Friday, March 1

Cryptocurrency terms that you should know before investing

Business blog

Bitcoin investing presents some of the exclusive terms being widely used in the crypto industry:

Altcoin: This term is a perfect blend of two independent terms “Alternative” & “Coin”. It basically refers to the idea that all the cryptocurrencies other than Bitcoin will come under the purview of Altcoins. You can also call them “Non-bitcoin” Cryptocurrencies. There has been a massive surge in the altcoins right after Bitcoin became a household name. 

It paved the way for other cryptocurrencies which currently cater to millions of users every day. This is vindicated by the fact the overall proliferation in the volume of cryptocurrency transactions. Today, millions of people use altcoins more than bitcoins and receive significant returns from them.

Address: Basically it is a string or collection of characters and it serves as a secured place that can be easily used to send or receive cryptocurrency. Moreover, they are also used to store such digital assets. It is to be noted that every crypto has its own unique address that only the owners have access to.

Bitcoin Maximalist: This term is implied for a person who is a massive proponent of Bitcoin and doesn’t believe in any other cryptocurrency available. He/she believes that bitcoin has the right potential to give them the kind of returns that they usually expect. They are also of the view that bitcoin will have a significant impact in the future and far more than it currently has. It is the sole digital asset that has been able to withstand unfavourable criticism & allegations that come from all directions.

Blockchain: Widely renowned as a digital ledger that records all the transactions in an end-to-end encrypted manner, Blockchain has been incorporated in millions of activities performed by companies worldwide. They provide impenetrable security to the users and all the recorded transactions are verified as and when they occur. The essential information is recorded electronically which makes operating in the digital format a lot easier.

Cryptocurrency exchanges: These are the predominant online platforms that make it possible for cryptocurrencies to be traded successfully. You can easily trade your cryptocurrency with any other digital asset that you want. Crypto exchanges also provide a host of services to the users that make it easier for all online users to seamlessly operate on a single platform.

The market value of the asset is the prime indicator that is considered during the exchange of such digital assets/cryptocurrencies. You have the option to easily buy or sell and trade your cryptocurrency on the established crypto exchanges. However, you must conduct your personal research while choosing a particular crypto exchange to work or trade on. Each crypto exchange has its own set of exclusive services that are availed of by all kinds of customers scattered across the internet.

DeFi: it stands for decentralized finance and it is a blockchain-based apparatus that provides a significant level of freedom to operate to online users. It is a form of the financial ecosystem that is entirely based on blockchain. Hence, it implies that there is no central authority in this space that regulates the flow & circulation of transactions. 

Furthermore, you no longer have to rely on any banks or brokerage exchanges in this space and you have the option to operate as an independent user. Neither you will be liable to conform to the regulations & protocols that such financial institutions impose on customers.

Fork: This phenomenon occurs when a network based on blockchain technology splits into two and develop their own set of codes & governing principles. It will either be a hard fork or a soft fork. A hard fork implies that there will be more than one chain that is brand new. On the other hand, a soft fork implies that only 1 blockchain stays active & remains operational.

Hodl: No, it is not any misspelling. It is just slang to refer to “Hold” which is profusely used in the crypto industry. Some might also refer it to as “Hold on for dear life”. It is used when crypto is either about to topple down or stumble. Investors help each other “Hodl” so that they don’t sell their token.

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