Cryptocurrency Terms to Know Before You Invest: A Beginner’s Guide
When it comes to industries that will generally confuse the newbies, the stock market and the realm of computer programming are unquestionably at the top of the list. The crypto industry, on the other hand, is a combination of the two! Each form of financial trading activity is done out in a complex computer language. It’s no surprise that beginners find it difficult to understand the concepts and processes underlying this massive new industry.
Relax, there’s no need to worry, because NOBI has compiled a glossary to help ease you into this landscape. It consists of 40 key and popular terms that you should be familiar with before investing in cryptocurrency. Now, let’s take a look at the following ultimate crypto glossary.
A pair of public and private keys that “holds” your funds.
Address / Public Key
A string of alphanumeric characters that functions as place to store, send, and receive transactions across a blockchain network. Every crypto address is unique and can also be represented as a QR code that can be read by a smartphone.
Alternative to Bitcoin—all cryptocurrencies that was launched after Bitcoin.
Annual Percentage Yield (APY)
It is an annualized return on saving or investment and the interest is compounded based on the period.
The first cryptocurrency with a blockchain that uses Proof of Work (PoW).
Blockchain, which consists of a series of blocks, is a digital ledger of all the verified transactions made on a particular cryptocurrency.
Buy the Dip
This refers to buying a security or asset after it has repeatedly performed a short-term decrease in price, in order to profit from a potential future price rise.
A bull market in crypto and stock markets refers to a period in which asset prices rise drastically.
A bear market is defined as a negative trend in prices of a market or a prolonged price declines.
Centralized Exchange (CEX)
A trading platform that is operated by a central party.
In cryptocurrency, a coin is a representation of the value of a digital asset that is generated by its own blockchain.
Cold Wallet / Cold Storage
A wallet that you can use without being connected to the internet. The cryptocurrencies in these wallets are safe from being stolen online.
Cryptocurrencies are digital assets that rely on cryptography technologies to operate.
Dollar-cost averaging (DCA) is a strategy where an investor invests a total amount of money in small amounts over time instead of all at once.
Decentralized Application (dApp)
Applications built on decentralized network, where the underlying software is open-source
D.Y.O.R. stands for “do your own research,” which is a phrase that encourages potential investors to conduct thorough research on a project before investing.
A place where cryptocurrency can be traded.
Currencies issued by a government. For instance, US Dollars (USD), Euros (EUR), and Yen (JPY).
A fork makes a new version of a blockchain, and it is often done on purpose to make improvements to a network.
FOMO (fear of missing out) is a term used to describe the feeling of fear and anxiety that you might be missing out on a potentially profitable opportunity.
A number that tells how many steps of computation are needed for a transaction on the Ethereum network.
The event when the block rewards for mining is halved.
A type of passive investment strategy in which you maintain an investment for a long period of time regardless of price or market fluctuations.
The process of requiring users to perform an identity verification.
This is a term for the total value of an industry, market, company, or asset. It is short for “Market Capitalization.”
The process of issuing new coins or tokens.
NFT (Non-Fungible Token)
A digital asset that confers ownership of a virtual good, such as a piece of digital artwork or online collectible.
Services which provide real-world data onto blockchains and smart contracts.
Secret key that allows the user to spend cryptocurrencies in the wallet.
A set of rules and procedures for transmitting data between computers.
A group of words that allow access to cryptocurrency wallets.
Digital contracts that are powered by code.
A cryptocurrency that is pegged to a stable asset, such as fiat currency or gold, rather than a central bank.
The process of locking funds into a cryptocurrency network in order to protect its security and earn rewards in return.
Two-Factor Authentication (2FA)
An additional layer of security added to the authentication process.
A unit of digital asset, usually coins issued on existing blockchains.
To the Moon
If someone says “To the Moon” or posts a rocket emoji, it means the price of a cryptocurrency is going to have a huge increase.
Volatility refers to how quickly and how much an asset’s price changes.
An interface that is used for cryptocurrencies storage. It is usually the interaction bridge between a user and the blockchain.
Individual investors or trading firms with large amounts of Bitcoin and other cryptocurrency. Whales are feared for their ability to move prices with single trades.