Are you feeling lost with too many buzzwords and technical terms in the crypto space? Well, you are not alone in this. Coming into the crypto space as a newbie, you are likely to come across some strange words when trying to learn about crypto or navigate your way. Some of these words could include NFTs, HODL, Mining, and so on.
In this guide, we will be explaining some of these terms so you can become conversant with them and also learn about the dynamic changes that come with some of this crypto terminology. Also, if you want to find more concise and clear explanations for every term used in crypto space, you can find it on Crypto Wiki.
Now, Let us dive into learning the language of the future.
1. HODL
HODL in crypto means “Hold On for Dear Life.”
Although it looks like a funny word, it is one of the most widely used terms among crypto traders and refers to holding on to or not selling your digital assets amidst a price fall in the market.
This strategy is often used by true believers, even when the market becomes volatile or crashes.
However, HODL can signify two possible outcomes when it comes to cryptocurrencies:
The definition of HODL may refer to a certain class of cryptocurrency, a community-driven coin that runs on the Binance Smart Chain.
On the other side, If you buy a Bitcoin or other types of cryptocurrency and there is price instability, the idea is to “Hold on for Dear Life” instead of selling off the cryptocurrencies in a panic.
2. FUD
This acronym means “Fear, uncertainty, and Doubt.”
It is often used when investors or crypto-critics share negative information about a certain cryptocurrency, DeFi projects or a crypto investment.
FUD can come in the form of news, rumors, exaggerated risk claims, or misinformation about a crypto or blockchain project.
As a newbie, FUD in the market is one of the factors that leads to investors hurriedly selling off their assets before they mature.
Examples of FUD scenarios are:
- The famous Bitcoin will die statement by Nouriel Roubini or Peter Schiff
- China and many others ban cryptocurrencies.
- News on cryptocurrency regulations.
- Elon Musk is giving away Bitcoins and Ethereum
3. Altcoin
While Bitcoin (BTC) is the first cryptocurrency, Altcoins are alternatives to this digital currency.
It is a combination of two different words “Alternative” and “coin.” These coins are currencies that surfaced with the introduction of second and third-generation blockchains.
Some of these coins include Litecoin, Ethereum, Dogecoin, Solana, and so on.
4. Blockchain
Blockchain technology is a digital ledger that aims to provide a secure and transparent way to store information recorded across a global network of computers (also known as Nodes). This information could include transaction details, credentials, standard data, etc.
Blockchain technology is transparent, secure, and immutable. Also, it helps the community make the decentralisation dream come true.
For instance, unlike traditional banks that use a centralized system, blockchain is independent, and its pieces of information cannot be altered.
5. Digital Wallet or Crypto Wallet
A cryptocurrency wallet, often referred to as a digital wallet or crypto wallet, is a software or hardware tool that allows individuals to store, manage, and interact with their cryptocurrencies. These wallets securely store cryptographic keys (private and public keys) that are necessary for users to access and control their digital assets on a blockchain network.
These wallets can do more than save money, they can also be used to send, receive, or spend crypto assets.
For this to work, the wallet issues addresses that are used to direct transactions.
There are two types of crypto wallets: Cold wallets and Hot Wallets.
6. Mining
Somehow, you must have heard about mining in the crypto space. Basically, it is a process whereby new cryptocurrencies are minted by solving complex math problems.
Mining is done to validate transactions on the blockchain to prevent fraud or add new information, which is called a block, to the blockchain. In this process, new units of cryptocurrencies such as Bitcoin or Ethereum are created.
The purpose of this is basically to maintain the integrity of the network and secure it.
7. ICO
With the advent of cryptocurrency, there have been many start-up crypto projects and organizations. However, many of these projects engage in fundraising from the public.
This process is called the Initial Coin Offering (ICO).
The ICO is a way by which cryptocurrency projects are able to raise money from the public by selling digital tokens in exchange for funding.
The ICO works by setting a date and releasing a whitepaper that contains information about the token, the goals of the project, and how the funds raised will be used.
During the event, investors then buy the token with other known cryptocurrencies like Bitcoin and Ethereum.
8. NFT
Imagine you are collecting art or trading cards, and each of these cards is unique and has its own value.
NFTs (non-fungible tokens) are digital versions of these unique cards, but they are online and operate on the blockchain network.
These NFTs can come in the form of music, art, drawings, or even AI. They can be bought on the NFT marketplace, and because they have a unique identification, they cannot be replicated.
9. Decentralization
If you have been following, earlier we talked about blockchain as a decentralized platform.
Decentralization implies that the entire network is free from centralized control, as is the case with organizations such as banks. Instead, it is operated by many computer networks around the world.
Thus, it is the idea that explains the flow of information across different routes, rather than concentrating on a single entity.
10. Smart Contracts
In order to autonomously carry out, control, or verify operations and events in accordance with the conditions of a contract or agreement, a smart contract is an electronic program or transaction protocol.
With their ability to enable safe, open, and secure digital transactions, smart contracts are an innovative technology that has the capacity to revolutionize numerous industries.
11. Technical Analysis
Technical analysis in cryptocurrency involves the strategic process of examining historical price charts and market data to determine the future price prediction of a coin or blockchain project.
Traders use indicators such as average, volatility, indicators, candlestick charts, and a lot more to identify these trends.
Therefore, by combining all these strategies, you will be able to make informed decisions about trading.
12. Fundamental Analysis
A fundamental analysis is carried out to examine a cryptocurrency network so as to determine its value.
Look at it as examining a crypto or blockchain project for real-world use, user metrics, monetary policies, the size of the community, engagement level, and transparency.
As a newbie, before buying into any blockchain project, it is important to do extensive research to be sure of data not visible in price data alone.
Also Read: Fundamental Analysis in the World of Cryptocurrencies
13. Crypto ETFs
In the world of virtual currencies, an ETF, or Exchange-Traded Fund, is an investment vehicle that enables traders to obtain a position in digital coins without personally owning the digital assets.
Similar to standard stock index ETFs that comprise a range of stocks, Crypto ETFs are investment portfolios holding various cryptocurrenc
Traders can purchase shares in the ETF, which indicate possession of the actual mix of digital currencies, as an alternative to buying and handling specific digital assets like Bitcoin or Ethereum.
14. Minting
Minting is the process or action of creating new tokens or NFTs. here do not get confused between minting and mining as both are different terms. While Minting is the one time process, mining is continuous process.
Final Thought
Crypto’s world still in development phase, many other terms are likely to come to light. While there are still many other terminologies that apply in the crypto world, these few were once frequently used by investors and traders.
It is important to have a good idea of these terms so as to be well informed about things that unfold in the cryptocurrency world.
Be sure to read them over again to be sure of what they mean and how interrelated they can be. With the crypto
