You’ve probably heard about Bitcoin and other cryptocurrencies; maybe you are considering expanding your investment portfolio. This is exciting – you are taking steps towards the future economy. Before jumping in, we’ll help you with the fundamentals of crypto.
Many jargon and abbreviations get thrown around, making crypto harder to understand. Don’t despair, this blog will go through the most common crypto terms and phrases to feel confident when you kickstart your investing.
An altcoin is a cryptocurrency other than bitcoin. Ethereum and XRP are two of the most widely known altcoins; however, there are currently over 5,000 altcoins. This number continues to grow as digital currencies become more widely accepted as payment methods.
“ATH” is an abbreviation for “all-time high.” This term reflects a coin or token’s highest-ever price. Knowing this information can be useful when trading. If you know a coin’s highest price, you’ll be able to buy when the price dips. If the price then hits its ATH again, or even a new ATH, you’ll likely make a profit.
If a trader believes that an asset will rise in value, they are a “bull.” When an investor has this optimistic expectation of an asset’s future bull, this frame of mind is described as “bullish.”
The blockchain is a distributed ledger system, consisting of a series of blocks containing verified transactions. The blockchain was designed to create decentralized storage and immutability. This means that entries could not be erased once placed on this distributed ledger. This is the foundation for the security and reliability of crypto.
The term “FOMO” stands for “fear of missing out.” When there’s buzz around a coin it can get people excited. People usually don’t want to miss out on what other people are excited about. FOMO can be dangerous because you could spend your money on a hyped-up coin without doing much of to your research – and you should always do your own research!
The term “HODL” stands for “hold on for dear life.” The abbreviation initially came from a misspelling of the word “hold”. Cryptocurrency is notoriously volatile and people will often sell when a price dips in fear of losing everything. However, some people believe that if you HODL for the longterm, you’ll ride the dips and eventually see gains in the future.
KYC stands for “know your customer.” KYC is the verification process that requires companies holding digital tokens to verify the identity of their investors. KYC helps reduce scams in the cryptocurrency space.
An address is a destination where a user sends and receives digital currency, similar to a bank account. These addresses usually include a long series of letters and numbers.
There is still lots to learn about cryptocurrency before you start investing, but you are well on your way!
Check out more CoinField blog posts for tips and tricks.