Common cryptocurrency terms you should know
The truth is that starting out in the cryptocurrency dynasty can be intimidating. Why? Because there are so many crypto terms and common words you will surely encounter .
To get you started, we’ve prepared a beginners guide to some of the key terms you’re likely to encounter in the crypto world.
Address: An address is basically a destination where a user sends and receives digital currency. These addresses usually include a long series of letters and numbers.
Airdrop: An airdrop is a procedure of distributing new tokens/coins by awarding them in a certain proportion to existing holders of a particular blockchain currency, such as Bitcoin or Ethereum etc.
Altcoin: “Altcoin” is a combination of two words: “alternative Bitcoin” or “alternative coin”. An altcoin is any crypto asset that isn’t Bitcoin.
ATH: ATH stands for “all-time high” and refers to the highest price ever achieved by a cryptocurrency
ATL: ATL stands for “all-time low” and refers to The lowest price ever achieved by a cryptocurrency.
Bag Holder: It means someone who is still holding an altcoin after a Pump and Dump crash (see “Pump and Dump” for more info). It can also just refer to someone holding a coin that is sinking in value with few future prospects.
Block: Block is a record of all or some of the most recent transactions in a certain cryptocurrency.
Blockchain: Blockchains are distributed ledgers, secured by cryptography. They are essentially public databases that everyone can access and read, but the data can only be updated by the data owners. Instead of the data residing on a single centralized server, the data is copied across thousands and thousands of computers worldwide.
Bounty: It refers to a reward posted by a group or individual to incentivize certain work, behavior, or development. For instance, referral programs may be considered a kind of bounty.
Cold wallet: A wallet that is not connected to the Internet. You can install such software on a USB drive, for instance. Cold wallets are not convenient to use but they are much more secure because the hacker would need physical access to try compromising the wallet.
Crypto: A general term that refers to everything cryptocurrency
Cryptocurrency: Digital currency that uses cryptography. Bitcoin & Altcoins are all types of cryptocurrency
Cryptography: The process of encrypting and decrypting information
Dapp: Distributed Apps. Applications without centralized control.
Exchange: An interface between cryptocurrencies and the banking system where coin traders can convert their cryptocurrencies into cash
FOMO: Fear of Missing Out. Investors with FOMO buy cryptocurrency (emotionally rather than logically) for fear of missing out on profits.
Gas: A fee which must be paid to execute network transactions.
HODL: HODL refers to buy-and-hold strategies in the context of bitcoin and other cryptocurrencies.
Hot wallet: A cryptocurrency wallet that is connected to the Internet. It can be a web application or a mobile application. A hot wallet gives you more convenience, because you can instantly send and receive payments using it.
ICO: Initial Coin Offering. An event in which a cryptocurrency project “goes public,” selling early coins in exchange for funds.
KYC: Acronym for “know your customer”, which refers to a financial institution’s obligation to verify the identity of a customer in line with AML laws.
Market Capitalization: This is defined as the total number of coins in supply multiplied by the price. Cap = supply x price.
Mining: the process that generates cryptocurrency
Peer to peer (P2P): A network where participants communicate directly
Private Key: A private key is a sophisticated form of cryptography that allows a user to access his or her cryptocurrency
Proof of Stake: It is where mining is done by those who have the hash power, time, and energy. The result is that time and energy is traded for rewards.
Proof of Work: It is a consensus mechanism that involves mining to validate transactions
Public Key: An address that individuals share with others to receive cryptocurrency.
Pump and Dump: The frowned-upon practice of buying a lot of one cryptocurrency to drive up its price and encourage others to invest, then selling the lot when there is a suitable margin.
Smart Contracts: Agreements between two parties that self-execute when their terms are met and automatically cancel when their terms are not met.
Token: A cryptocurrency created using another platform (like Ethereum). Tokens operate by using the technology of the platform on which they were created
White Paper: A technical document that outlines a project’s features, technology, and vision.
To start out in the cryptocurrency, you need to choose a wallet to store, send, and receive your coin. You can choose BrickWallet - the perfect integration of hot wallet and cold wallet
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