What is an altcoin? What are cryptocurrency exchanges? Find definitions of all the cryptocurrency terms here.
Cryptocurrency is making all the headlines, attracting many investors to try their hand at crypto investments. But every piece of crypto news has terms that are native to the technology and alien to the common man. The reality is cryptocurrency is a new subject and understanding the complexity of it requires a lot of learning and research.
To help you debunk the cryptocurrency news, here’s a glossary that will help you decipher the hoity-toity words and their meanings.
A-Z Of Cryptocurrency
Yes, you have heard of Bitcoins multiple times, it’s almost synonymous with cryptocurrency. Being one of the largest crypto coins, Bitcoin’s dominance has made all other cryptocurrencies knows as “altcoins”. The hottest altcoin in the market right now is Etherum followed by Binance Coin, Cardano, and Dogecoin. So next time you read the term altcoin, it simply means alternate cryptocurrency, other than a Bitcoin.
ATH (All-Time High)
ATH stands for the highest point of price or market cap a cryptocurrency holds.
ATL (All-Time Low)
ATL stands for the lower point of price or market cap a cryptocurrency holds.
Blockchain is the technology that powers cryptocurrency. It’s a ledger system with a sequence of blocks or units of digital information, stored in an orderly manner within a public database. There are two types of blockchain, blockchain 1.0 which is the first version, and blockchain 3.0 which is the final version.
Capital refers to the sum of money you are ready to invest in any cryptocurrency.
A centralized organizational structure is a network that is controlled by a signal node or a small batch of them.
Centralized Exchange (CEX)
This term refers to a kind of cryptocurrency exchange that is operated by a company that runs it in a centralized manner.
Also known as crypto exchanges, these are websites and applications where you can buy, hold, sell any cryptocurrency of your choice. You can also see the real-time prices and all the coins in the market.
A cryptocurrency wallet holds the key to your crypto coins. Think of a key as a code that lets you make cryptocurrency transactions.
Coinbase talks about the cryptocurrency that is mineable (refer to mining in M ). Coinbase refers to the number of coins that are created from scratch as a reward for miners for mining every block.
A cryptocurrency that is off the market.
Decentralized refers to a system in which nodes work in a distributed manner to achieve a common goal.
Decentralized Applications (DApps)
These are applications that work on a decentralized network.
Encryption is a method with which information can be made into code.
Another name for Ethereum, also referring to Ether transactions.
Fork is used to create an alternative blockchain, leaving two blockchains to perform simultaneously. An example of this is Ethereum and Ethereum Classic.
From a software perspective, developers use existing source codes from an existing project, modify it and create a new project.
A crypto coin that represents the value of gold, where one gram of gold is equal to one coin.
Hard Fork (Blockchain)
Like a software fork, a hard fork is a protocol that validates all invalid transactions.
Inflation is a term that is used to describe a spike in price and fall in the purchasing value of money.
These are tools that allow traders to automatically buy or sell cryptocurrencies on a trading platform when a set price target is reached.
Liquidity describes how easily a cryptocurrency can be bought and sold.
Also known as market cap or MCAP, this term refers to the total capitalization of a cryptocurrency’s price.
When you buy or sell a cryptocurrency on an exchange at the best available price, it’s referred to as marketing buying or selling. The process of buying or selling is called a market order.
Mining is a process where blocks are added to blockchain technology to verify transactions. It is also a process that creates cryptocurrencies.
People involved in the process of mining cryptocurrencies are known as miners. Miners can be professionals employed by an organization or hobbyists.
A no-coiner is a person who does not believe in cryptocurrency investments.
A node is a basic unit of blockchain infrastructure that stores the code.
Open source is a practice where people believe in the open sharing of information for the greater good.
The price at which a cryptocurrency opens and closes during the beginning of every trading day or session.
This term defines the trade between two crypto currencies. For example, the trading pair BTC/ETH
P2P refers to the decentralized interactions between people in a distributed network.
A collection of cryptocurrency assets held by an investor is called a portfolio.
Also known as return of investment, this is the ratio between the net profit and the cost of investment.
A smart contract is a computer protocol that enables and verifies a contract on the blockchain without the involvement of any third party. It is used by software developers to create applications based on blockchain.
Tokens that are purposefully designed to be used for something.
The amount of cryptocurrency that has been traded over a set period like 24 hours.
A watchlist is a feature of a crypto exchange or website where users can create their list of cryptocurrencies and track their prices.
During a cryptocurrency transaction, when one party provides the proof of transaction without revealing the private details about the transaction, it is known as Zero-Knowledge Profit.
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