Novices to the cryptocurrency universe might be perplexed by the trading jargon – What is a Whale? Why HODL? But don’t panic. There’s a simple explanation for everything.
1. Altcoin: If you keep learning about “altcoin” but can’t get a trading value, that’s because it doesn’t exist. The altcoin is just a blend word originated from “alternative” and “coin” and referred to any digital currency that isn’t bitcoin.
2. Bitcoin: The significant one was founded by the mysterious “Satoshi Nakamoto” in 2008. Even now, notwithstanding the rise of an ample number of altcoins, however, the money hogs the headlines.
3. Bitcoin cash: In August 2017, bitcoin encountered its first “fork” and divided into bitcoin and bitcoin cash – they are now two completely separate currencies.
4. Block and blockchain: A block is one combination of enduringly recorded transaction data. After it is created, it goes into a blockchain, which serves as a permanent database of all prior data blocks. A new block is then created for further knowledge to be stored. Each block also includes a mathematical puzzle with a different answer, and new partnerships cannot be submitted to the blockchain without information. This solution is what cryptocurrency “miners” are hunting for.
5. Confirmation: On average, a new block is appended to the blockchain by mining every 10 minutes. This block holds any recent transactions, a method known as confirmation. Some merchants will need many guarantees from several blocks, depending on how big the transaction is.
6. Fiat money: Fiat currency is an authorised tender whose value is supported by the government that published it, like the USD or UK pound.
7. Fork: A fork creates alternative versions of the blockchain, and then the split blockchain operates simultaneously on various parts of the network. A “hard fork” executes prior invalid transactions valid, and vice versa; a “soft fork” executes previously legitimate transactions invalid, but not the inverse.
8. FUD: They are used mainly on cryptocurrency forums as a put-down for naysayers who are “spreading FUD again”. It is an acronym for “fear, uncertainty and doubt”.
9. Hardware wallet: A physical device is created to store your cryptocurrency safely off the computer, really like a very advanced USB stick.
10. Hashing: The method you mine bitcoin or similar cryptocurrency by solving the mathematical problem using cryptographic hash functions.
11. HODL: Formerly a typo on a cryptocurrency forum, when someone typed HODL instead of HOLD. Translated as “Hold On for Dear Life”, it’s grown the battle cry of diehard cryptocurrency investors who consider that the investment will come beneficial one day.
12. ICO: A favourite and usually uncontrolled way with an acronym for Initial Coin Offering for increasing cash for new cryptocurrency investments. A percentage of the fresh currency is exchanged to backers as blockchain “tokens” in return for more well-established cryptocurrencies.
13. Mining: Winning new bitcoins includes compiling everyday transactions into blocks and determining a computationally tricky puzzle through hashing.
14. Mining rig: A computer is created explicitly for mining cryptocurrencies.
15. Node: Any network connected to the bitcoin network is called a node. These nodes validate and relay events while receiving a copy of the complete blockchain.
16. Public key / private key: A cryptographic key that enables a user to obtain cryptocurrencies into an account. The public key is presented to everyone through a publicly accessible directory, and the private key continues confidential to its owner. Because the vital combination is mathematically linked, whatever is encrypted with a public key may only be decrypted by its corresponding private key.
17. Sats: A minuscule fraction of a bitcoin is termed a “satoshi” or “sat”. It serves one hundred-millionth of a bitcoin and is titled after Satoshi Nakamoto.
18. Software Wallet: A folder is where persons “store” their bitcoins or another cryptocurrency – or, to be more specific, where you save the private keys used to locate your public bitcoin address and sign for transactions. A sequence of the recipient’s public key and your secret key is what executes a bitcoin transaction. A software wallet reserves these on a third-party server, or you can elect to store them in a desktop wallet downloaded onto the computer. The option is a specialist hardware wallet.
19. Token: When a new cryptocurrency is generated through an ICO, funders are given tickets for the new currency in the account of their liquid cash or liquid cryptocurrency. These tokens probably become currency units if – and when – the new currency targets are met and it launches.
20. Whale: As the name suggests, whales are the most prominent swimmers in the cryptocurrency pond. Cryptocurrency traders and speculators use this term to describe the players who hold vast amounts of bitcoin. Hence, it’s no surprise that Satoshi Nakamoto is the enormous whale of all. These whales can impact markets significantly when they buy or sell, so other traders watch for signs of their movements.
Digital money is getting decoded as cryptocurrencies are no longer the inaccessible trading grounds of tech-insiders, offering real investment possibilities to real people. Bitcoin has grown one of the world’s best-performing assets over the past few years. However, even the most potent return creating asset has its ebbs and flows. Over the past decade, Bitcoin observed immense extension by over a million opportunities in power and reputation.