Crypto Trading Terminologies for beginners

 How do you feel been in a discussion with your friends and you don't understand the f*ck of what is been discussed? 

 You feel neglected, right? That's what happens when you are not acquainted with the various terminologies in the crypto market. You will be left out

 This post is made to aid beginners understand the terminologies in the crypto world/space. Let's go!

1. Altcoin: 

 An altcoin is a digital currency other than Bitcoin. There were more than 1,000 altcoins listed on data source CoinMarketCap at the time of this writing. Another way of describing the term "altcoin" is referring to it as an alternative protocol asset, meaning that it follows a protocol (set of rules) that's different than that of Bitcoin.

2. Fiat Currencies

Fiat currencies are currencies that have value because they are minted by a central bank. Fiat means "by decree," and these currencies have value because some central authority has decreed that they have monetary value. Examples of fiat currencies include the British pound, euro and Japanese yen.

3. Exchanges

Exchanges are basically just marketplaces where traders can make digital currency transactions. If a person wants to buy Bitcoin, going to an exchange is the fastest way to accomplish this objective.

We have different exchanges. Binance, kucoin, kraken coinbase, hotbit, bitget e.t.c

4. FOMO

The term "FOMO" stands for the phrase "fear of missing out." This occurs when investors start buying up a particular asset based on their expectations that it will rise in value. Market participants can easily flock to an asset should that asset experience sharp gains.

Getting caught up in FOMO can be dangerous. More specifically, buying up an asset because it has recently enjoyed some notable upside can cause one to fall victim to market manipulation.

5. FUD

Fear, uncertainty and doubt can be summed up using the term "FUD." The idea behind this is that market participants may spread misleading or inaccurate information in order to cause an asset's price to decline. A trader may want an asset's price to fall so they can either short it successfully or buy in at a lower price and increase their chance of generating a gain.

6. Initial Coin Offering

An initial coin offering (ICO) represents the first time that an organisation offers digital tokens to the public in an effort to raise money. Companies frequently hold these offerings so they can finance projects.

These digital token sales have often been likened to initial public offerings (IPOs), where companies sell more traditional assets such as stocks and bonds in order to raise money.

7. Long/Long Position

Going long, also known as taking a long position, means making a wager that an asset will rise in value. If a trader purchases a digital currency like Bitcoin, for example, they are making a bet that the cryptocurrency will appreciate.

While simply buying digital currency is one example of taking a long position, there are other methods available. For instance, traders can leverage options and futures.

8. Short/Shorting

Shorting an asset, also known as taking a short position, means making a bet that the asset will fall in value. There are several methods that traders can use to short digital currencies, including futures, options and margin trading.

Investors considering this method should keep in mind it involves a lot of risk, especially with cryptocurrencies because of their volatile nature.

9. Mining

Mining is the process for creating new units of a digital currency. For example, the Bitcoin network releases new bitcoins every time a block is mined. In this instance, mining involves confirming transactions and combining them in to blocks.

This verification requires hardware and electricity, and miners are rewarded with digital tokens for contributing these needed resources.

10. Moon/Mooning

When a digital currency moons, that means it rises sharply in value. For example, a crypto trader could talk about how an altcoin is going "to the 

11. POS

POS stands for "proof of stake," which is another method of confirming transactions. The digital currencies that use this approach to verification frequently provide all their digital tokens up front, and miners are selected based on how many units they have (their stake). In these cases, users who confirm transactions, sometimes referred to as "forgers," receive transaction fees for their contributions.

12. Private Key

A private key is a piece of information—presented as a string of numbers and letters—that an investor can use to access their digital currency.

13.  Public Key

A public key is an address where an investor can receive digital currencies. This public key, like the private key, is a combination of numbers and letters.

 14. Pump and Dump

A "pump and dump" is a type of investment scheme where a market participant—or several—work together to inflate the price of an asset so they can sell it when its value is artificially high. This practice may be particularly pervasive when it comes to digital currencies, as traders can easily get together using Telegram groups with the goal of causing specific cryptocurrencies to rise sharply in value.

 14. Rekt

The term "rekt" is crypto trader slang for "wrecked." Basically, it means that a trader lost substantial amounts of money.

15. ROI

ROI is short for "return on investment." Basically, if an investor puts their money in to a digital currency, they are doing so with the hope that they will receive a compelling return

16. Satoshi Nakamoto

Satoshi Nakamoto is the pseudonym for the creator of Bitcoin, and more than one individual has claimed to be Nakamoto. However, none of these claimants have managed to convince the broader cryptocurrency community that they are, in fact, the creator of Bitcoin

17. ATH

"ATH" is an abbreviation of "all-time high." This term can be quite helpful to know for tracking the digital currency markets. These assets are so volatile, so keeping their ATH in mind can prove valuable. A digital currency could potentially hit several local highs before rising to a new all-time high.

18.  Bear/Bearish

"Bears" believe that an asset, for example a digital currency, will decline in value. Another way of putting this is that if a trader thinks a cryptocurrency will depreciate, their sentiment surrounding the digital asset is "bearish." In many situations, traders will make use of this expectation by taking a short position on an asset, meaning that they will make a wager that will pay off should the asset in question fall in value.

19. Blocks

Many digital currencies make use of blocks, which contain transactions that have been confirmed and then combined together.

20 Blockchain

The blockchain, which is a distributed ledger system, consists of a series of blocks. These blocks contain verified transactions. The blockchain was designed to be not only decentralised, but also immutable, meaning that entries could not be erased once placed on this distributed ledger. The idea of the blockchain was first introduced when the Bitcoin white paper was released in late 2008.

21. Bull/Bullish

If a trader believes that an asset will rise in value, he or she is a "bull." When an investor has this optimistic expectation of an asset's future bull, this frame of mind is described as "bullish."

21. Consensus

The network for a digital currency reaches consensus when the network's nodes agree that a transaction took place. This agreement is crucial if the varying network participants (nodes) are to have the same information. In other words, consensus is crucial to distributed ledger systems.

22. Escrow

Escrow refers to a third-party holding financial resources on the behalf of other parties. A third-party would hold funds in escrow when the other entities involved in a transaction may not trust each other.

23.  Whale

The term "whale" is used to describe a trader who makes sizable bets. This term is a good one to know because market participants with the ability to execute very large transactions can potentially manipulate the market—or "make waves in the ocean."

This are kinda the most used terminologies. With the knowledge of this. You won't feel neglected or insecure whenever your friends raise up a crypto discussion.  

Would you like to learn about crypto currency and also how to spot trade the market? Click Here