I noticed while exploring this very exciting NFT space, there are many new words to learn and without the knowledge of them, you won’t get very far. It could be a bit confusing and much to see terms like KYC, HODL and more. But those terms are the building blocks to communicate with people digitally and just belong in this world.
In this upcoming blog series on my site I’ll explain in an easy peasy way what every word means and what you can do with it. In every blog you will find an explanation, handy links and a Youtube link for more information about it. Short, sweet and simple!
You can always have one place to learn about all you need to know when you start, just like me now, to come to and truly understand what every slang word means!
From A-Z, NFT Lingo explained!
What Is Decentralization?
It is probably a word you will come across frequently in your timeline when you scroll through Twitter. But what exactly does it mean?
Let’s start at Mariam Webster and see the non crypto translation:
de·cen·tral·i·za·tion | \ (ˌ)dē-ˌsen-trə-lə-ˈzā-shən
Definition of decentralization
1 : the dispersion or distribution of functions and powers a decentralization of powers specifically, government : the delegation of power from a central authority to regional and local authorities the decentralization of the state’s public school system government decentralization
How does this translate to Crypto and the NFT world?
First you start with understanding the difference between web 1.0, web 2.0 and web 3.0. I wrote a blog about it explaining the differences and it also has a quiz to test your new found knowledge.
So, now you know, decentralization can be possible via web 3.0.
It’s quite simple! Blockchain itself is a decentralized application.
Decentralization in blockchain refers to the transfer of supervision and decision-making from a centralized association (individual, corporation, or group of people) to a distributed network.
This is also applicable for NFT artists who mint their NFTs to Opensea for example. Or when you play Decentraland.
Decentralized networks strive to reduce the level of trust that members should have in one another and discourage them from exercising authority or command over one another in ways that undermine the network’s effectiveness.
According to Coin Telegraph it can be applied in several ways:
“Let’s take a look at the remittances market, in which foreign workers send billions of dollars across borders to their loved ones back home every year. The fees they face for doing this are often extortionate — eating into their modest income. DeFi services have the potential to slash these costs by more than 50%. Not only does this offer an incentive for an employee to earn more and be more productive, but it will also help support small businesses and economies on the other side of the world.
Loans are another pain point that can be addressed thanks to DeFi. Right now, it can be near impossible for the unbanked to borrow money, often because they lack credit records and history with a banking institution. DeFi platforms connect borrowers and lenders directly, eliminate credit checks, and enable digital assets to be collateralized.
Other forms of decentralized finance include stablecoins, a type of digital currency that shields consumers against the volatility of crypto by being pegged to another asset such as dollars or gold. Tokenization means real-world assets such as art, property and commodities can be owned and traded on blockchain, while decentralized exchanges mean users hold on to their funds at all times — reducing the risk of cyberattacks, a scourge that many centralized platforms have been struggling to shake off.”