Glossary

Most important cryptocurrency terms you need to know.

Cryptocurrency is now emerging and becoming popular globally. If we compare today's crypto users with five years ago, the difference is enormous. In recent years, investments with technology have become arising with cryptocurrencies. But more than 80% of users have less knowledge or cannot focus on earning more money instead of gaining knowledge.

There are more than 10K cryptocurrencies and their terms in the market, but most people have no idea what they mean? So, here are some significant times about cryptocurrency that you should know

Altcoins

Altcoins means alternative cryptocurrencies that were developed and came into the market after the success of Bitcoin(BTC). Except for Bitcoin, all crypto is considered Altcoins, and the world's biggest Altcoin is Ethereum.

Address

In a crypto world, address is an important part, and it is a place where users can send and receive cryptos. That place is a limited series of letters and numbers.

Without a proper exchange address, receiving and sending coins or tokens is impossible. The address looks like 8UQFxwQbFeFcZNX1SN5NtKa3iqRYhem17V. Once you make the transaction, the wallet's value will update based on your address.

ATH(All-Time High)

While Bitcoin(BTC) or any cryptocurrency reached its maximum level ever is called ATH. Bitcoin reached its all-time high of approximately $65,000(47.3 Lakh in Indian Rupees) in the 2nd quarter of 2021.

Arbitrage

Arbitrage means to get a price profit from the two different cryptocurrency exchanges, for instance. Suppose any crypto is on a sale for $10,000 on the exchange one and $10,600 on the second exchange. So buying from one business and selling on another is called Arbitrage.

Blockchain

Blockchain is a word that 99% of people don't know exactly how blockchain works and its primary use.

In simple words, blockchain is one kind of unique database system which keeps information of records in blocks linked together in chronological sequence and makes it secure and non-hackable. Blockchain technology has extensive use, but the most common use is a ledger for transactions.

The primary concept of blockchain is so no one can keep control of it but, all user communities keep control unitedly. For instance, The transaction of bitcoin is forever recorded and visible for all decentralisation.

Blockchain technology is a digital ledger produced for the transactions running in individual cryptocurrencies. The transactions will be stored in the different 'blocks.' Once a block reaches its capacity, a new partnership will develop to get trades. Every blockchain has a different kind of block, some have a limited number of blocks, and some have no limit.

Some blockchains are entirely public, like Bitcoin, and everyone can see the transactions. But, some blockchains like Monero, Dash, Verge, Zcash, Horizon, Beam, Bottom Line are entirely private, making these blockchains more private and secure.

There is no specific location where the ledger is stored in the blockchain, and it will keep on the different computers around the world. Thus, it is called decentralised.

Bullish & Bearish

Being bullish means your crypto will be trending in crypto. It's called a bull run. In a bull run, you will see massive price growth. A bearish market is the opposite of a bull market, and the price will decrease.

Blocks

Blocks are the bunch of transactions with some hash codes and algorithms that store the previous block information—each block connected and stores transaction records. The miners dig the transactions information with the help of computational powers and mathematical calculations and store that information in the blocks.

Bitcoin Cash

Bitcoin did its first Hard Form in August 2017 and split it into two different parts named Bitcoin and Bitcoin Cash. Today, Bitcoin and Bitcoin Cash are two other cryptocurrencies.

Circulating Supply

Circulating supply means the overall circulated coin or token currently in the market.

Cryptocurrency Wallet

The most vital thing in the crypto world is that you can not secure and store your cryptos without them. A crypto wallet is a place where you can store and secure your cryptocurrencies for a long time without any cyber attacks.

There are two types of wallets available for cryptos. One is software, and the second is hardware. Software wallet you can use by your mobile application. Generally, most people use software wallets to store their cryptocurrencies, and hardware wallets typically use long-term holders. Exchanges are risky, and there is a chance to hack conversations, and you may lose your investments. So, If your buy is enormous and you don't want to store your crypto on exchanges, You can use a hardware wallet.

