Crypto Cheat Sheet: Familiarising Yourself With Crypto Terms
Suppose you’re getting into investing in cryptocurrency. In that case, you’re going to need to know your way around all of the fancy jargon that people are talking about. There’s no use in wanting to research all about crypto if you can’t even understand half of the terms being brought up, right?
So it’s better to familiarise yourself first with the lingo before you do a deep dive into your research.
Trading with crypto, on the other hand, also requires you to be familiar with the terms associated with it. Having insufficient knowledge about the words you will encounter along the way might hinder your performance, and since cryptocurrency comes with various risks like its volatility and possible extortion, you have to be prepared when the time comes.
It’s better to start alphabetically when it comes to terminology, right? An altcoin is any other form of cryptocurrency that isn’t Bitcoin. Even the second-most popular coin, Ethereum, can still be referred to as an altcoin. So if you want to be bigger and earn bigger in the crypto market, you should stick to exchanging Bitcoins or more popular altcoins.
Here’s the reason why all of the other cryptocurrencies in the world are just altcoin – alternative coins. It’s because Bitcoin was the first and is the most valuable coin in the market currently.
A block is just grouped data in a blockchain – and if you don’t know what that means, just go ahead to the next heading and come back here. To be more specific, blocks are just the term used for the data on the transactions that users do to either buy or sell their Bitcoins or altcoins. Blocks can only hold up to a certain amount of data, and once it has been reached, a new block will be created.
In the cryptocurrency world, where it’s not centralised, there’s no official way to keep records or data on all of the transactions happening, or is there? This is where the blockchain comes in; it’s the crypto world’s way of keeping the information that goes on between user exchanges.
So when it comes to cryptocurrency, the main thing you are trading are digital coins – essentially. Since cryptocurrency has no physical form, it is traded as “coins” to identify each unit more quickly and give it some digital value.
Cold Storage/Cold Wallet
There’s no safer way to store all of your crypto coins in one place other than cold storage – it’s called cold storage because it is kept offline where there’s nobody but you to access it. These usually are small hardware that you can bring around, like a USB flash drive or a mini-CD to keep data. However, it will take some time to access.
Cryptomining is the process of obtaining cryptocurrencies by solving complex problems and equations through the use of high-powered computers. The process also involves gathering and verifying various transactions. How cryptocurrency is earned is through the completion of verification. Whoever solves the problem first will be rewarded with crypto.
Now, on the other hand, there are hot wallets. It’s the complete opposite of what a cold wallet is. A hot wallet is the type of crypto coin storage that you can use to get to your coins faster and easier. It is also connected to the internet; thus, a faster exchange can occur. Unfortunately, since it is online, it makes it susceptible to many online attackers and hackers.
One of the terms that you frequently encounter with crypto is smart contracts. Smart contracts are usually involved with cryptos from the latest generation. It is an algorithm designed to analyse a transaction based on certain parameters. Smart contracts are automatically made by the blockchain once it meets the demands of the parameters.
You need to get yourself familiarised with plenty of other terms since this is just a little taste and which of the terms you’re going to see pretty often. You’re probably going to see many of these terms and more unknown ones on crypto exchanging platforms like Coinbase, Binance, or Gemini.