1) Understanding Blockchain and it’s usage
Though, at this point, it’s not critical to know the technicalities of every coin you’re researching or investing on, I believe knowing the basic here will help.
[A] — [B] — [C] — [D] — [E]
Every “[]” is 1 block also known as hash. In simplified terms for your ease, “[B]” is basically 1 entry/input which is linked to the previous “address” or block.
In a nutshell, “[E]” will have the record of “[D]” which has a record of “[C]” and so on till start. Therefore, [A] — [B] — [C] — [D] — [E] is Blockchain. Aha!
Blockchain are secure by design. Once recorded, individual blocks can’t be altered without risking breaking the whole chain. Breaking or “modifying” the above example takes much effort and not worth the time.Therefore, the common consensus right now is, Crptocurrency (riding on Blockchain) are decentralized.
“So, what it’s for?”
Good question. Next point.
2) Understanding Cryptocurrency
As previously mentioned, by design, Blockchain are generally secure. It is too much of a hassle to modify though not impossible. In reality, however, not many will bother to do nor attempt.
This made Blockchain the perfect system to be handled as a currency thus the term Cryptocurrency was established. *ahem* In layman terms, Encrypted Currency.
The idea of a payment system that moves away or not dependable on FIAT (your $ currency) plus it not being controlled (Centralized) by the Government or Banks is, in my opinion, the number 1 reason of the current mass adoption and the start of the Crypto boom. This is backed by companies integrating or even starting their own Cryptocurrency.
At the time of writing, there are 1394 options for Cryptocurrencies or Cryptos for short (and loads more will be listed; currently in Initial Coin Offering status).
“So are we in some sort of a bubble?”
3) Volatile times and the Bubble ahead
In short, yes. We kind of seem to be in a bubble. This does not necessarily mean stay away. This basically means prepare and educate yourself so that you are able to enter and exit at the best time.
The rate how the crypto market has been growing and expanding at a a very fast pace only signals how Cryptocurrency is one. Nobody knows what is the limit. However, upon reaching it’s maximum capacity (sooner or later), POP and it’s value will most probably plunge. Look up “Tulip Mania”.
On that note, however, it’s worth noting that Cryptocurrency as a whole is a “product”. As long there’s value to the demand, the overall Cryptocurrency market should stay healthy. The wide spread of Cryptocurrencies (aka “Coin”) options to choose from, allows the flow of equities around the market. Call it a cycle. I believe this alone is enough to not “over inflate” the bubble.
Crypto-minology
(aka Crypto Terminology)
Exchange: Site where you can trade (Buy/Sell) your coins
Wallet: Coins/tokens storage
2FA: 2 factor authentication. Adds in additional security to your wallets/exchange account
FIAT: Government issued currency. (eg. USD)
Whale: Trader who pumps in a large sum of money at a particular coin/token.
Sheep: A follower. Often clueless and panic easily.
Shark: Trader who enters market after a huge selloff. Analogy is they feed on the blood of the sheep who closed at a loss or panic sell.
SATS: A denomination of BTC
Long: Entering a buy
Short: Entering a sell
Hodl: Hold positions
TP: Take Profit
SL: Stop Loss
DYOR: Do your own research
Market Order: Orders placed to enter a buy or sell at current market prices.
Limit Order (Limit Buy/Limit Sell): Orders placed to enter a buy or sell at requested price.
Sell/Buy Wall: To see current limit order points.
Bullish: Positive/green sentiments.
Bearish: Negative/red sentiments.
ATH: All time High
ICO: Initial Coin Offering.
Shill: Constant advertising to promote or to create mass awareness.
FOMO: Fear of Missing Out
FUD: Fear, Uncertainty, Doubt
Pump and Dump: An action where price goes up and will eventually crash for quick profits. Usually done by an organized group.
Pump and Dump Group: A group created to organize massive Pumps and dump. (Please don’t participate in this toxic activity. )
Market Cap: Total value within the market
ROI: Return of Investment
Fork: A blockchain split. Usually due to implementing new ideas or a technology upgrade.
Smart Contract: Code that is on the Ethereum blockchain
DAPP: Decentralized Application.
Gas: Measurement of how much “fuel” needed to process on the Ethereum network.
Wei/Gwei: Denomination of ether
