Investing in cryptocurrency comes with a lot of risks but can be profitable too. However, before using the live crypto tracker for investing, it is essential to know the necessary crypto lingo. Why? Well, there is a long list of terminologies that dominate the entire land of crypto. And if you want to become a regular investor with good returns, you need to decipher all without difficulty.
Confused? Do not worry, as there is a long list of jargon to help you dodge the common cryptocurrency mistakes:
The first term on this list of crypto lingo is an amalgamation of “alternative” and “coin.” It isn’t challenging to work to understand as means alternative to bitcoin. So, now you know that “Altcoin” signifies any other crypto than the original one itself, the bitcoin.
It is one of those crypto buzzwords that you must know about as it is the digital ledger consisting of all cryptocurrency transactions. These transactions consist of “blocks,” which proceed to create a new one when they reach the capacity. Some might have limited blocks by designs, while others can even have infinite market caps.
Decentralized apps or dApps is another term that you must know about cryptocurrency. These are built for real-world uses and are open-source apps that are present on the blockchain. The mother of dApps is Ethereum. Remember that dApps have certain aspects in common:
- Have protocols like cryptographic algorithm
6. Cryptocurrency Exchange
Understanding cryptocurrency exchanges is essential. Just like regular stock exchanges, you get to trade cryptocurrencies here. But unlike the traditional offline world, this market is online and remains available 24*7.
Restrictions or limits on the number of cryptocurrency trades made are not very common. However, when the prices fluctuate during turbulent trading hours, some brokers limit the depositing funds.
Most trading platforms do not set limits or restrictions on the number of their users can make in a day. However, when cryptocurrency prices are moving up or down very quickly on turbulent trading days, some brokers might put a short-term halt on users depositing funds on their platforms.
6. Digital Currency
Well, if you think this one is just cryptocurrency itself, you are wrong. It is more about fiat currency that you might find in many countries like China and the US.
It depends on trust, and users might have to rely on the different institutions which carry out the transactions. But in the case of crypto, it is entirely trust-less. That means you get to verify the trades as well as records with real-time data.
A fork refers to the split within the blockchain, creating two different blockchains. It can happen due to disagreement between two developers like that happened with bitcoin in 2017, resulting in bitcoin cash and bitcoin.
Shorting in cryptocurrency land refers to how you place bets on the prices going down.
Initial coin offering or ICO is like IPO or initial public offering. It is where the new cryptos are sold to different investors for the first time.
10. Margin Trading
You might come across something like margin trading on any live crypto tracker available online. What does it exactly mean? It means that the investors borrow money to amplify their bets on select cryptocurrencies. So, margin trading can also worsen the losses if the trade doesn’t go according to your way. Therefore, make sure to be very careful while placing such bets in the future.
The list of crypto terminologies doesn’t end here. But these are some of the essential terms that you must know before making your investments for the first time. Apart from these, learn a little more about fiat currency, cloud mining, bull, and bear markets, sell orders, etc.
Remember that the learning doesn’t stop here. Instead, the trading world can be your winning place only if you continue to learn from your daily experiences. So, keep trading, stay updated, and never stop learning.
Peter Dong is a professional writer and blogger.