The cryptocurrency market is a volatile one. There are many different types of coins out there, and each has their own specific uses. The terminology can be confusing for new investors who want to get into this space, So this post will provide some key terminologies in cryptocurrency.
Here Are Some Key Terminologies In Cryptocurrency For Beginners
1. Address
Cryptocurrency addresses are a string of characters used to send and receive Bitcoin :other cryptocurrencies. Think of it as an email address or bank account number; only much more difficult to hack!
2. Market Cap
Market Cap is also one of Some Key Terminologies In Cryptocurrency that’s Popular used .
Cryptocurrency market cap refers to the total worth of all current bitcoins in circulation, and is often used interchangeably with ‘market capitalization’. Cryptocurrency market caps change daily depending on supply and demand.
3. Altcoins
Altcoins is any cryptocurrency coins that is not Bitcoin. Example are Ripple, Ethereum, Dogecoin e.t.c
4. Airdrop
This is a Cryptocurrency marketing campaigns usually involve expedited distribution of a cryptocurrency through the population. This is done by providing coins to low-ranked traders or community members for free, in exchange for simple tasks like sharing information about their coin with friends.
5. Arbitrage
There are multiple exchanges at any given time trading in the same cryptocurrency, and they can do so at different rates. Arbitrage is the act of buying from one exchange and then selling it to another if there’s a margin between them that will make you some profit.
6. Blockchain
Blockchain is a type of distributed ledger that records transactions and stores them on blocks linked to each other. This makes the blockchain (and its data) decentralized, not controlled by one entity or party like banks are today which allows it to be open source for anyone’s use.
Blockchain also incentivizes people who help make the system run with fees & tokens in exchange for their work maintaining this technology infrastructure-level resource.
7. Circulating Supply
The limited number of coins available to trade.
The total amount of these tradable units are referred to as currency’s “circulating supply.” It may be possible for some cryptocurrencies’ creators to lock up or burn certain amounts in order make them unavailable from public trading.
8. Decentralized apps (dApps)
Decentralized apps, or dApps for short, are web applications that do not rely on a single company to function.
DAPPs often make use of Smart Contracts that allow developers to create complex applications with automated shared ledgers which reduce transactional costs while facilitating commercial activities.
They use blockchain technology and peer-to-peer networks instead of centralized servers. Decentralization is the key so no one entity can control it which means you’re free from censorship!
9. Decentralized finance (DeFi)
DeFi is a blanket term for decentralized alternatives to traditional (centralized) finance, it has been used as an umbrella term that encompasses banking, money management, Insurance payment processing e.t.c
10. Decryption
Turning your encrypted data back to plain text.
11. Deflation
The economy of a cryptocurrency is dependent on the amount and demand for it, so when there are lower demands, you will see that its price also decreases bringing down the price.
12. Dumping
When a lot of people dump at once, causing a sharp downward movement in a cryptocurrency’s price.
13. Gas
When you make a transaction on the blockchain, it will cost some fees. This type of fee is called a gas price and for everyone must pay it in a transaction carried out.
14. Faucet
A cryptocurrency reward system can be used on websites or apps to give users rewards for completing certain tasks. This is a great way of incentivizing participation by rewarding people with coins
15. Fiat
A coin, token or asset issued on a blockchain that is linked to government-issued currencies which are designated as legal tender by an issuing country
16.Mining
Mining is the process of verifying new transactions on a blockchain, which can be done by donating computer power to miners. When someone donates their computing resources as part of this process they are then rewarded with crypto when it successfully completes an encryption challenge and wins coins for that effort!
17. Node
A node is a computer that can be connected to the network of blockchain.
18. Non-fungible tokens (NFTs)
Non-fungible tokens enable virtual transactions between collectibles like art, music and trading cards and can be made with the use of smart contracts.
19. FOMO
The FOMO refers to the fear of missing out on something good
20. Proof of Authority (PoA)
In a blockchain, operated under Proof of Authority (PoA), only certain nodes are allowed to approve the miner’s ability to create blocks. This is more efficient than proof-of-work but less decentralized.
21. Proof of Stake (PoS)
Proof of Stake allows a person to validate or mine cryptocurrency based on the amount they own. Under this model, the idea is that miners will be less likely to attack a network if they have something at stake in it.
22. P2P
Acronym for “peer to peer”.
In a peer-to-peer connection, two or more computers network with each other and share data without the need for an intermediary.
23. PND
Acronym for “pump and dump”.
24. Presale
A period of time when people are able to purchase cryptocurrency from an ICO that has not yet gone public and traded on exchanges is called pre-sale or presale. These periods allow private investors or community members interested in investing their funds into these projects early access
25. Proof of Work (PoW)
Proof of work is a more traditional method to award miners for their effort and it even uses up quite some energy. However, by tying a variable to the process of hashing transactions or blocks, this proof will show that someone has done his/her part in mining these as well as create an incentive on how much he should have been rewarded with.
26. Private Key
Your wallet’s private key is like your password that you should protect with all of the power in your body. It acts as a digital signature and can be used to withdraw or sell cryptocurrency, so make sure it stays safe!
27. Public Ledger
A blockchain ledger is like a book of records where each transaction made on the network is recorded.
28. REKT
Shorthand for “wrecked” and a term used to describe when you suffered a bad loss in your trade.
29. Satoshi Nakamoto
Bitcoin was founded by a group of individuals who are still anonymous. Satoshi Nakamoto, an individual or group credited with founding Bitcoin remains completely unknown to the public and has not been identified yet as anyone but themselves.
There are theories as to who this person is, but the mystery remains unsolved and it’s unlikely that there will ever be a definite answer.
30. ShitCoin
Any Cryptocurrency that is not expected to have a positive future are called “shitcoins.”
31. Smart Contracts
Smart Contracts are also Some key terminologies in cryptocurrency. Smart contracts simplify the process of business transactions facilitating an agreement between two or more parties. The contract is written in code rather than spoken language, making it transparent to both sides.
32. Unconfirmed
When a transaction is proposed, it stays in the unconfirmed state until the network has examined blockchain to ensure that there are no other pending transactions with same coin involved. In this stage of processing, the transaction cannot be appended and made permanent on Blockchain.
33. Volatility
The volatility of an asset is a measurement for how quickly it changes in price. Cryptocurrency prices are notoriously volatile compared to other assets, as dramatic and quick shifts happen all the time.
34 Whale
Some Key Terminologies In Cryptocurrency is the term “Bitcoin whale” refers to a Bitcoin address with an amount of more than 1,000 BTC. The number in this category is only about 2,500 and there are 3 people that come close to owning 100k each worth as well.
These whale is so valuable because it has such an absurd total worth of coins!
35. Zero Confirmation Transaction
Alternative phrasing for an unconfirmed transaction.
Conclusion
We hope you enjoyed our blog post. If you’re looking for an introduction to the world of cryptocurrency, this post will give you a basic overview of some key terminologies in cryptocurrency to help you get started. I Hope Love The List of Some key terminologies in cryptocurrency!