Here, you need to take care of your hardware wallet and keep your wallet passcode safe. Once you lose your passcode, there is no other way to recover your passcode and crypto. A hardware wallet is more secure than a software wallet.

Centralised

Centralised is opposite from decentralised. The real-time example of decentralisation is different fiat currencies like Dollar, Rupees, Euro, and all countries have a central authority to manage the circulation of fiat currency.

Cold Storage in cryptocurrency

Cold storage is offline storage to store cryptocurrencies or private keys to secure them from cyber attacks. The cold wallet is the same as a digital wallet, but it will not connect to the internet, and therefore the security and protection of the wallet are high-class. The unauthorised entity will not access your wallet because of the no internet and protection from cyber-attacks.

In the crypto world, cryptos are digital, but sometimes there is a change of cyberattacks, and hackers get access to your storage like software wallets. You can store your crypto offline to keep it safe and secure in cold storage.

Crypto Paper Wallet

A paper wallet is used to hold the private and public keys together in a single pair for performing crypto transactions. A paper wallet is mainly used to store cryptocurrencies. A cryptocurrency has no physical appearance like fiat currency, so a paper wallet can keep it digitally.

The paper wallet came into popularity in the earlier days of bitcoin. Recently, many options have been available to store your cryptocurrency holdings safely.

A paper wallet is a printed piece of paper with keys and QR codes to access it and store crypto. The paper wallet contains private and public key pairs to make a transaction for crypto.

Decentralised Applications (dApps)

Decentralised' is a most trending topic globally nowadays. Decentralised applications(dApps) are digital-based applications or programs that run on blockchain technology. It runs on a P2P network of multiple computers rather than a single computer system.

Ethereum is a base of dApps, and it is considered the mother of decentralised applications. The idea of Ethereum is to enable developers to build new applications on the Ethereum blockchain.

All dApps have not come with the same features. Still, a few standard features are available in every dApps, including decentralised, incentivized, open-source, community, features, popularity, and many more.

Many dApps are available in the market, worth millions, like PanCakeSwap, Unioswap, MakerDAO, CryptoPunks, and many more.

Decentralised Finance (Defi)

DeFi is a simple term for the public to get financial products on a public decentralised blockchain network. DeFi includes banking, insurance, payment processing, and money management.

Digital Currency

Digital currency acts as a currency and is available in a digital form, and it is not available in physical condition. It is also known as digital money or cybercash. It is a currency that only operates via mobiles or computers, and there is no requirement to handle digital currency by any intermediate network. It is also a very cheap method to trade currencies.

Distributed Ledger Technology (DLT)

We have seen that public ledger used to keep records. But, DLT uses autonomous computers or nodes to share, history, and synchronise all the transactions. By using DLT, you can reduce cyber attacks.

Decentralised

In the cryptocurrency world, decentralisation means there is no intermediate authority in the network, and all are spread among the series of nodes.

DAO (Decentralised Autonomous Organisation)

DAO is better known as "Decentralised Autonomous Organisation." It is decentralised and autonomous. DAO is also known as (DAC)Decentralised Autonomous Corporation. It acts as a venture capital form of fund based on an open-source code without any management and the directors of the organisation.

The rules of the DAO are embedded in the computer codes that execute themselves based on the protocol behaviour, and they implement automatically based on the specific condition. A DAO helps keep the network safe and secure without any manual intermediation by the authority. DAP also helps keep the network in speed and decision-making model and lower management costs.

Fiat

Fiat currency is a government-issued currency, and it is a government-backed currency and not supported by any commodity, including silver, gold, copper, and many more. The value of fiat money works purely on the government's supply, demand, and stability.

The fiat currencies like the Dollar, Euro, Pound, Rupees, and others are managed by the government or any country's central bank, and they can control money printing and supply.

Fully Diluted Market Cap

Multiplication of the maximum possible supply and the running price of the tokens or coins represents the diluted market cap.

