As you begin trading, we have put together a list of fundamental cryptocurrency terms every trader should understand. How many of them do you know?
An encrypted and decentralised digital asset based on blockchain technology. Over 5,000 cryptocurrencies are circulating globally today. Cryptocurrencies can be traded for goods and services or can be invested in like other assets.
A collection of bitcoin transactions that have not yet been processed. A Block is one portion of the blockchain that records all of the transactions. Blocks can be compared to a ledger page with the entire ledger being the blockchain.
The process of solving complex mathematical computations to earn block rewards, where blocks are added to a blockchain which verifies transactions.
Depending on the form of storage, a wallet can be either online software that stores all the secret information about access to a user’s digital assets and facilitates transactions, or an offline physical medium that has the keys for a cryptocurrency wallet.
Generally, all cryptocurrencies other than bitcoin. There are over 5,000 altcoins, which all have their own rules. They try to follow in the footsteps of Bitcoin’s fame, but by changing their features a little bit in order to appeal to different customers.
An exchange is an organized marketplace where financial instruments are traded. Exchanges provide liquidity to traders looking to buy and sell their financial products. Exchanges are secondary markets where traders are buying and selling among themselves. Exchanges usually specialize in their asset class (stocks, bonds, commodities, or cryptocurrencies), but offer a variety of trading options and services to their traders (futures, options, and trading data).
A type of cryptocurrency that is backed by a reserve asset to attempt to provide price stability. They can be pegged to a currency like the U.S. dollar or to a commodity's price such as gold and there are a few different types: fiat-collateralized stablecoins, crypto- collateralized stablecoins and non-collateralized stablecoins.
Participating in a Proof-of-Stake (PoS) consensus system and locking your tokens in a vault to earn rewards. By staking enough tokens of a given coin, an individual can be eligible to become a validator for that network.
A cryptocurrency token that is both indivisible and unique. NFTs can be used to represent unique assets, and they are very useful for proving scarcity. The intrinsic value of a NFT is not interchangeable with that of another NFT; in other words, one NFT cannot serve as a substitute for another NFT (e.g., an NFT representing a very rare baseball card could not serve as a substitute for another NFT representing the Mona Lisa)
In financial markets, the buy and sell orders placed are called bids and asks. While bids are offers in a base currency for units of the asset, asks are selling prices that holders of the trading asset are willing to sell it for. Ask Price is the minimum price that a holder of an asset will be willing to sell their asset for.
Are there any other terms you would like us to help us to decipher? Our crypto experts can help you
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