Blockchain FAQ

MoonCats are a digital collectible that launched in 2017 on the Ethereum blockchain. Blockchain technologies are still relatively new, and if this is your first foray into this particular type of project, here’s some background information to help you find your footing.

Blockchains are “back end” technology, which means that to be an end user of a project, you don’t need to know how everything works in order to enjoy the project. For other web applications you’ve interacted with, you likely are aware your data gets stored in “a database”, but which database the developers picked or how it actually moves your data in and out of the database isn’t that critical to you as an end user. In the early days of the internet, end users were much more directly connected to the technologies that they were using (MAC addresses, IP addresses, TCP/IP tech, Network cards, etc.), and over time the nitty-gritty details got hidden away and handled automatically for people. Blockchain technology is new-enough that if you want to be an end-user of projects using it, it’s useful to at least know some basic info of how the data is moving, and do some troubleshooting.

Vocabulary

  • Blockchain A way to store data that is append-only (it can only get new data added; no data removed), which makes it easy to be distributed (stored in many locations/copies).
  • Cryptocurrency A blockchain focused on storing financial data. Using a blockchain makes this sort of currency global, counterfeit-proof, and censorship-resistant.
  • Wallet While some of you may prefer to carry a purse in your real-world life for keeping your funds safe, in the blockchain world, the software that users keep their funds safe with are called “wallets” for all genders. Cryptocurrency wallet software is very similar to PayPal, Venmo, Square, or similar payment apps in the modern eCommerce. MetaMask and Rainbow are some of the most popular wallet software packages, and can be installed as web browser plugins for desktop use, or as mobile apps. One private key can be used in multiple wallets, so you can have access to the same account across multiple devices you own.
  • Public/Private Key Cryptography A way to uniquely identify people and check who is allowed to take different actions. This is similar to a username/password setup, but much more secure. This technology you’ve likely already been using as it’s what makes “HTTPS” browsing in a web browser secure, just your web browser handles it for you. Cryptocurrencies put this technology front-and-center. So you as a user need to guard your private key the same way you need to guard your password. Unlike a password, you do not get to pick your own password, but your wallet software will generate it for you.
    • Mnemonic Phrase A specific type of private key that is designed to be human-friendly but still very secure. It takes the form of a series of words (usually 18 or 24 words long).
  • Bitcoin A specific cryptocurrency; the one that started the trend. Bitcoin focuses on just storing financial data; a long-term store of value.
  • Ethereum A cryptocurrency that has combined the idea of keeping financial data on a blockchain, along with smart contracts to do specific, automated actions with those funds.
  • Smart Contract Similar to a legal contract in that they lay out specific rules and actions that take effect in specific circumstances and can be done by specific people. Once a smart contract is deployed to the blockchain, its logic cannot be changed. It’s possible for a smart contract’s logic to include clauses like “this contract can be updated when X is true”, so they can change, but everyone can see the specific methods they can change. Many don’t have clauses like that and so are locked into the same behavior forever.
  • Token A digital identifier, that represents some thing. That’s a very generic definition, and it allows developers to use blockchain technology’s counterfeit-proof identifiers to create new things, or bolster other things (digitizing physical things to have a blockchain representation).
    • Coin Usually is a type of token that the creator expects to hold financial value (be a medium of exchange, or fungible token in financial terms). Some examples of these would be in-store credit or loyalty points.
    • Non-Fungible Token (NFT) A type of token where each individual item is unique compared to others, even within its own group. A real-world example would be diamonds: each diamond has different attributes (its 4 Cs) that make it different from all other diamonds. It’s possible to gather a group of diamonds that are all worth “about $100”, but even among those with similar valuation, none would be exactly identical.
  • ERC20 A technical standard that smart contracts that want to create coins can adhere to, to make all other projects be able to interact with them in a unified way.
  • ERC721 A technical standard that smart contracts that want to create non-fungible tokens can adhere to, to make all other projects be able to interact with them in a unified way.