Module 01Beginner

Crypto & Blockchain Fundamentals

Build a clear beginner foundation: the internet, Web1 to Web3, cryptocurrency, blockchains, stablecoins, decentralisation and essential terminology.

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Lesson 1 of 7

What cryptocurrency is

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Follow a blockchain transaction

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Wallet builds the transaction

The wallet combines the destination, value, network and requested action. You review these details before approval.

1
Lesson 1

What cryptocurrency is

Start with the simplest useful definition: cryptocurrency is a digital asset whose ownership and transfers are recorded using blockchain or related distributed-ledger technology.

Some cryptocurrencies are native to their own networks. Bitcoin belongs to the Bitcoin network and BNB is the native asset used on BNB Smart Chain. Other assets are tokens created by smart contracts on an existing network.

The word crypto covers many very different assets and technologies. A coin, a stablecoin and a token used by an application may all appear in the same wallet, but they can have different issuers, risks and purposes.

A wallet does not contain physical coins. It gives you the ability to use cryptographic credentials to authorise actions associated with blockchain addresses. The blockchain keeps the public record; the wallet helps you interact with that record.

💡 Why this matters

If you understand the difference between a network, its native coin and tokens on that network, many later concepts—gas fees, token contracts and network selection—become much easier.

🧪 Practical exercise

When you see an asset in a wallet, ask three questions: What network is it on? Is it the network's native asset or a token? What contract identifies the token, if it has one?

✅ Key takeaways
  • Crypto is a broad category, not one single technology.
  • Networks, native coins and tokens are different things.
  • Your wallet authorises actions; the blockchain maintains the transaction record.
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Lesson 2

How blockchains work

A blockchain is a shared database whose participants follow agreed rules for adding and verifying new state changes.

Public blockchains are replicated across many computers called nodes. Transactions are grouped into blocks, and blocks are linked using cryptographic references. Network participants use a consensus mechanism to agree on valid additions to the chain.

This design allows people who do not share one central database administrator to verify the same transaction history. Different blockchains use different consensus systems, validator structures and security assumptions.

It is better to say blockchain records are designed to be tamper-resistant than to claim that every blockchain is magically impossible to change. Security depends on the protocol, its participants and the conditions under which consensus is maintained.

💡 Why this matters

A blockchain explorer can show you what the network recorded. That makes independent verification possible instead of relying only on screenshots or another person's statement.

✅ Key takeaways
  • Nodes share and verify blockchain state.
  • Blocks are cryptographically linked.
  • Consensus rules determine how valid state changes are accepted.
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Lesson 3

Centralised vs decentralised systems

Centralisation and decentralisation describe where control, custody and verification sit—not whether a service is automatically good or bad.

A centralised exchange can hold assets for customers and maintain user accounts in its own systems. A non-custodial wallet lets the user control the credentials needed to authorise blockchain transactions.

Decentralised systems distribute important functions across network participants or smart contracts. In practice, many Web3 products combine centralised and decentralised components, so it is useful to examine custody, governance, hosting and contract control separately.

The important question for a learner is: who can control my funds or change this system? That answer may differ between a blockchain, a wallet app, an exchange and a Web3 application.

💡 Why this matters

Understanding who controls what helps you judge where you are relying on a company, where you are relying on code and where responsibility rests with you.

✅ Key takeaways
  • Custody and control matter more than labels.
  • Many real systems mix centralised and decentralised components.
  • Always identify who can control funds, credentials and system changes.
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Lesson 4

Internet, Web1, Web2 and Web3

The internet is the underlying network; the Web is one system that uses it, and Web1, Web2 and Web3 describe broad stages or models of how web services are built and controlled.

The internet is the global network infrastructure that lets computers exchange data. The World Wide Web uses that infrastructure to identify and retrieve linked resources such as websites, pages, images and application data. Email, messaging and other internet services are not automatically the Web, even though people often use the terms interchangeably.

Web1 is commonly described as read-focused: users mainly visited static pages published by site owners. Web2 added rich applications and read-write participation. Social networks, online banking, cloud software and e-commerce let users create content and transact, but a company normally controls the account, database, permissions and platform rules.

Web3 adds blockchain accounts, smart contracts and digitally transferable assets to web applications. Instead of only logging into a company's database account, a user may connect a wallet and sign an action that a blockchain records. This can support user-controlled assets and open participation, but it also introduces gas fees, irreversible transactions, smart-contract risk and personal key-security responsibility.

A Web3 application still normally uses familiar Web2 technology for its website, mobile interface, hosting, APIs and support. It is therefore better to examine each layer than to assume that a Web3 label makes an entire product decentralised. Ask where the data lives, who controls the interface, who can change the contract and who controls the signing keys.

