In this edition, we’re looking at the evolution of fiat currencies like the dollar, who actually holds your money, and the two ways to push the "buy" or "sell" button when you're trading.

You may have heard that "cash is king," but on the blockchain, the king has a digital clone.

Both are currencies that can be used for everyday payments, and they usually aim to hold the exact same value (e.g., $1 = $1). However, there's a slight difference between them.

• Fiat: Picture a wrinkled, physical paper dollar bill. This is government-issued money whose value comes from law ("by decree"). It relies on traditional banking hours and borders. Moving it internationally can take anywhere from a few seconds to days.

• Stablecoin: Now, there's a glowing, holographic "digital twin" of that same dollar living entirely in code. A stablecoin (like USDC or USDT) lives on the blockchain. It is pegged to the value of fiat (it stays at $1), but it is programmable, works 24/7, and can zip across the world in seconds without needing a bank's permission. Payment providers like Visa are integrating them as a settlement layer for real-world transactions too.

The Takeaway: While fiat is analog money that you can stuff into your pockets, stablecoin is programmable money in your digital wallet.

You want to earn interest through your crypto tokens or simply trade. You can either do it in the safety of a guarded building or seamlessly through a protocol.

Both are financial systems where you can lend, borrow, and trade your assets. However, one of them requires you to fully trust your funds with people and regulators.

• CeFi (Centralized Finance): Imagine a banker in a suit taking your money into a private back office marked "Employees Only." You can't see what he does with it. You have to sign paper contracts and trust the company (like financial institutions and banks) to be honest and not lose your funds.

• DeFi (Decentralized Finance): Imagine a transparent machine made of glass pipes. You drop your coin into it, and you can see exactly where it travels every inch of the way. You don't need to trust a middleman; you just need to trust the code in the form of smart contracts that runs the machine. Some notable DeFi protocols that have moved billions of dollars over the years include UniSwap, Aave, Lido, etc.

The Takeaway: CeFi relies on trusting people, while DeFi relies on trusting code.

You open your trading app and prepare to buy or sell that token. Do you want to do so at the perfect price, or do you want it right now?

Both are trading instructions you give to an exchange to buy or sell an asset. It's just a matter of when that order gets fulfilled and at what price.

• Limit Order: Think of a fisherman sitting patiently on a dock. He has a specific hook set for a specific fish. He is willing to wait all day for the price to hit his target. If the price never gets there, the trade never happens.

• Market Order: Think of a shopper rushing through a supermarket grabbing whatever is on the shelf right now. A slight difference of a few cents doesn't matter; you just want the asset immediately. You are guaranteed to get it, but the price might slip slightly by the time you reach the register.

Limit is for patience (specific price), while market is for speed (immediate execution).

There'll be more of these explainers coming up. Let us know in the comments below if there are any blockchain terms that you may have come across but struggle to understand, and we'll help simplify them for you.

Stay tuned for more coming up!