The transfer of authority from a centralized organization (e.g. banks or governments) to a distributed public network.
Blockchains are considered to be decentralized due to the fact data is stored across multiple locations in a peer-to-peer network.
The “state” of a system is a snapshot of that system at a given point in time. For instance, “state” might refer to an individual checking account balance; after spending $20, the state of the account should represent their new, reduced balance. The state of the system is usually maintained by trusted third party, like a bank or a company web server.
Blockchains enable decentralized networks to maintain a shared state among nodes. They allow each individual node to maintain a global state, or shared “truth”, with other network nodes without relying on a centralized party.
A protocol is a set of rules or procedures that govern a system — whether that system is a computer network, a town hall meeting, or a board game. For instance, in chess, individual players may have their own strategies — but the way in which each chess piece moves on the board is dictated by the rules (or protocol) of chess.
In networking, a protocol is a common program executed by multiple computers on the same network. These networking protocols govern the transmission and handling of information as well as execution of programs between interconnected but independent devices. For example, TCP (transmission control protocol) represents one of the foundational protocols for managing packets of information as they travel across the internet, powering applications like the world wide web, email, media streaming, and more.
In cryptonetworks, the most important protocol is the consensus protocol. This is the protocol followed by each network participant (or node) to create a single, shared state of the blockchain. In this context, consensus protocols replace a centralized record keeper or counterparty, enabling trustless, peer-to-peer interactions.
Composability allows anyone in a network to easily build on top of and around existing products and services to devise new use cases; use cases that many did not know were possible until they were invented. (Think about Excel, and how chaining functions creates an enormous number of potential computational pipelines, add Excel’s power and flexibility grows with each additional function.) Ethereum’s composability has allowed users a high degree of freedom in being able to affect relatively complex transactions under one security framework, on one chain, and with relative ease.
Interoperability is about systems talking to each other — whether devices, networks, or applications. It is a way of enabling compatibility between systems.
For instance, if a user wants to directly transfer assets/value across different blockchains, i.e. from Bitcoin to Ethereum, interoperability protocols create the “bridge” to enable this exchange.