💡 Why this matters

Learners need to know when they are using an ordinary website account and when a wallet signature can create an irreversible on-chain action.

🧪 Practical exercise

Compare online banking with a decentralised exchange. Identify the login method, who holds the account records, who can reverse or block an action, how payment is authorised and what happens if access credentials are lost.

✅ Key takeaways
  • The internet and the Web are related but not identical.
  • Web2 applications usually rely on company-controlled accounts and databases.
  • Web3 can add wallet-based identity, smart contracts and user-controlled assets.
  • Most real Web3 products combine centralised and decentralised layers.
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Lesson 5

Digital assets and stablecoins

Stablecoins are digital assets designed to track a reference value, commonly a fiat currency such as the US dollar.

USDC is an example of a fiat-referenced stablecoin. Circle describes USDC as a digital dollar backed by highly liquid cash and cash-equivalent assets and designed to be redeemable 1:1 for US dollars through eligible Circle services.

Stable does not mean risk-free. Stablecoins can involve issuer risk, reserve risk, smart-contract risk, network risk, liquidity risk and the possibility of losing their intended price relationship.

A stablecoin name or ticker is not enough to prove that two tokens are the same asset. The network and exact token contract matter. Later modules will teach you to verify both.

💡 Why this matters

Stablecoins are widely used for payments and Web3 applications, but users must still verify the correct network and token contract before transferring them.

✅ Key takeaways
  • Stablecoins aim for price stability; they do not guarantee it.
  • Issuer and network details still matter.
  • Verify the exact token, not just its ticker symbol.
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Lesson 6

Essential Web3 terminology

A small vocabulary gives you a map for the rest of the Academy.

Wallet: software or hardware used to manage blockchain accounts and sign transactions. Address: the public destination used to receive assets. Private key: secret cryptographic material used to authorise transactions. Recovery phrase: a human-readable backup from which wallet keys may be derived.

Gas: the fee mechanism used to pay for network computation and transaction processing. Smart contract: code deployed to a blockchain that can execute according to its programmed rules. DApp: an application that interacts with blockchain networks or smart contracts.

Transaction hash: a unique identifier you can use to look up a transaction on a blockchain explorer. Contract address: the blockchain address identifying a specific deployed smart contract or token contract.

💡 Why this matters

These terms appear constantly in wallets and Web3 applications. Understanding them reduces the chance that you approve something merely because another person told you to click it.

✅ Key takeaways
  • Public addresses can be shared; private keys and recovery phrases cannot.
  • Gas pays for network activity.
  • Transaction hashes and contract addresses are useful verification tools.
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Lesson 7

Module 1 key takeaways

The goal of Module 1 is understanding—not memorising technical jargon.

You should now be able to distinguish a blockchain network from an asset that runs on it, explain why a wallet is more than a place where balances are displayed, and describe why blockchain records can be independently checked.

You should also understand that words such as decentralised and stable do not remove risk. Good Web3 habits begin with identifying the network, the asset, the party or contract you are trusting, and the action your wallet is being asked to authorise.

💡 Why this matters

Every later module builds on these distinctions.

🧪 Practical exercise

Before moving on, explain to another person—in your own words—the difference between a blockchain, a wallet, a coin and a token. If you can explain it simply, you understand the foundation.

✅ Key takeaways
  • Identify the network.
  • Identify the asset or contract.
  • Understand the action before signing.
  • Verify independently whenever possible.
Module 1 field reference

Crypto definitions & abbreviations

Search the language used in wallets, exchanges, blockchain explorers, market discussions and Web3 applications.

59terms shown
AddressFoundations

A public blockchain destination used to receive assets or identify an account or contract.

In the fieldAlways verify the full address and network before sending.
Address PoisoningSecurity

A scam that places a look-alike address in transaction history so a user may copy it instead of the intended destination.

In the fieldRetrieve addresses from trusted sources and verify the middle characters as well as the beginning and end.
AirdropWeb3

A distribution of tokens or NFTs to wallet addresses, sometimes as a legitimate reward or promotion and sometimes as a scam lure.

In the fieldAn unsolicited airdrop should not be claimed, swapped or trusted without independent verification.
ATHAll-Time High

The highest recorded market price of an asset up to that point.

In the fieldMarket commentary may say an asset is near or has broken its ATH.
APRAnnual Percentage Rate

A yearly rate that generally does not include the effect of compounding.

In the fieldUsed when comparing borrowing, lending or staking rates.
APYAnnual Percentage Yield

A yearly return estimate that includes an assumed compounding effect.

In the fieldA high advertised APY is not a guarantee and may involve material risk.
AMLAnti-Money Laundering

Policies and controls intended to detect and prevent illicit movement of funds.

In the fieldRegulated services often combine AML checks with identity verification.
BlockchainFoundations

A replicated ledger whose participants follow protocol rules to validate and order state changes.