Future Trading

With the help of the leverage power, you can multiply your profits by predicting the future price in the future crypto trade. You can hold crypto on the spot, but you can trade by price predictions in the future.

Gas

In a simple language, gas means fee. When you make some transactions on a particular blockchain, you have to pay a fee for that transaction. That fee is called gas, and you have to pay for that exchange when you receive or sell crypto. Higher fees mean fast transactions, and lower gas fees mean slow transactions.

Nowadays, gas fees are becoming a challenge in the crypto market. A blockchain like Ethereum(ETH) charges the highest gas fees for its transactions. one they control the gas fees, crypto will become the most potent investment network globally.

Hard Fork

Blockchain technology is growing day by day, and if you want to know about the hard fork, you have to understand what blockchain technology is and how it works first.

In simple terms, a hard fork is an event where an individual cryptocurrency splits into two different parts which work on a single blockchain but other functionalities. It is a new software update implementation protocol by blockchain technology or the nodes of the cryptocurrency network.

Hard fork sometimes becomes very dangerous. During the splits, it occurs between the miners and network nodes. The network becomes more secure. There is a change of cyberattacks as well.

A Hard Fork in blockchain has two paths where the one path is working on the current set of rules and the second path follows a new way of regulations. A hard fork is not supported backward protocol. After complex form, the old version will not exist in a new version.

ICO (Initial Coin Offering)

Initial Coin Offering(ICO) introduces new upcoming coins in the crypto world for the users. In ICO, the company aims to raise capital to create a fund for the currency. So, ICO is a way to raise money from the investors and investors receive new crypto. ICO is another form of crypto where investors get new functionalities and companies release capital, and it is a capital raising and coin offering activity.

IEO (Initial Exchange Offering)

IEO is an Initial Exchange Offering, and it is another variant of an Initial Coin Offering(ICO). IEO is the same as ICO, and both are fundraising ways. In IEO, investors can buy these assets before they are available on the market. To participate in the IEO, a user must register and complete the KYC process. After this process, the user will be able to buy tokens. So, IEO works with the help of crypto exchanges to get more investors.

Mining

In a cryptocurrency language, mining finds out the crypto transactions worldwide using computer power and complex algorithms and getting stored in a block.

Market Cap

A multiplication of a total number of circulated tokens or coins and the current coin price present the market capitalization.

Maximum Supply

Maximum supply shows the total amount of coins that will be available in the market ever.

Non-Fungible Tokens (NFTs)

NFTs are the digital tokens dedicated to real-world objects such as music, art, games, shorts, gaming accessories, and many more that run on different blockchains. NFTs are based on the Ethereum blockchain, and NFT tokens generally represent the ownership of unique items.

NFTs tokens are not like a regular cryptocurrency like Ethereum and Bitcoins. You can create or mint NFT from digital objects representing intangible and tangible objects, including art, GIFs, Music desi, shorts, video highlights, Collectibles, and more.

NFTs tokens come in digital collectible items, not in physical collector's items, So, instead of buying physical and valuable items, buy and get digital files.

Nodes in Cryptocurrency

Nodes are just computer systems that are connected around to share information. Nodes are vital to keeping the network on. Nodes are considered telecommunication networks. A network node is a point where a message can be received, created, and transmitted. Many types of nodes are available, including miner nodes, supernodes, full nodes, and SPV clients.

On-chain governance

On-change means how blockchain handles changes. In simple words, It is a system to manage and implement changes in cryptocurrency. In this system, people have a right to suggest new updates in blockchain based on voting.

Private Key in Cryptocurrency

The private key is an essential aspect of the crypto world. It is several strings that are the most expensive thing in crypto nowadays. It is not sharable, and if you share with anyone, you may lose your crypto in a minute. The key is to maintain your security when buying and selling cryptocurrency.

Public Key in Cryptocurrency

The public key is a string like we got in the private key. The difference is you can share your public key to receive crypto instead of fiat currency. You have to share your public key, and others can easily share crypto using it.

