All The Cryptocurrency Terms You Need To Know

cryptocurrency terms in Nigeria

Starting out with cryptocurrency can be confusing and overwhelming. But not to worry, we have compiled a list of all the cryptocurrency terms you need to know.

cryptocurrency terms

Everyone who ventures into the world of cryptocurrency will most definitely find it difficult to understand the sphere which often times retard progress.

This list of cryptocurrency terms you must know is a detailed one highlighting choice and somewhat ambiguous words used in the crypto sphere.

General Trading Terms

Exchange:

An exchange is a website or app that allows users to buy and sell cryptocurrency. It is a digital marketplace for the purchase and sale of crypto-currencies.

For Example, a bitcoin exchange is a marketplace where people can buy and sell bitcoins. Most exchange allows transactions in all kinds of crypto-currencies.

Whale:

You know the whale fish right? In crypto-currency trading, a whale is someone who owns an outrageous amount of cryptocurrency.

Limit Buy/ Limit Sell/ Limit Order:

This is an order placed by traders to buy or sell a cryptocurrency when its price reaches a particular amount. These orders are what are bought and sold against when traders place market orders.

FIAT

FIAT is a currency established as a legal tender (money) by virtue of a governmental decree. It refers to your local currency such as Euros, Pounds, Naira, Yen e.t.c

Market Buy/ Market Sell/ Market Order:

This is a simple purchase or sale on an exchange at the current price (remember what an exchange means right?). A market buy purchases the cheapest Ethereum (ETH) available on the order book

On the otherhand, market sell fills the most expensive buy order on the books.

Buy Wall/ Sell Wall:

This is a graphical representation or better still chart showing the limit buy and limit sell points. The chart appears in form of walls. Below is a screenshot of the buy wall/sell wall

cryptocurrency-terms-buywall-sellwall

Margin Trading:

Margin trading refers to when a trader decides to increase his or her return profit. They do so by buying more stocks.

Going Long:

This refers to a margin trade that yields profit when the prices increases.

Going Short:

This refers to a margin trade that yields profit when the prices decreases.

Altcoin:

Altcoin is the general name for any cryptocurrency apart from Bitcoin. Some persons pair Ethereum together with Bitcoin referring to other coins outside this two as Altcoins.

ATH:

This is an acronym which stands for All Time High.

Shilling/Pumping:

This is the art of advertising another cryptocurrency. Some persons can make funny assertions about coins in a bid to convince people to use it. That is shilling.

ICO:

ICO is an acronym for Initial Coin Offering. It refers to crowdfunding on the Ethereum platform. It allows newbies to offer tokens in exchange for ether.

Arbitrage:

This is taking advantage of the difference in the price of a coin on two different exchange. For example the price of ETH is US exchange is different from that of Korean exchange.

FOMO:

FOMO means Fear Of Missing Out. This happens when a trader is compelled to purchase a coin when its price begins to appreciate suddenly so he doesn’t miss out on the profit returns.

Stable Coin:

A stable coin is a cryptocurrency which has a low volatility rate. Such a coin can be used to trade with the overall market.

FUD:

FUD means Fear, Uncertainty and Doubt. This is when someone shares negative thoughts in a bid to making the price of a coin drop.

FUDster:

A FUDster is anyone who is spreading FUD.

Tokens:

Tokens refers to the ‘currency’ of projects built on the ethereum network that have raised money via issuing their own tokens. Examples:
GNT – Golem
REP – Augur
BAT – Basic Attention Token
ICN – Iconomi

Pump And Dump:

The recurring cycle of an altcoin getting a ton of attention, leading to a fast price increase, and then of course followed by a huge crash.

Bagholder:

Someone still holding an altcoin after a pump and dump crash. It also refers to someone holding a coin that is sinking in value with few future prospects.

Market Cap:

The total value held in a crypto-currency. It is calculated by multiplying the total supply of coins by the current price of an individual unit. This site shows a great run-down of each coin’s market cap: http://coincap.io/

ROI:

Return on Investment. The percentage of how much money has been made compared to an initial investment. (i.e., 100% ROI means someone doubled their money).

TA:

Trend Analysis or Technical Analysis. Refers to the process of examining current charts in order to predict which way the market will move next.

MACD:

Moving Average Convergence Divergence. A trend indicator that shows the relationship between two moving averages of prices.

Bollinger Band:

This is the margin around the price of a crypto that helps indicate when a coin is overbought or oversold.

General Cryptocurrency Terms

Blockchain:

Blockchains are distributed ledgers, secured by cryptography. They are essentially public databases that everyone can access and read, but the data can only be updated by the data owners. Get more information on https://www.investopedia.com/terms/b/blockchain.asp

Node:

A node is any computer that has a copy of the blockchain and is working to maintain it.

Mining:

The process of trying to ‘solve’ the next block. It requires obscene amounts of computer processing power to do effectively, but is rewarded with ether.

Mining Rig:

A computer especially designed for processing proof-of-work blockchains, like Ethereum. They often consist of multiple high-end graphic processors (GPUs) to maximize their processing power.

Fork:

A situation where a blockchain splits into two separate chains. Forks generally happen in the crypto-world when new ‘governance rules’ are built into the blockchain’s code.

PoW:

PoW is an acronym for Proof-of-work. The current consensus algorithm used by Ethereum.

PoS:

PoS means Proof-of-stake. Ethereum plans to use it as an algorithm for future consensus . Instead of mining in its current form, people that own ETH will be able to ‘lock up’ their ether for a short amount of time in order to ‘vote’ and generate network consensus. Stakeholders will be rewarded when they do so.

Sharding:

Sharding is a scaling solution for blockchains. Typically, every node in a blockchain network houses a complete copy of the blockchain. Sharding is a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds.

Software Wallet:

A software wallet is a storage for cryptocurrency that exists only as software files on a computer. They can be generated for free from a variety of sources.

Hardware Wallet:

A hardware wallet is a device that can securely store cryptocurrency. They are often regarded as the most secure way to hold cryptocurrency. Ledger Nano S and Trezor are two of the most popular hardware wallets.

ALSO READ: Best Bitcoin Wallet in Nigeria

Cold Storage:

The process of moving cryptocurrency ‘offline’, as a way of safekeeping your cryptocurrency from hacking. The most common methods of cold storage includes:

  • Using a hardware wallet.
  • Moving the files of a software wallet onto a USB drive and storing it somewhere safe.
  • Printing out the QR code of a software wallet and storing it somewhere safe, such as a safety deposit box.

That is it on cryptocurrency terms you need to know. With this list of cryptocurrency terms I am optimistic your journey in the world of cryptocurrency would not be mystified.

You May Need To Read Ethereum Related Terms. Click The Link Below:

Ethereum Related Terms

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