Encryption knowledge pyramid to test your level

This article is based on the views of The Bakery Lianchuang pastry on the personal social media platform, and the rhythm BlockBeats organizes and translates it as follows:

The world of blockchain and encryption consists of a complex system of knowledge. I divide this system into five knowledge levels and unravel the veil of the encryption iceberg layer by layer.

Encryption knowledge pyramid to test your level

Beginner tier: a topic familiar to most beginners

1. Blockchain

A distributed, decentralized public ledger that exists in the network.

2. Books

An immutable database for storing network blocks.

3. Bitcoin

The first generation of digital currency created by Satoshi Nakamoto.

4. Ethereum

A universal platform that aims to go beyond digital currencies through the use of smart contracts and dApps.

5. Public chain

A one-layer blockchain that takes an alternative approach to the scalability trilemma.

6. Meme Coin

Cryptographic tokens derived from internet memes or with some other humorous features, such as Dogecoin, Shiba Inu, etc.

Tier 2: Themes familiar to most crypto natives

1. Smart Contracts

A program that runs when specified conditions are met to automate the execution of the protocol.

2. dApps

An application that provides similar functionality to a normal application, but runs on a peer-to-peer network.

Encryption knowledge pyramid to test your level

3. Gas

On public chains such as Ethereum, gas is a unit of measure used to describe the computing power required to perform a specific operation on the network.

4. Gas Limit

The maximum amount of gas a user is willing to spend on a particular transaction.

5. CEX

As a trusted intermediary exchange for buying and selling encrypted tokens, it belongs to a custodian institution.

6. DEX

Decentralized on-chain exchanges, allowing users to conduct peer-to-peer transactions directly on-chain, are non-custodial.

Encryption knowledge pyramid to test your level

7. Consensus Mechanism

A fault tolerance mechanism used to facilitate agreement among distributed nodes on a single state of the network. The consensus mechanism ensures that all nodes are in sync with each other and agree on transactions, which are then added to the blockchain.

8. PoW

Proof of work is a type of consensus mechanism that requires network members called “miners” to expend effort on solving arbitrary mathematical puzzles to validate transactions and add them to the blockchain.

Encryption knowledge pyramid to test your level

9. PoS

Proof of stake (Proof of Stake) is another consensus mechanism that requires users to stake Tokens to become verifiers in the network, and verifiers are responsible for the same work as miners in the proof-of-work mechanism.

10. Blocks

A data structure in a blockchain that permanently records and stores transaction data on the chain.

11. Miners

A computer or group of computers responsible for adding new transactions or validating blocks produced by other miners.

Tier 3: A subject familiar to seasoned crypto investors

1. DeFi

Decentralized finance provides financial tools that do not rely on intermediaries such as brokers, exchanges or banks by using smart contract technology on the blockchain.

Encryption knowledge pyramid to test your level

2. NFT

Non-Fungible-Tokens are non-fungible units of data stored on the blockchain that can be sold or traded. Types of NFT data units can involve digital file forms such as photos, videos, and audio.

3. The Metaverse

The Metaverse is a complex, large-scale, and interoperable network of real-time rendered 3D virtual worlds that allow an unlimited number of users to simultaneously and continuously experience it.

4. The Scalability Trilemma

The blockchain scalability trilemma proposed by Ethereum founder Vitalik Buterin states that a trade-off between the three properties of decentralization, security, and scalability is inevitable, and you can take care of one or both. attributes, but not all three at the same time.

Encryption knowledge pyramid to test your level

5. Block Difficulty

One of the most important things in proof-of-work mining is block difficulty, which is derived from the network hash rate and is used to determine how quickly miners can validate blocks.

Encryption knowledge pyramid to test your level

6. Bitcoin Halving

Bitcoin undergoes a “halving” event every 4 years, which reduces the amount of Bitcoin entering the circulating supply by halving the miner’s reward, with the aim of tightening the supply until all 21 million BTC have been mined.

Encryption knowledge pyramid to test your level

7. Layer 2

Layer 2 refers to auxiliary frameworks or protocols built on top of existing blockchain systems. The main goal of these protocols is to solve the transaction speed and scalability issues faced by the underlying network.

Encryption knowledge pyramid to test your level

8. Yield Farming

Yield Farming is like earning an annualized interest rate by depositing money in the bank. Essentially, Yield Farming is the process by which liquidity providers lock their assets in liquidity pools and receive incentives in the form of transaction fees or governance token emissions.