Proof of Stake (PoS)

Proof Of Stake(POS) is the most critical content you should know before jumping into the crypto world. As per their holdings, users can validate or mine crypto transaction blocks, which means more coins mean more mining power the owners can get.

With the help of the POS, if users have an ample amount of coins or tokens, miners can mine. Validate transactions. POS is an alternative POW that is an official algorithm in blockchain technology used to comply with transactions in blocks.

POW consumes energy a lot which is not beneficial for the miners. On the other hand, POS provides powers to miners according to the coin or token quantity. For example, Bitcoin(BTC) runs on a proof of work(POW) instead of proof of stake(POS).

Proof-of-Work (PoW)

Proof-of-Work (POW) is an algorithm used to confirm transactions to add new transaction blocks to the chain. The miners participate in mining and compete, and winners get rewards in Bitcoin. POW is the most popular and most usable method in cryptocurrency mining to mine new tokens and validate new tickets.

Proof of Authority (PoA)

Proof of Authority (PoA) is a reputed algorithm in the blockchain technology or authority of nodes for miners to approve creating a transaction block. This way is an alternative way of the proof-of-work pattern.

Public Ledger

Cryptocurrency supports blockchains, and blockchains need a system that stores records. Ledger is a record storage system to maintain the user's identity and documents. Each blockchain has its public ledger where it keeps the user's data. Simply, it is a system that keeps records and maintains the identity of the participants.

PUMP AND DUMP

Whales, who have a considerable amount of Bitcoins or altcoins, artificially pump the coins to encourage others to invest in the currency. After the massive profit, they dump the market.

P2P Trading(Peer-To-Peer Trading)

In cryptocurrency, P2P trading is a service or functionality of buying or selling crypto directly from the user via exchanges. Simply sharing information or any assets between the two parties without any involvement of central authority is called P2P.

Smart Contracts in Cryptocurrency

The smart contract is a simple program that is based on a blockchain. It is a code of contract or agreement between the buyers and sellers, and it has been programmed to work automatically. Smart contracts are the type of Ethereum account so, they have a balance, and they can make a transaction over the network.

As we know, that smart contract is an automated code, and it permits trusted transactions and agreements without any central authority.

An American computer scientist founded the virtual contract named 'Bit Gold' in 1998. It works like a computerised transaction protocol, and all are transparent, irreversible, and traceable.

Soft Fork

The blockchain hard fork is not the only route to upgrade the blockchain softwares, and a soft fork is necessary to upgrade the software. You can upgrade the new features and functionalities in the blockchain using a dull knife.

Satoshi in Cryptocurrency

In cryptocurrency, the smallest amount of the crypto values like 0.000001 is called Satoshi. This name came from the Bitcoin Founder. Satoshi Nakamoto. As per the crypto terms, $1 is worth 12,270 Satoshi. Like any fiat currency, crypto has been divided into smaller parts. The US Dollar is split into a smaller amount called 1 cent. Same as the Dollar, crypto is into a Satoshi.

Spot Trading

Spot Trading is also known as spot transactions, and it is a direct purchase or sale of financial assets like crypto, spot, bonds, commodities, and many more. In the world of crypto, spot trading is a buying and selling process for instant delivery.

Spot trading offers trading and investment functionality. The spot is the first way you will face while selling or buying crypto.

Total Supply

Total supply represents the collection of circulation tokens or coins and a bunch of coins or tokens not in circulation yet.

Whales in cryptomarket

In the crypto language, any individuals, investment organisation, and a group of people hold a considerable amount of Bitcoins or any cryptocurrencies known as whales. They are known as the most influential people in the crypto world, and they can easily manipulate the crypto market.

Bitcoin(BTC) whales always put more impact on the market. Either through increased volatility or decreased liquidity or both together.

White paper

White Paper means the description of a particular project which presents everything regarding the project. It's one kind of in-depth report to understand the project features. It represents the company's projects, current road maps, upcoming future projects, and achievements. The white paper also presents the company policy and legislation.

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