Before starting your investing journey, it is essential to know about a few crypto terms. And this is to make your investment journey a lot easy.
- Bitcoin: Bitcoin is the first and most valuable crypto. It is a decentralized currency based on blockchain technology.
- Altcoin: Altcoin is a term that refers to any crypto other than Bitcoin. From the second most popular crypto, Ethereum to any other crypto that costs even a penny, is an Altcoin.
- Bitcoin Cash: Bitcoin Cash is a fork of the original Bitcoin. The purpose of creating Bitcoin cash was to counter the high volatility of Bitcoin and provide better-optimized transactions.
- Blockchain: Blockchain is a technology that you can use to create a transparent ledger of a system. It is a system of recording information in a way that is impossible to cheat or hack. A blockchain is a form of database that stores all the crypto transactions.
- Cold wallet/storage: A cold wallet is an offline or hardware wallet. Cold storage is the safest way to hold your cryptos. And the only way to access your crypto is by using the private key.
- Cryptocurrency: It is a digital and decentralized form of payment. There is no involvement of intermediaries like banks in carrying out any transaction. It is a form of digital currency which people can buy, sell, or trade.
- Decentralization: Decentralization works on distributing power from a central authority. Blockchains are decentralized, and they require approval from a majority of their users to operate and make any decision, rather than seeking a central authority
- Gas: It refers to the fee that has to be paid to the miners on every successful transaction on the Ethereum blockchain platform.
- HODL: HODL is a popular acronym among crypto enthusiasts that stands for “hold on for dear life”. It refers to the long-term investing approach to beat the daily market fluctuation to get the best returns.
- Mining: Mining is the process of solving complex mathematical equations to generate new crypto coins.
- ICO: ICO stands for Initial Coin Offering, a way to raise funds for a new crypto project.
There you have it, a total of 11 basic terms that you need to know before you start investing.