Encryption knowledge pyramid to test your level

9. AMM

Automated Market Maker is the underlying protocol underpinning DEXs, allowing assets to be traded permissionlessly through the use of liquidity pools instead of a traditional buy-side market.

Encryption knowledge pyramid to test your level

10. Liquidity Pool

Liquidity pools are crowdfunding token pools locked in smart contracts to support transactions on decentralized exchanges. For example, when users trade with liquidity pool protocols such as Uniswap, they do not need buyers and sellers to match orders to complete the transaction.

Encryption knowledge pyramid to test your level

11. Crypto lending

Crypto lending is similar to the concept of traditional lending. Crypto Token lenders are able to lend their idle assets to borrowers, who in turn pay interest on the lender’s assets.

12. Synthetic Assets

Synthetic assets are essentially tokenized derivatives. In traditional finance, derivatives are representatives of stocks or bonds that traders do not own but want to buy or sell, while crypto-synthetic assets allow investors to trade any crypto asset on the blockchain.

Encryption knowledge pyramid to test your level

13. Crypto Index

A crypto index is a way to gain exposure to a basket of different cryptoassets, each of which consists of a variety of different cryptoassets. These indices allow investors to gain exposure to multiple tokens without purchasing them individually.

Encryption knowledge pyramid to test your level

14. Oracle

Blockchain oracles are entities that connect the blockchain to external systems, enabling smart contracts to execute specific code based on real-world inputs and outputs.

Encryption knowledge pyramid to test your level

15. Governance

The governance structure that a decentralized web relies on in the absence of a central authority. Blockchain governance typically employs a variety of mechanisms to determine the direction of a project, ongoing updates to ensure the network operates efficiently.

16. Stablecoins

Crypto tokens whose prices are tied to crypto tokens, fiat currencies, or exchange-traded commodities, where algorithmic stablecoins are designed to achieve price stability and a circulating supply of assets. In other words, the algorithm used in the algorithmic stablecoin can guarantee the issuance of more tokens when the price rises, and buy from the market when the price falls, guaranteeing the stability of the price once.

17. Flash Loans

Flash loans are a new type of low-collateralization loan that enables users to obtain crypto loans instantly without providing collateral.

18. Arbitrage

Crypto arbitrage is a trading strategy in which investors take advantage of the slight price difference of a digital asset across multiple markets or exchanges, buying an asset on one exchange and immediately selling it on a higher-priced exchange.

19. Creator Token

Creator Tokens allow creators, social influencers, athletes, musicians, etc. to launch their own crypto tokens to monetize their communities and grow their audiences.

Encryption knowledge pyramid to test your level

20. The protocol has liquidity

Protocol Owned Liquidity is a new method of providing liquidity pioneered by Olympus DAO, which does not rely on providing incentives to liquidity providers, but instead sells discounted tokens to buyers in exchange for tokens that act as collateral, form part of the treasury of the agreement.

Encryption knowledge pyramid to test your level

21. Liquid pledge

Liquidity staking allows token holders to pledge their assets and obtain liquid derivatives that can be used in various dApps. Using liquid staking, ETH 2.0 stakers are able to simultaneously stake their Ethereum while maintaining liquidity.

22. DAOs

A Decentralized Autonomous Organization is an organization represented by rules coded by a computer program that is transparent, controlled by the organization’s members and not subject to central authority.

23. Interoperability

Blockchain interoperability refers to the ability to exchange and utilize data between different blockchain networks to move unique types of digital assets between the networks’ respective blockchains.

24. IPFS

The InterPlanetary File System is a peer-to-peer network protocol for storing and sharing data in a distributed file system.IPFS uses content addressing to individually identify each file in a global namespace that connects all computing devices.

25. ENS

Ethereum Name Service is a domain name lookup service built on Ethereum that allows crypto users to convert their machine-readable addresses into human-readable addresses, which you can think of as public Ethereum addresses Nickname generator.

Tier 4: Officially Going Down the Rabbit Hole

1. EVM

The Ethereum Virtual Machine is a software platform that developers can use to create dApps on Ethereum, and is where all Ethereum accounts, smart contracts, and the entire state history of Ethereum resides.

Encryption knowledge pyramid to test your level

2. Memory Pool

In blockchain terminology, a mempool is a waiting area for transactions that have not yet been added to a block and that have not yet been confirmed.

3. Frontrunners

Frontrunners are bots on Ethereum that constantly scan the mempool for profitable transactions. Frontrunners participate in a Priority Gas Auction (PGA) with other bots to gain priority for their transactions in a block.

