You’ve probably had the experience of trying to join a discussion about crypto terms, but the different terms and phrases left you feeling confused and a bit lost, right? Yeah, me too. Cryptocurrencies and the terms related to them can be hard to explain and even harder to understand, but don’t worry you’ve come to the right place. Here’s a list of 13 crypto terms that you need to know to become a crypto expert in no time.
This category includes any coin or digital currency that is not Bitcoin. What this means is that as long that coin is not Bitcoin, then it’s an altcoin, whether, it’s the second-most popular coin, Ethereum, or a lesser-known coin such as OKB or Polkadot.
The alpha of all cryptos. Bitcoin was the first cryptocurrency and is presently the most valued. It was launched on January 3rd, 2009 and, even though it has seen some fluctuations in market capital in the previous years, it has a current market value of over $50,000.
A block is a smaller unit of data within a blockchain. When a user/trader buys or sells or carries out any type of digital transaction, it is recorded, and those records are stored in blocks. A block can hold a limited amount of data and when that limit has been reached, a new block is built to continue the chain.
This is a group of sequential blocks that act as a virtual log or ledger of past transactions in the order that they were carried out. The reason it is called a ‘blockchain’ is that it can be considered to be a ‘chain of blocks. The blockchain is made accessible to the public meaning that anyone and everyone can get access to these records.
Similar in function to your house address, an address is a string of letters and numbers where crypto can be sent to and received from. It may also be in the form of a QR code that would need to be scanned.
Unlike a cold wallet that stores its asset offline, a hot wallet is a virtual crypto wallet that can be accessed online. Trust Wallet is an example of a popular hot wallet.
Cold Wallet/Cold Storage
A safe way to keep cryptocurrencies and other digital assets offline. They kinda look like a USB drive and many prefer this mode of storage because it is practically impossible to hack into it. However, even though the assets cannot be stolen, once the cold wallet is lost, so are the assets it holds.
When carrying out financial transactions, a bank or financial body will act as intermediaries during these transactions. Decentralization makes these middlemen obsolete. In other words, it transfers the control and power from recognized central authorities to a distributed network.
Decentralized Finance (DeFi)
This term is used to describe any financial peer-to-peer service/system put in place that enables users to conduct blockchain transactions without the involvement of an intermediary. A Defi works hand in hand with Decentralized Applications (DApps) whose main function is to facilitate Defi.
A merchant provider is a company that helps businesses accept payments from customers. They provide the merchant account, which is a bank account that allows businesses to process credit and debit card payments. Merchant providers also offer other services, such as payment gateways, fraud protection, and customer support.
If Bitcoin is the alpha of crypto, then Ethereum is the beta. It is the second-largest crypto and the largest altcoin. It was launched on the 30th of July, 2015 and it currently has a market value of over $4,000.
This acronym stands for ‘Hold On for Dear Life. HODL originated from a user on a Bitcoin forum in 2013 who had mistakenly misspelled ‘hold’. However, this term has grown from being a simple typo to being recognized as an acronym by all crypto traders. What the term ‘hold on for dear life’ means is to simply hold on to your current assets. To neither buy nor sell for now.
All Time High (ATH) and All Time Low (ATL)
The ATH and ATL of particular crypto is the highest and lowest price (or market cap) that coin has reached throughout its history. For example, Bitcoin has an ATH of over $60,000 which was attained in November 2021.
This is when a whale, otherwise known as a large-scale investor, deliberately buys a large amount of a certain coin to cause the market cap and price of the coin to rise. The whale then decides to sell off their assets to generate a large profit, while others who had invested while the coin’s market cap was increasing are left with losses and salty bitter tears.
To protect small scales investors and traders from the dubious acts of pumping and dumping schemes by whales, a set of rules have been created to guard against it. These rules are known as the Anti-Dumping Policy. It prevents large-scale investors from selling off all their assets at once, only allowing them to sell a small percentage of it instead. This helps keep the market fair and balanced.
Learning crypto terms can sometimes seem as difficult as learning a new language. Learn more about how to purchase ethereum with paypal in 2021. With so many terms and phrases, don’t feel ashamed if you can’t figure everything out all at once. Take it one word or phrase at a time and soon you’ll be speaking like the pros.