20 Cryptocurrency Terms and Meanings For Beginners
With so much going on in the world, it’s easy to wonder if cryptocurrency feels like too steep a learning curve. A lot of the confusion with cryptocurrency is most likely due to the use of words that many people have never heard. This intimidation leads to cryptocurrency sounding like a different language to beginners knowing that this is new financial territory to them.
A good place to start would be to get acquainted with some of the basic terminology involved, if not all, at the very beginning. You may have heard some of these terms before; but when used in the crypto context, the meaning and value it carries might leave you so surprised.
While there are hundreds of associated cryptocurrency terms which can’t all be comprehended at once, bear in mind the fact that learning even a few of these terms can serve as a guide to your cryptocurrency world.
Here are 20 basic cryptocurrency terms and meanings for you to get a better understanding:
A type of currency that is digital and decentralized. It can be used to buy and sell things, or as a long-term store of value.
Cryptocurrency Layman Terms: Decentralization
Decentralization is the act of distributing power away from a central point. Blockchains are traditionally decentralized because they require approval from all users to operate and make changes, rather than a central authority such as the banking system of a country.
This is a system of recording information in a way that makes it difficult or impossible to change or cheat the system.
A blockchain is a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains several transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.
Cryptocurrency Terms: Airdrop
An Airdrop refers to a way of distributing cryptocurrency to the public, via the fact that they own certain other tokens or wallets on a particular blockchain. This is usually done for marketing purposes to reward the holding of other tokens or induce them to become a participant in the blockchain network.
Cryptocurrency Terms and Meanings: Altcoins
Altcoin stands for Alternative Coin, is used to describe any cryptocurrency that is not Bitcoin i.e “an alternative digital currency”.
Cryptocurrency Terms: Bear
A person who believes that prices in a crypto market will decline over an extended period. A bear market describes a market that is experiencing significant downward pressure over a sustained period of time.
Cryptocurrency Terms and Meanings: Fiat
Fiat currency is “legal tender” backed by a central government of a country.
An acronym that stands for “Fear of Missing Out”. This is a term that is used to express the anxiety you could feel if you don’t act quickly when making trading decisions. The idea behind it is that any delay could cause you to miss out on a potential opportunity.
Cryptocurrency Terms and Meanings: Fundamental Analysis
A method in which you research the underlying value of a crypto asset by looking at the technology, team, growth prospects, and other possible indicators.
Cryptocurrency Terms: Futures
A futures contract is a standardized legal agreement to buy or sell a particular cryptocurrency at a predetermined price at a specified time in the future.
Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference. E.g Gold and Countries’ currency.
Cryptocurrency Layman Terms: Wallet
A place to store your cryptocurrency holdings digitally. Crypto wallets keep your private keys – the passwords that give you access to your cryptocurrencies making them safe and accessible.
Cryptocurrency Terms and Meanings: Mining
Mining means gaining cryptocurrencies by solving cryptographic equations through the use of computers.
Gas fees are payments that a user is required to pay to validate transactions on the Ethereum blockchain.
Cryptocurrency Terms and Meanings: Market Capitalization
The total capitalization of a cryptocurrency’s price.
Cryptocurrency Layman Terms: Peer-to-Peer
Peer-to-peer refers to the direct exchange of cryptocurrency, between individual parties without the involvement of a third party.
This is a document from a cryptocurrency project that entails technical information about its concept, and a guide on how it plans to grow and succeed.
Cryptocurrency Layman Terms: Address
A place where cryptocurrency can be sent to and from, in the form of strings of letters and numbers. It is a unique identifier that serves as a virtual location for cryptocurrency transfers.
Cryptocurrency Terms and Meanings: Bull
A person that is confident that the market prices will increase. A bull market or a bull run is described as a market that is experiencing significant upward pressure over a sustained period of time.
NFTs(short term) are unique digital tokens that serve as proof of ownership of an asset, and cannot be replicated.
NFTs use blockchain technology, which acts as a digital record of all transactions related to the NFT on a vast network of computers. NFTs are collectible digital assets that hold value, just like how physical art holds value, so do NFTs.