In the fieldA blockchain explorer lets you independently inspect what the network recorded.
BridgeNetworks

A protocol that moves or represents value or messages between separate blockchain networks.

In the fieldBridges add smart-contract, validator, liquidity and destination-asset risks.
CEXCentralised Exchange

A company-operated trading platform that commonly holds customer assets and maintains internal account records.

In the fieldExamples of field questions include who has custody and whether withdrawals are enabled.
CoinFoundations

A blockchain's native asset, typically used to pay network fees and help secure or operate that network.

In the fieldBNB is native to BNB Smart Chain; a BEP20 asset is a token on that network.
ConsensusNetworks

The protocol process by which network participants agree on valid transactions and the accepted blockchain state.

In the fieldProof of Work and Proof of Stake are different consensus approaches.
DAppDecentralised Application

An application whose functions interact with blockchain accounts or smart contracts.

In the fieldA DApp can still have centralised websites, operators or upgrade controls.
DAODecentralised Autonomous Organisation

A coordination or governance structure that uses smart contracts and token or membership-based voting.

In the fieldDAO does not automatically mean fully decentralised or legally incorporated.
DEXDecentralised Exchange

A smart-contract-based venue where users trade assets from connected wallets rather than a traditional order-taking intermediary.

In the fieldUsers must verify token contracts, slippage, approvals and pool liquidity.
DeFiDecentralised Finance

Blockchain-based financial applications such as swaps, lending, borrowing and liquidity pools.

In the fieldDeFi adds smart-contract, oracle, liquidity and governance risks.
DLTDistributed Ledger Technology

A broader category of systems that replicate and coordinate records across multiple participants.

In the fieldBlockchain is one form of DLT; not every distributed ledger uses blocks.
DYORDo Your Own Research

A reminder to independently verify claims, contracts, teams, risks and primary sources.

In the fieldDYOR is not a substitute for evidence; document what you checked.
DustingSecurity

Sending a very small amount of an asset to an address, sometimes for spam, wallet analysis or as part of a scam pattern.

In the fieldA dust transfer does not reveal the private key, but do not follow embedded links or copy unexplained addresses from history.
EVMEthereum Virtual Machine

The deterministic execution environment that runs Ethereum smart-contract bytecode across network nodes.

In the fieldEVM-compatible chains can use much of the same Solidity tooling, but keep separate state, assets and chain IDs.
EOAExternally Owned Account

An EVM account controlled by a private key rather than by deployed contract code.

In the fieldA normal wallet account is commonly an EOA; a contract account behaves differently.
FUDFear, Uncertainty and Doubt

Market slang for negative claims or sentiment that may influence behaviour, whether justified or not.

In the fieldLabeling criticism as FUD does not disprove it; verify the underlying evidence.
FOMOFear of Missing Out

Emotional pressure to act because others appear to be profiting or an opportunity seems temporary.

In the fieldFOMO is a common driver of rushed transfers, poor verification and scam losses.
Fiat CurrencyFoundations

Government-issued money such as ZAR, USD or EUR that is not a blockchain-native asset.

In the fieldA fiat-referenced stablecoin aims to track a fiat value but is not physical cash.
GasNetworks

The fee mechanism used to pay for blockchain computation and transaction processing.

In the fieldGas is normally paid in the network's native coin, not the token being transferred.
HashFoundations

A fixed-size cryptographic output derived from input data, designed to change significantly if the input changes.

In the fieldHashes help link blocks, identify data and detect modification.
HODLHold On for Dear Life

Crypto market slang for holding an asset through volatility rather than selling.

In the fieldIt describes a behaviour, not a risk-management strategy or guarantee of recovery.
InternetFoundations

The global network infrastructure and protocols that allow connected computers and services to exchange data.

In the fieldThe Web, email and messaging are services that use the internet; they are not the internet itself.
KYCKnow Your Customer

A process through which a service verifies a customer's identity and related information.

In the fieldCentralised exchanges and fiat on-ramps commonly require KYC.
L1Layer 1

A base blockchain that provides its own consensus, security and transaction settlement.

In the fieldBitcoin, Ethereum, BNB Smart Chain, TRON and Solana are examples of L1 networks.
L2Layer 2

A scaling network or protocol that processes activity above a base chain and settles or anchors results back to it.

In the fieldBase, Arbitrum One and OP Mainnet are Ethereum L2 examples.
LPLiquidity Pool

Smart-contract-held asset reserves used to support swaps, lending or other DeFi activity.

In the fieldLP can also refer to the liquidity provider or the token representing a pool position.
MainnetNetworks

A live production blockchain where transactions use assets with real-world value.

