This is the method by which a blockchain decides on a single state of the network as well as which transactions and blocks to add to the chain. Because blockchains are operated by a large number of distributed anonymous nodes, there must be a way to guarantee that all nodes agree on the same information. There are many different consensus mechanisms but most require that participants risk something in return for the ability to add blocks to the chain and receive rewards. They are rewarded for keep the network operational and punished for adding false or inaccurate information. The most popular consensus mechanisms are Proof of Work and Proof of Stake. In proof of work, miners risk time and electricity to try to mine the next block. In proof of stake, validators risk capital by staking their coins. If they contribute to the efficient running of the network they are rewarded, if they do not they are "slashed" and their capital is reduced.

ETH is shorthand for Ether. It is the second largest digital currency by market cap apart from Bitcoin. It's common for noobs to mix up Ethereum and ETH. Ethereum is the blockchain while ETH is the network's native token. An even more noob mistake is to confuse it with Ethereum classic, which is the old fork of Ethereum and is not really maintained. ETH is the lifeblood of Ethereum. When you send ETH or use an Ethereum application (dApp), you pay network fees called gas in ETH. The fee incentivizes network miners to process and verify transactions. ETH can be divided up to 18 decimal places so you don't have to buy 1 whole ETH. For e.g. you can buy as little as 0.000000000000000001 ETH if you want.

Short for memory pool, a mempool is a small database of pending transactions on a blockchain. It can create an agonizing wait, like when you buy an NFT and have to wait for the transaction to clear. One interesting result of the mempool is MEV - Miner Extracted Value. This is where network miners can re-order transactions in the mempool for their own profit.

Miner Extracted Value. The poetic term of Ethereum miners that lurk in the shadows of the mempool, look for large trades and frontrun them to profit for themselves. Imagine in the old days when people would have a seat on the stock exchange. Orders would come through. If they saw a large order to buy a certain stock, they could potentially place one of their own orders to buyat a lower price first. Then place the large order to buy and thus reap the rewards of the price increase from the larger order. MEV is similar. Miners are limited in what they can do, however in a given Ethereum block, they can change the order of transactions. They can also insert their own transactions in the block, e.g. before the other transactions. Honestly, it’s a hard to explain and a deeply technical dark art. But it is certainly fascinating and profitable.

Contrary to popular belief, crypto mining does not involve a shovel and a pick, rather it’s a competitive process of adding new blocks to a blockchain. Mining allows new tokens to be created within a blockchain, which miners can then sell into crypto markets. See also PoW.