is short for decentralized finance. It's the name for financial services, lending, borrowing, trading, saving, that run on a blockchain instead of through a bank.

Most cryptocurrencies move in price constantly. A stablecoin is the deliberate exception. It's a crypto token designed to hold a steady value, most often pegged one-to-one to a national currency like the US dollar.

Solana is a blockchain built around one priority: speed. Where some networks focus on being maximally decentralized or maximally secure, Solana was designed to process a very high number of transactions quickly and cheaply.

Doing anything on a blockchain costs a small fee. On Ethereum and many other networks, that fee is called gas.

Staking is what proof of stake looks like from a regular user's side. Once you understand that a network is secured by tokens locked up as collateral, staking is simply how you take part in that.

Every blockchain needs a way to decide whose version of the record is the correct one. That process is called consensus, and proof of stake is one of the main approaches in use today.

A node is a single computer taking part in a blockchain network. If the network is the crowd, a node is one person in it.

We've covered what a blockchain is as a record. The blockchain network is the living system that keeps that record running.

A smart contract is easier to grasp with a plain example. Imagine a vending machine. You put in the right amount, you press the button, and the machine releases your item. No cashier, no negotiation. The rules are built into the machine, and it follows them every time.