In the fieldTestnet assets normally have no market value and should not be bought.
Market capMarket Capitalisation

A rough valuation calculated as current token price multiplied by circulating supply.

In the fieldMarket cap does not equal cash held, liquidity available or money invested.
MEVMaximal Extractable Value

Value that block producers or specialised actors may extract by ordering, inserting or excluding transactions.

In the fieldMEV can affect swap execution through front-running or sandwich-style activity.
NFTNon-Fungible Token

A token whose identity is distinct rather than interchangeable one-for-one like a fungible token.

In the fieldAn NFT can represent art, access, credentials or other unique records.
OracleWeb3

A service or mechanism that supplies external data, such as prices, to blockchain applications.

In the fieldA lending protocol can fail if its oracle data is manipulated or unavailable.
P2PPeer-to-Peer

Direct interaction between participants without a traditional central intermediary handling every step.

In the fieldP2P does not remove counterparty, payment or scam risk.
PhishingSecurity

Impersonation or deceptive messaging designed to steal credentials or persuade a user to approve a harmful action.

In the fieldCrypto phishing may target a recovery phrase, login, token approval, permit or wallet signature.
PKPrivate Key

Secret cryptographic material used to authorise actions for a blockchain account.

In the fieldNever share it; control of the private key generally means control of the account.
PoSProof of Stake

A consensus model in which validators commit stake and participate in proposing or confirming blocks.

In the fieldPoS designs differ in validator selection, penalties and decentralisation.
PoWProof of Work

A consensus model in which miners expend computation to compete in adding valid blocks.

In the fieldBitcoin uses PoW; energy and hardware secure the competition.
Seed phraseRecovery Phrase

A human-readable backup from which a wallet can derive private keys and accounts.

In the fieldAnyone who obtains it may recreate and control the wallet; support never needs it.
RPCRemote Procedure Call

An interface through which wallets and applications read blockchain data and submit transactions to a node.

In the fieldChanging an RPC changes the connection endpoint, not the underlying account keys.
RWAReal-World Asset

A blockchain token or record linked to an off-chain asset, claim or right.

In the fieldRWA value depends on legal enforceability, custody and issuer structure as well as code.
SlippageMarkets

The difference between an expected trade price and the price at which the trade actually executes.

In the fieldLow liquidity or large orders can increase slippage; high tolerance can increase risk.
Smart ContractWeb3

Program code deployed at a blockchain address and executed according to network rules.

In the fieldVerify the contract address, permissions and transaction action before signing.
StablecoinFoundations

A digital asset designed to track a reference value such as a fiat currency.

In the fieldStablecoins still carry issuer, reserve, liquidity, contract and network risks.
TickerFoundations

The short name or abbreviation used to identify a cryptocurrency or digital asset, such as USDC for USD Coin or USDT for Tether.

In the fieldA ticker is a convenient label, but the contract or mint address identifies the exact token more reliably.
TokenFoundations

A digital asset implemented by a smart contract or token program on an existing blockchain.

In the fieldIts contract or mint address identifies it more reliably than its ticker alone.
TVLTotal Value Locked

An estimate of assets deposited in a DeFi protocol or group of protocols.

In the fieldTVL can be affected by token prices and does not measure safety or available liquidity.
TX / TXNTransaction

A signed instruction submitted to a blockchain to transfer value or change network state.

In the fieldThe transaction hash is used to inspect status and details on an explorer.
UTXOUnspent Transaction Output

The spendable output model used by Bitcoin, where transactions consume prior outputs and create new ones.

In the fieldA Bitcoin balance is assembled from spendable UTXOs rather than one EVM-style account balance.
ValidatorNetworks

A network participant that checks protocol rules and helps propose or confirm blocks.

In the fieldValidator duties and security assumptions depend on the consensus design.
WalletSecurity

Software or hardware that manages account credentials and signs blockchain actions.

In the fieldThe wallet displays data and signs; the blockchain records balances and transactions.
Web1Web3

A broad label for the early, mainly read-focused Web where users mostly consumed static pages published by site owners.

In the fieldWeb1 is a historical simplification, not a strict technical protocol version.
Web2Web3

The interactive read-write Web of platform accounts, user-generated content, cloud applications and company-controlled databases.

In the fieldOnline banking, social media and most modern web applications use Web2 patterns.
Web3Web3

A broad model for web applications that use blockchains, wallet-based accounts, smart contracts or transferable digital assets.

In the fieldA Web3 product can still rely on centralised websites, APIs, operators and upgrade controls.
WWWWorld Wide Web

A system of globally identified and linked resources accessed over internet protocols, commonly through a web browser.

In the fieldA website is part of the Web; the underlying internet also carries many non-Web services.
Primary-source references

Verify the learning material

The Academy uses authoritative primary sources wherever practical and converts them into beginner-friendly explanations.