Common cryptocurrency terms
Look, when even Paris Hilton starts talking in cryptocurrency terms , you know that what was once dismissed as “Internet nerd money” is on the fringe of achieving mainstream adoption. That means it’s probably about time to take a closer look at it.
But crypto is as obtuse as it is trendy, and all those worrisome headlines about scams and hacks and, uhm , unwelcome crypto ATMs, only further adds to the confusion.
Well, that’s why we’ve prepared this handy cheat sheet to explain 20 common crypto terms you should know if you’re thinking of dabbling in crypto. 1. Bitcoin
The cryptocurrency that started it all. Bitcoin was introduced on 3rd Jan 2009, based on a whitepaper published by the mysterious Satoshi Nakamoto. This was apparently done as a reaction to the actions of American financial institutions that caused the global financial crisis of 2008. And no, we still don’t know who Nakamoto is.
Since its inception, Bitcoin has been the leading cryptocurrency in terms of price and market cap. Altcoins largely track Bitcoin’s price movement, leading many analysts to use Bitcoin as the benchmark for the entire crypto market. 2. Altcoin
“ Altcoin ” is a catch-all term used to describe any cryptocurrency that isn’t Bitcoin. This distinction is important because Bitcoin is the first cryptocurrency ever created, and all other cryptos came afterwards.
Some altcoins are based on Bitcoin, whereas others are completely original. Certain altcoins are highly popular and well-known; some such examples include Ethereum, Cardano and Solana. 3. Blockchain
A blockchain is the technology underlying a cryptocurrency. It looks like how it sounds – blocks of data chained to one another in sequence, forming a digital ledger.
Blockchains are used for storing financial transactions and other forms of data in a transparent and secure way, while guaranteeing the fidelity of the data recorded within.
Before a new block of data can be added, it has to be verified by network participants, who each hold a copy of the blockchain. Any data found to be invalid is discarded, ensuring only legitimate transactions are added to the blockchain.
Additionally, data recorded on the blockchain cannot be changed, preventing illegal alterations to sensitive or important records.
Finally, the transactions recorded on blockchains are open. Anyone can view them using a compatible blockchain viewer or browser. 4. Bear/Bull/Crab Market
Reddit-speak that describes the three possible directions the crypto market can take – rising, falling or sideways.
A bear market means prices are falling, while a bull market means prices are going up. When prices make no meaningful headway in either direction over a period of time – hence, moving sideways – Redditors call it a crab market .
Due to the relatively high volatility in the crypto market, and perhaps also the impatient nature of many crypto investors, these terms are bandied about with a far higher frequency than in traditional markets. 5. Coin/Token
While “ coin ” and “ token ” are used interchangeably when talking about cryptocurrencies, there are technical differences between them.
The main difference is this: Crypto coins have their own blockchains, while crypto tokens are built on an existing blockchain.
For example, ETH (Ether), being native to the Ethereum blockchain, is a coin. Meanwhile, BAT (Basic Attention Token) operates on the Ethereum blockchain. It is not native, and hence, is a token.Coins and tokens are also used in different ways and have different functions. For example, coins may be used for payment, and to store value. Tokens, meanwhile, represent assets, deeds or voting rights.However, for the average crypto user, coins and tokens may be considered one and the same. We included this entry so you can show-off. You’re welcome. 6. DeFi The hottest thing in 2020 in the crypto world, DeFi – short for DeCentralised Finance – refers to the advent of innovative financial services and bank-like platforms for crypto investors.Some of the services offered by DeFi include loans, lending, trading of assets and derivatives, and earning interest or yield on crypto holdings.DeFi is powered by smart contracts, allowing complex transactions to be performed faster, and without the need for paperwork and costly middlemen. 7. Ethereum Ethereum is the blockchain of Ether (ETH), the second largest cryptocurrency by market cap. It is sometimes referred to as the digital silver to Bitcoin’s digital gold.The Ethereum network has the largest number of developers by far. A recent Electric Capital Developer Report counted over 4,000 monthly active developers working on Ethereum, compared to around 680 on Bitcoin.The […]
source 20 Common Cryptocurrency Terms To Know In 2022, So You Won’t FOMO When Friends Gush About It
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