Sometime not too long ago, I was in charge of simplifying common terms and jargon in blockchain/web3/crypto to a form that even a 10 year-old could understand. I did this by creating an image-based series using as few words as possible to illustrate the similarities and differences between these commonly used terms and called it 'Same same, but Different'.

I've decided to resurrect this series now just because I think it's useful, but the main difference this time is I don't have an entire creative department to work with, so I'm using generative AI for the visuals. However, I'll still be the one writing the text!

To get started, here are the first 3:

1. Coin vs Token

While both are digital assets and often referred to as "cryptocurrencies", they are different in the sense that coins are mined and run on their own blockchain, while tokens are usually minted on other blockchains. These also include NFTs, tokenised assets, etc.

2. CEX (Centralised Exchange) vs DEX (Decentralised Exchange)

The crypto apps we know are usually centralized exchanges (CEX) that you use to trade your digital assets, which would usually require you to register and do KYC and are bound by regulations. Also, you do not own your keys. On the other hand, decentralized exchanges (DEX) are not owned by anyone, and you will need to log in using a Web3-enabled browser or through your hot wallet. Everything is under your control.

3. Layer-1 vs Layer-2.

The original layer of blockchain provides the infrastructure base where transactions happen, like the OG Bitcoin and Ethereum. However, they are too slow and expensive for everyday use, so the solution was to create Layer-2 mechanisms, that run on top of the original Layer-1s, like a high-speed flyover, to make things faster and cheaper with much lower fees.

There will be more explainers of basic blockchain and Web3 terms coming up in this series so stay tuned!

Sometime not too long ago, I was in charge of simplifying common terms and jargon in blockchain/web3/crypto to a form that even a 10 year-old could understand. I did this by creating an image-based series using as few words as possible to illustrate the similarities and differences between these commonly used terms and called it 'Same same, but Different'.

I've decided to resurrect this series now just because I think it's useful, but the main difference this time is I don't have an entire creative department to work with, so I'm using generative AI for the visuals. However, I'll still be the one writing the text!

To get started, here are the first 3:

1. Coin vs Token

While both are digital assets and often referred to as "cryptocurrencies", they are different in the sense that coins are mined and run on their own blockchain, while tokens are usually minted on other blockchains. These also include NFTs, tokenised assets, etc.

2. CEX (Centralised Exchange) vs DEX (Decentralised Exchange)

The crypto apps we know are usually centralized exchanges (CEX) that you use to trade your digital assets, which would usually require you to register and do KYC and are bound by regulations. Also, you do not own your keys. On the other hand, decentralized exchanges (DEX) are not owned by anyone, and you will need to log in using a Web3-enabled browser or through your hot wallet. Everything is under your control.

3. Layer-1 vs Layer-2.

The original layer of blockchain provides the infrastructure base where transactions happen, like the OG Bitcoin and Ethereum. However, they are too slow and expensive for everyday use, so the solution was to create Layer-2 mechanisms, that run on top of the original Layer-1s, like a high-speed flyover, to make things faster and cheaper with much lower fees.

There will be more explainers of basic blockchain and Web3 terms coming up in this series so stay tuned!