Welcome back to another edition of our Crypto 101 series on crypto glossary. With this guide, you’re yet another step closer to becoming a crypto pro! 

1. Stablecoin 

Imagine a cryptocurrency that stays stable in value, like a digital version of your regular currency. That's what a stablecoin is! It's designed to avoid the big price swings you might see with other cryptocurrencies, making it a safer option for everyday transactions. USDT is a stablecoin that's pegged to USD for instance. 

2. Token 

Think of a token as a digital coupon or ticket. It's a special type of cryptocurrency that can represent ownership of something, like shares in a company or access to a service in a decentralized app (DApp). Tokens can have all kinds of uses in the crypto world! You can learn more about coins and tokens in our Crypto 101: Different Types of Cryptocurrencies article. 

3. Decentralized Finance (DeFi)

Decentralized Finance, or DeFi for short, is like a digital banking system without the banks. It lets you do financial transactions like borrowing, lending, and trading cryptocurrency directly with other people, all without needing a traditional bank account. However, since DeFi isn't regulated by any central authority, it's important to be aware of potential risks. For example, users may face challenges in verifying the trustworthiness of other participants, increasing the risk of fraudulent activities or scams. 

4. Hash Rate

Hash rate is a fancy word for the computing power needed to keep the cryptocurrency network running smoothly. It’s determined by how many guesses are made per second. The more hash rate a network has, the more secure and reliable it is. 

5. Proof of Work (PoW)

Proof of Work aka mining is like a puzzle-solving contest for computers. Miners compete to solve complex math problems, and the first one to solve it gets to add a new block of transactions to the blockchain. It's like digital gold mining! 

6. Proof of Stake (PoS)

As an alternative of Proof of Work, Proof of Stake is a different way to keep the network secure. Instead of solving puzzles, participants (who are called validators instead of miners) who hold cryptocurrency can help validate transactions and earn rewards by staking their coins as collateral. It's like earning interest on your savings! 

7. Cross-Chain 

Cross-chain technology lets different blockchains talk to each other. It's like having bridges between islands – it allows you to move assets and data between different blockchain networks, opening up new possibilities for innovation and collaboration. For example if you wanted to transfer your crypto from Polygon M to Ethereum mainnet, you'd need to use a cross-chain bridge. However, these bridges can be targets for hackers, so it's essential to be cautious.

8. Atomic Swap 

An atomic swap is a way to trade cryptocurrencies across different networks directly with someone else, without needing a middleman like an exchange. It's fast, secure, and doesn't require you to trust anyone else with your money. How it works it that both parties need to deposit the correct amount of tokens within a set time frame. If either party fails to deposit the correct amount of tokens within the set time frame, the swap is canceled, and the tokens are returned.

9. Whitepaper 

A whitepaper is like the instruction manual for a cryptocurrency project. It explains what the project is all about, how it works, and what its goals are. It's a great way to learn more about a project before deciding to invest or get involved.

10. Oracles

Oracles are like messengers that bring real-world information into the blockchain world. They provide smart contracts with data, like the price of a stock or the result of a sports game, so that the contracts can make decisions based on real-world events. Without oracles, smart contracts would have very limited use as they would only have access to data from within their networks. 

By understanding these basic terms, you're well on your way to swim in the exciting ocean of cryptocurrencies and blockchain technology. Stay curious, keep learning, and remember – the journey is just beginning!

More articles from the Crypto 101 series:

• Crypto 101: The Basics of Crypto P2P Lending - A Comprehensive Guide for Beginners
• Crypto 101 : Understanding Wallets, Private Keys, and Public Addresses
• Crypto 101 : Ways To Make Money with Crypto in 2024
• Crypto 101: A Comprehensive Crypto Glossary for Beginners
• Crypto 101: A Comprehensive Crypto Glossary for Beginners II
• Crypto 101 : A Comprehensive Crypto Glossary for Beginners III
• Crypto 101: Different Types of Cryptocurrencies
• Crypto 101: Understanding Market Cap, Volume, and Circulating Supply