4. Byzantine Fault Tolerance

In the blockchain, the Byzantine fault tolerance derived from the Byzantine generals problem refers to the fault tolerance of the network when the verification node fails and runs inconsistently.

Encryption knowledge pyramid to test your level

5. Sybil Attack

A Sybil Attack is an attack on a computer in which an attacker compromises a server’s reputation system by creating a large number of pseudonymous identities and using them to gain disproportionate network influence.

6. SHA-265

SHA-256 stands for 256-bit Secure Hash Algorithm and is used to improve cryptographic security. Cryptographic hashing algorithms produce irreversible and unique hashes, and the greater the number of possible hashes, the less chance that two values ​​will create the same hash.

Encryption knowledge pyramid to test your level

7. Full Node

Full nodes are nodes that download and check each transaction in the blockchain for validity, which requires a lot of resources and hundreds of gigabytes of disk space, but they are the most secure nodes because they are not easily blocked by invalid transaction blocks deceive.

8. Light Client

A light client can be run if the computer does not have enough resources to run a full node. Light clients do not download or verify any transactions, they only verify the block header and assume that the block contains only valid transaction records.

9. Metcalfe’s Law

Metcalfe’s Law states that the value of a network is proportional to the square of the number of nodes in the network.Suppose a network has 10 nodes, then its value is: 10×10=100.

10. The Lindy Effect

The Lindy effect is a theorized phenomenon whereby the future life expectancy of something that is less susceptible to breakage (like technology or age) is proportional to its current age.

Encryption knowledge pyramid to test your level

11. Sidechains

A sidechain is a separate blockchain that is connected to its parent chain using a two-way peg. A two-way peg enables asset swaps between parent chains and side chains at a predetermined rate.

12. Plasma

Plasma is an Ethereum Layer 2 scalability solution, a framework that allows the creation of “child” blockchains that use the Ethereum mainnet as a trust and arbitration layer.

Encryption knowledge pyramid to test your level

13. Optimistic Rollups

Optimistic Rollups uses smart contracts to relay transaction data from the Ethereum mainnet to the Layer 2 network, where a sequencer can bundle multiple transaction records into a batch and then submit that batch back to the mainnet chain in a single transaction.

Encryption knowledge pyramid to test your level

14. Zero-knowledge proofs

In cryptography, with a zero-knowledge proof, one party can prove to the other that a given statement is true, without the prover communicating any other information than the fact that the statement is indeed true.

15. ZK Rollups

Zero-knowledge Rollups are another Ethereum scaling solution that takes transaction records off the Ethereum mainnet.ZK Rollups generate cryptographic proofs that prove the validity of transactions, and each batch of transaction records contains its own proof of validity and submits it to the mainnet.

16. Keepers

Keepers are accounts owned by a class of protocols external to the protocol and incentivized to perform specific actions within the DeFi protocol. Keepers are rewarded in the form of a fixed fee or a fixed percentage of incentives, such as charging fees to clear collateralized debt, etc.

17. Beacon Chain

The Beacon Chain is an upgraded version of Ethereum that will eventually replace the traditional Ethereum blockchain currently in use. Its purpose is to introduce a new consensus mechanism for PoS and coordinate the expanded network of shards and stakers.

Encryption knowledge pyramid to test your level

18. Merge

Merge refers to what will happen when the Ethereum mainnet running on PoW is integrated with the Beacon chain which is a PoS chain.

Encryption knowledge pyramid to test your level

The fifth level: the most esoteric knowledge of encryption

1. MEV

Maximum Extractable Value refers to the ability of miners to earn profit by arbitrarily including, excluding or reordering transactions in the blocks they produce.

Encryption knowledge pyramid to test your level

2. Sharding

Sharding refers to dividing the entire Ethereum network into multiple parts, so it is called “sharding”. Each shard will contain its own independent state, greatly reducing network congestion and increasing Ethereum’s transaction throughput.

Encryption knowledge pyramid to test your level

3. Proof of data availability

Data Availability Proofs is a new technology that allows users to check with a very high probability that all the data for a block has been published by downloading only a small portion of the block.

4. Merkle tree

Merkle tree is a fundamental part of blockchain technology, it is a mathematical data structure that consists of hash values ​​of different data blocks as a summary of all transactions within a block.

Encryption knowledge pyramid to test your level

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/encryption-knowledge-pyramid-to-test-your-level/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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