Thread by @laishawadhwa

It’s Day 6 of #web3glossary !

F: Fiat, F-NFT**, Fork, Full node**

P.S.: If you’ve recently discovered this thread series- I’ll be sharing easy to understand explanations for web3 jargons and terminologies every day.

LFG🚀🚀

Fiat:

There are 3 different types of money: commodity money, fiat money, and bank money

Fiat money = paper money.
It’s a currency established as legal tender, often backed and regulated by a government, such as the US Dollar, the Indian rupee and the Euro

Since it is not tied to a tangible asset, the value of fiat money is dependent on responsible fiscal policy & regulation by the government.
Irresponsible monetary policy can lead to
inflation & even hyperinflation of a fiat currency

We've seen this during the past recessions!

Fractionalized-(NFT /Ownership)

The prices of popular NFTs can run into millions, making them prohibitively expensive for the average buyer. 🫤

Having a small piece of a popular yet expensive NFT is much better than acquiring full ownership of several insignificant ones at the same price, considering the profitability perspective.
Isn't it?

It’s a way of locking an NFT into a smart contract, & then dividing it into fractions that can be issued as fungible tokens.(ERC-721 token is split into multiple ERC-20 tokens)

This lowers the price of ownership & allows artwork & other digital assets to be owned by a community

📌The Doge NFT sale is a real-world example of NFT fractionalization. In June 2021, the Doge meme, , was sold for a whopping $4 million.
PleasrDAO, who purchased the NFT, later offered fractional ownerships of the NFT in $DOG tokens that fans could purchase for as low as $1.

Fractionalized ownership finds its use in multiple other domains such as Metaverse and Real estate💯

F-NFTs can be used to allow groups of investors, or individuals to come together and buy virtual land/ other digital assets within the virtual world.

In real estate F-NFTs (converting real estate to a NFT) allow multiple parties, and not just one, to share the property’s ownership.

We aren’t there yet, but the adoption of this will definitely make investing in real estate easier and more affordable in future.🚀🚀

Full node

Refers to any program/server that downloads the
entire Ethereum blockchain, address states, and validates new blocks.

There are other nodes: light, master, archive etc: More on these coming soon👀

Running your own full node is the only way to have full control & to ensure that all the rules of the blockchain are being followed. It helps the network as full nodes enforce the consensus rules, no matter what.

Miners an eg of servers that run full nodes on the blockchain

Fork

It’s a change in a blockchain’s protocol. When a fork happens, the chain splits - producing a second blockchain that shares all of its history with the original one, but is headed off in a new direction.

Fork can be a soft fork or Hard fork
👇👇

When these changes are minor, it results in a soft fork. It’s like a software upgrade for the blockchain

When the changes are more fundamental, it can be a hard fork...

... leading to the formation of a separate chain with different rules which is no longer backwardcompatible with prev blocks

But, why do we need forks?🤔

Just like our softwares need upgrades, blockchain needs to be upgraded:

📌To add new functionalitoes

📌Address security risks

📌Resolve a disagreement within the community about the cryptocurrency’s current state and direction

Thats a wrap!

I’ll be sharing information on the new vocabulary of the web for next 30 days.

It’s like a free crash course on the terms and methodolgies in Web3.

📌Follow me @laishawadhwa for more such web3 gyaan!

📌RT the first tweet to share with more folks.