Hello Friends 👋
In yesterday’s article, we talked about a few important “terms” in Crypto. We will see more of those in this article. Those who did not get a chance to read yesterday’s newsletter, please check below:
Here are some of the terms and phrases that will help beginners better understand the world of crypto investing.
Digital Gold
Experts sometimes compare specific cryptocurrencies to real gold based on the way they can store and increase in value. Bitcoin is commonly referred to as digital gold.
Ethereum
The second largest cryptocurrency by trade volume, Ethereum is a crypto network and software platform developers can use to create new applications and has an associated currency called ether.
Exchange
A cryptocurrency exchange is a digital marketplace where you can buy and sell cryptocurrency.
Fork
When a blockchain’s users make changes to its rules. These changes to the protocol of a blockchain often result in two new paths — one that follows the old rules, and a new blockchain that splits off from the previous one. (Example: a fork of Bitcoin resulted in Bitcoin Cash).
Gas
A fee that developers have to pay to the Ethereum network in order to use the system. Gas is paid in ether, the native cryptocurrency of Ethereum.
Genesis Block
The first block of a cryptocurrency ever mined.
HODL
Stands for “Hold On for Dear Life” though the term originated from a user typo on a Bitcoin forum in 2013. It refers to a passive investment strategy in which people buy and hold onto cryptocurrency — instead of trading it — in the hopes that it increases in value.
Halving
A feature was written into Bitcoin’s code: after a certain number of blocks are mined (typically every four years) the amount of new Bitcoin entering circulation gets halved. The halving can have an impact on Bitcoin’s price.
Hash
A unique string of numbers and letters that identify blocks and are tied to crypto buyers and sellers.
Hot Wallet
A software-based cryptocurrency wallet connected to the Internet. While more convenient for quickly accessing your crypto, these wallets are a bit more susceptible to hacking and cybersecurity attacks than offline wallets — just as files you store in the cloud may be more easily hacked than those locked in a safe in your home.
Initial Coin Offering (ICO)
A way that funds are raised for a new cryptocurrency project. ICOs are similar to Initial Public Offerings (IPOs) of stocks.
Market Capitalization
Cryptocurrency market capitalization refers to the total value of all the coins that have been mined. You can calculate a crypto’s market cap by multiplying the current number of coins by the current value of the coins.
Mining
The process whereby new cryptocurrency coins are made available and the log of transactions between users is maintained.
Node
A computer that connects to a blockchain network.
Non-fungible Tokens (NFTs)
Non-fungible tokens are units of value used to represent the ownership of unique digital items like art or collectibles. NFTs are most often held on the Ethereum blockchain.
[RELATED] Ethereum: What You Should Know Before You Invest
Peer-to-peer
Two users interact directly without a third party or intermediary.
Public Key
Your wallet’s address, is similar to your bank account number. You can share your public wallet key with people or institutions so they can send you money or take money from your account when you authorize it.
Private Key
The encrypted code allows direct access to your cryptocurrency. Like your bank account password, you should never share your private key.
Satoshi Nakomoto
The pseudonymous creator of Bitcoin. No one knows the true identity of Nakomoto — or if it’s more than one person.
Smart Contract
An algorithmic program that enacts the terms of a contract automatically based on its code. One of the main value propositions of the Ethereum network is its ability to execute smart contracts.
Stablecoin or Digital Fiat
A stablecoin pegs its value to some other non-digital currency or commodity. A digital fiat represents a fiat or government-backed currency on the blockchain. (Example: Tether, which is pegged to the U.S. dollar)
Token
A unit of value on a blockchain usually has some other value proposition besides just a transfer of value (like a coin).
Vitalik Buterin
A programmer who invented Ethereum in 2015.
Wallet
A place to store your cryptocurrency holdings. Many exchanges offer digital wallets. Wallets may be hot (online, software-based) or cold (offline, usually on a device).
If you want to share anything or have any suggestions/questions, please leave them in the comments!
That’s it for today :-)
Hope each of you has a great start to your day. See you soon.
— Amit
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