The currency that is in the digital form, better known as virtual currency, is called cryptocurrency. It is based on a networking system that is spread across multiple computers.
With the help of cryptocurrency, money transfer becomes faster and even cheaper. The best part of using cryptocurrency is that chances of forgery become negligible as it is safeguarded by cryptography. Today, the market is full of cryptocurrencies, but the most commonly used among them is Bitcoin.
Although cryptocurrency usage is not a very difficult task, if you are new to this digital currency world, you need to be updated with the terminology; otherwise, dealing in cryptocurrency shall become quite a mystifying job. Therefore, understanding jargon becomes essential. So, let’s begin with some of the basic terms.
Top Crypto Terms To Know About
An altcoin is simply any coin that accepts bitcoin. There are about a thousand coins in the crypto world, among which Ethereum is the second most popular one.
Bitcoin falls under the category of most popular form of cryptocurrency.
- Bitcoin cash (BCH)
A fork of bitcoin was used to create a cryptocurrency named bitcoin cash. Bitcoin was already in use when it was launched. It makes the process of transactions easier and faster.
Block is a storage data figure that records the transactions in cryptocurrency’s blockchain. The block is closed after the validation of data.
As the name suggests, a blockchain is simply a chain of blocks that store the records of transactions for future reference. With the help of blockchains, any hacking of records is made impossible.
A coin represents a digital store value in a cryptocurrency network or a blockchain. If you take Bitcoin as an example, then it has the same name for the network and the coin.
It is a platform for the exchange of cryptocurrencies. On Coinbase, one can easily buy their desired coins like Ethereum or Bitcoin.
- Cold wallet
Also known as offline wallet or hardware wallet, it simply means a wallet with no internet connection. Paper wallets us considered to be the safest way of storing cryptocurrency.
In cryptocurrency, decentralization is referred to as the transfer of control to a system or network from an individual.
It is a platform based on a blockchain system for transactions.
Whenever any alteration occurs in the rules or protocols of a blockchain, a fork is created.
In a nutshell, it means the act of buying cryptocurrencies and then holding them for future benefits.
- Hot wallet
It is just the opposite of a cold wallet, any wallet that always possesses an internet connection.
- Initial coin offering (ICO)
It is a method of raising funds when a company wishes to create a new app, all or coin.
- Market capitalisation
It is defined as the total sum of a company’s shares stock.
The computer connected to the network of cryptocurrencies system is referred to as a node in cryptocurrency.
- Non-fungible tokens (NFTs)
The non-fungible token is a data storage unit that cannot be interchanged.
- Public key
It is a code developed by a cryptographic system that easily makes transactions between two parties.
- Private key
The connecting link for exchange between the server and its clients. If you are the server, you will have to generate your private key; bitcoin won’t provide it to you.
- Smart contract
It is a contract containing all the details regarding the rules and regulations of cryptocurrency. If the contract is named a “smart legal contract,” then it is a legal government-oriented document.
- Stable coin
When the price of a cryptocurrency is to be fixed, a stable coin is used. It proves to be helpful, especially to early investors, to track the record.
Token defines all that you own. Any cryptocurrency besides Ethereum or bitcoin is termed a token.
- Bitcoin Wallets
The wallet is a storage app that investors or buyers use to record all their cryptocurrency possessions.
So, these were some important crypto terms you needed to get yourself familiar with. Whenever planning to trade in Bitcoins, ensure using blockchain technology for a seamless crypto trading experience. Happy investing!
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