Cryptocurrencies have come to stay and the more you may try to avoid them, the more your curiosity consumes the best part of you to know more. Even if you’re not willing to trade or venture into the crypto space, it is important to understand some terminologies used in the space. Understanding what crypto is, is surely a way to help make a sound decision to either venture into the space, stay or not attempt it.
Below are some terminologies used in crypto trading and the virtual currency space?
Bitcoin is the first and most valued cryptocurrency available in the world at the moment. It was launched on 3rd January 2009. Bitcoin currently sells at —–. Like any virtual currency, Bitcoin has experienced some fluctuations.
Bitcoin cash represents a peer-to-peer market space where an electronic cash system was formed from a fork of the original Bitcoin. Bitcoin Cash is designed to be better optimized for transactions with a lower volatility rate compared to Bitcoin.
An altcoin is any coin that is not Bitcoin. Altcoins can be assumed as alternative coins and falls under any coin from the second-most popular coin, Ethereum, to any of the thousands of coins available in the crypto marketing space.
A Blockchain is basically a digital form of record keeping. It is also the underlying technology behind the existence of cryptocurrencies. A blockchain is created using sequential blocks that build upon one another. This creates a permanent and unchangeable ledger of transactions (or other data).
Cold Wallet/Cold Storage
Cryptocurrencies can be secure by storing the coins completely offline. This process/method of storing your cryptocurrency completely offline is the term Cold wallet/cold storage. Many cold wallets (also called hardware wallets) are physical devices that look similar to a USB drive and can help protect your crypto from hacking and theft.
Digital Gold is a term used by crypto experts sometimes to compare specific cryptocurrencies to real gold. This is because of how cryptocurrencies can store and increase in value. Bitcoin is commonly referred to as digital gold.
Pronounced as ‘Hold’, the term stands for “Hold On for Dear Life”. Though it originated from a user typo on a Bitcoin forum in 2013, the term now refers to a passive investment strategy in which people buy and hold onto cryptocurrency — instead of trading it — in the hopes that it increases in value.
Hot Wallet is a software-based cryptocurrency wallet connected to the Internet. This gives you convenience and quick access to your coin however it is also most susceptible to hacking and cyber-attacks.
Mining is simply a process by which new cryptocurrencies are made available and the log of transactions between users is maintained.
Stablecoin or Digital Fiat
A stablecoin is designed to have a stable value that is relative to traditional currencies such as the dollar.