Cryptography is used to protect sensitive information such as financial transactions, military communication, and personal communications. It involves the use of mathematical algorithms to convert plaintext (unencrypted data) into ciphertext (encrypted data) that can only be read by authorized parties who have the decryption key.
Decentralized Finance
Decentralized Finance, also known as DeFi, refers to a financial system that operates on a decentralized, permissionless, and open-source blockchain network, such as Ethereum. The DeFi system eliminates the need for intermediaries, such as banks or financial institutions, and instead allows individuals to transact with each other directly, peer-to-peer.
Decentralization
Decentralization in blockchain refers to the distribution of power, control, and decision-making across a network of participants, rather than being concentrated in a single central authority. In a decentralized blockchain network, all participants have an equal say in verifying and validating transactions and maintaining the integrity of the network.
Blockchain
Blockchain is a decentralized, distributed ledger that records transactions across multiple computers in a secure and transparent way. It uses cryptography to ensure that once a block of data is recorded, it cannot be altered or deleted. This makes it suitable for applications such as digital currencies, supply chain management, and secure data sharing. The most famous blockchain is the one used by Bitcoin.
Cryptocurrency
Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates independently of a central bank or government. Bitcoin, the first and most widely used cryptocurrency, was created in 2009. Other popular cryptocurrencies include Ethereum, Ripple, and Litecoin. Cryptocurrency transactions are recorded on a public digital ledger called a blockchain, which allows for secure and transparent transfers without the need for a third party intermediary. However, the value of cryptocurrencies can be highly volatile and they are not widely accepted as a form of payment by merchants.
