The crypto industry is fraught with a variety of words in this niche. A new market player is immersed in a yet unknown environment. When they start exploring the stuff, things get more complicated. You can often run across terms in articles that are simply difficult for newcomers to understand. Most of these terms were coined right in the crypto industry, so even an experienced investor who came from the traditional market may not grasp all of them. We will cover the most popular terms in this article and explain what they mean.
Definition
Terminology is necessary to simplify complex word combinations. It’s far easier to fit everything into one succinct word. Moreover, terms can be an abbreviation of a larger word, for example: cryptocurrency → crypto. Hardly anyone needs further explanation of what the terminology was invented for. It is used in a great variety of fields and in daily life.
Cryptocurrency: terms and abbreviations
The vocabulary relating to digital assets is constantly being updated and expanded. Below we will give examples of the most common terms.
- Fiat (fiat currency). Fiat currency is the money we are all familiar with: dollars, euros, rubles, etc.
- Satoshi. This is a small unit of a bitcoin – 0.00000001. The term comes from the name or nickname of the person (or group of people) who invented bitcoin called Satoshi Nakamoto.
- Altcoin. It is basically any cryptocurrency except bitcoin. Roughly speaking, this is an alternative coin.
- Ethereum. It is the second most marketable and popular cryptocurrency.
- Stablecoin. Stablecoins unite the worlds of cryptocurrency and fiat because they are typically pegged to the prices of reserve assets such as the dollar or gold.
Trading terms
Trading involves buying and selling shares on the stock exchange. Traders are active not only in the crypto market, but also in the traditional one. It requires your self-study of the market and making deals. Thus, the person who does this is called a trader.
The most frequently used terms on crypto exchanges:
- ICO (Initial Coin Offering). This is a sale of released cryptocurrency before listing on the exchange.
- White Paper. It is an official document informing about the new project. Thanks to the white paper you can also detect crooks, obvious signs of this can be fake data of team members or plagiarism.
- Order. It is an order to buy or sell an asset on an exchange.
- Drawdown. It is a decrease in the asset value, which can lead to losses.
- Bearish trend. This is the state of the market when most assets are subject to drawdown.
- Bullish trend. The quotations of asset prices are directed upwards.
- Level of support. Support is a price level where a bearish trend stops due to high demand.
- Resistance level. At the level of resistance, the price increase is prevented by the high activity of sellers.
- Volatility. This is the fluctuations in the quotations of any asset in the market. It depends on the collateral of the financial instrument.
Mining terms
One of the earliest terms to appear in the crypto segment is mining. Mining is a way of generating new cryptocurrencies using powerful computers. Below you can see the terms which are most commonly used in mining:- Fork. It is the changing of the coin source code and the blockchain algorithm.
- ASIC (application-specific integrated circuit). ASICs are computing devices for mining digital assets.
- Pool. The pool unites a group of miners, who, after mining the crypto divide up all the profits between them.
- Farm. It is a powerful computer with a large number of video cards. Mining farms come in different sizes, some of them are set up in a separate room of an apartment, while others rent entire rooms.
- Hashrate. It is a measure of farm performance.
General Terminology
In addition to the terms we gave above, there is a range of other terms. They are used in the stock exchange as well as in other contexts. Let us talk about the most popular ones.
- Crypto whale. This is a serious investor in the market that owns a lot of digital assets.
- Bounties and airdrops. These are giveaways of coins for performing different actions. They are usually arranged by exchanges or any other platforms.
- Retracement. This is a temporary deviation of the movement of quotations from the main trend. The deviation is usually 10% or more. For instance, if there is an upward trend in the market and prices suddenly lose more than 10%, after which they return to growth, then this is a retracement.
- Crypto-trading hamster. It is a newcomer to the market. They buy cryptocurrency at the top of the chart, but when a retracement of the price occurs, they sell everything immediately to avoid losses.,
- Listing. It is the process of adding a new coin to a crypto exchange.
Conclusion
Terminology is a vital part of the crypto industry. We have covered the most basic terms that are in common use. Experienced traders and investors, of course, will find the article tedious, as they will not discover anything new. Nevertheless, for those who are new to the cryptocurrency market, the provided information will serve them well, allowing them to study the market further with greater ease.
Conclusion
Terminology is a vital part of the crypto industry. We have covered the most basic terms that are in common use. Experienced traders and investors, of course, will find the article tedious, as they will not discover anything new. Nevertheless, for those who are new to the cryptocurrency market, the provided information will serve them well, allowing them to study the market further with greater ease.
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