The topic of cryptocurrencies is a hot topic around the world. Fluctuations in the price of Bitcoin, ether and other digital currencies have brought many people into this industry and even invested in it. To enter and invest in this industry, you need to know its general keywords. Some of these terms are abbreviated and specific to this site. This article provides you an introduction to cryptocurrency terms as well as their meanings and interpretations.
Also know that the cryptocurrency world is a constantly evolving and changing environment. As this ecosystem evolves and becomes more complex, technical terms are used in discussions, and without knowing this information, it is difficult to follow.
Why are cryptocurrency keywords important?
The common meaning of cryptocurrency terms can be verified in several ways. To trade in the digital currency market, you need to have enough information about the market. Given that investing in these currencies involves risks, lack of information and unfamiliarity with digital currency terms increases this risk and creates more errors in analysis and reviews. That is why we have tried to compile the most comprehensive and complete dictionary and terms of digital currencies for you and to provide an accurate and practical definition of them.
1. fiat currencies
Fiat means “order” or “order” and these coins are valuable because a central bank has decided that they have monetary value. Examples of fiat currencies are the British pound, the euro, the US dollar, and the Japanese yen.
2. Market Cap
Market cap means market capitalization. Market capitalization or market volume for Bitcoin means the number of BTC in circulation multiplied by the price of that currency. The term can also be applied to a group of cryptocurrencies.
3. Bull market and bear market
This term is considered one of the most important business terms. Bulls and bears are terms taken from Wall Street. But why are they called cows and bears? One well-known argument is that bulls use their horns when attacking and raise their horns upwards; Thus, the term is used in promotion. People who raise the price with their optimism are called bulls. Bears, on the other hand, pounce on their rivals or prey when they attack them, so the term is used to depreciate and depreciate. The pessimistic people who believe that their equity is going up in price and start selling their equity are called bears.
4. Satoshi Nakamoto
Satoshi Nakamoto is the person or group who designed Bitcoin in 2008. In addition to Bitcoin, Nakamoto also introduced blockchain to the world. The anonymity of Satoshi made Bitcoin mysterious and exciting. After a few years and with the popularity of this digital currency, questions were asked as to who created it. Because of this, many people in various parts of the world claim to be the real Satoshi Nakamoto.
Participation is on a network that uses a proof-of-stake algorithm. In these networks, instead of using special hardware to confirm transactions and build blocks, human insertion is used. With their staking coins or tokens, people participate in the network and generate new blocks and verify transactions.
Each network has its own staking rules; For example, number of coins, lock time of coins, number of rewards, etc. Staking is also possible in most wallets. In fact, some POS do not support staking of consensus-based cryptocurrencies or subsets thereof.
6. Long/Short Position
A trader can open a long position; It means buying cryptocurrency at a certain price. This trader sells after the price rises. A short position is opened when the trader assesses that the price of the cryptocurrency is falling. The trader opens this position at the highest price and sells it when the price decreases.
7. White paper
A white paper refers to the content of an article that contains information that is very useful for business, and the purpose of writing it is to understand a particular issue and provide information that helps in making the right decision about an issue or making a purchase decision. A complex and expensive service becomes simpler to acquire a product or service. The points mentioned in the cryptocurrency white paper usually include the purpose of the project, timing of the project, start time and date of fundraising, team members and their experience, roadmaps and how to implement them. Plan.
8. Pump and dump
Activity of many different groups on social media causes the price of some digital currencies to increase over a short period of time and temporarily, which is called pumping, and after a short period of time, the digital currency will be at or even higher than the previous price. At the very least that’s called a dump.
9. Public and private key
The term public and private key is used for the address and password of a digital wallet. The use of public and private keys as a security measure plays an important role in ensuring the security of transactions in the blockchain network. To put it simply, the public key is your card number and the private key is the password to use.
The term whale is used very often in digital currency. Whales are great investors in the market. In addition, a whale is an investment that strongly increases or decreases the price by buying or selling a large amount of market value. Given the overall market value of digital currency assets relative to other sectors, whale movements in this sector can provide important price signals to alert investors.
11. Peer to Peer
In a peer-to-peer network, two or more computers or people communicate with each other without the presence of a third party as an intermediary.
12. Mining Pool
A mining pool is where mining communities pool the processing power of their machines. Also increases your chances of profit in mining. Because the competition to solve complex mathematical problems on the Bitcoin network is very high. Miners pool their processing power into a mining pool.
13. Proof of work
The process by which miners work on solving a mathematical problem on the network is called proof of work. Proof of work is a method of verifying transactions on decentralized networks called mining.
14. Proof of Stake
Proof of Stake is an alternative method of verifying transactions in decentralized networks that does not require hardware or power consumption. In a proof-of-stake network, anyone who wants to participate can verify transactions.
Another common term in digital currency is stablecoin. Despite the many fluctuations that exist in the digital currency market, the value of this type of cryptocurrency is always stable. Typically, a government currency, gold, or other digital currency is used to back this type of digital currency. The tether currency is one of the most useful stablecoins in the digital currency market with a value equal to one dollar.
Abbreviation for “all-time high” is an all-time high price. This term is used when the price of a cryptocurrency registers a new high and makes a new ceiling.
This term stands for All Time Low and is the opposite of ATH. The term digital currency is used when the price of the desired cryptocurrency reaches the lowest number in its history.
18. Transaction ID
A series of letters and numbers that allow tracking the status and outcome of a transaction on the network. The transaction ID is also referred to as the transaction hash or TXID.
Liquidity is a measure of how easily one asset can be exchanged for another, especially cash. Cash or its equivalent can be considered the most liquid asset because it can be converted into other things very quickly.
This authentication process, which is often referred to as “Know Your Customer” or KYC on foreign platforms, is a way to find out the identity of exchange users and online trading platforms.