Part 08: Important Concepts for Beginners

Gas Fees (Ethereum and Similar Networks)

On some blockchains, particularly Ethereum, transaction fees are called "gas fees." Think of gas like fuel for your car:

Simple transactions need less gas. Complex transactions (like interacting with smart contracts) need more gas. When the network is busy, gas prices go up. You can pay more to have your transaction processed faster

Smart Contracts

These are self-executing contracts with the terms written in code

No intermediary needed.
Automatically execute when conditions are met.
Can't be altered once deployed

Example: Escrow services, automated payments, decentralized applications

Tokens vs. Coins

Coins

Have their own blockchain.
Bitcoin on Bitcoin blockchain, Ethereum on Ethereum blockchain.
Primarily used as currency or store of value

Tokens

Built on existing blockchains (most tokens use Ethereum)
Can represent anything: assets, voting rights, access to services

Examples: Chainlink (LINK), Uniswap (UNI)

Decentralized Finance (DeFi)

Financial services built on blockchain technology.

Lending and borrowing without banks.
Trading without traditional exchanges.
Earning interest on cryptocurrency holdings.
All automated through smart contracts

Non-Fungible Tokens (NFTs)

Unique digital assets verified on the blockchain

Each NFT is one-of-a-kind.
Can represent digital art, collectibles, game items, real estate, etc.
Proof of ownership recorded on the blockchain.
Can be bought, sold, and traded.