Essential Cryptocurrency Terminology for Beginners

Essential Cryptocurrency Terminology for Beginners

The word cryptocurrency definitely does ring a bell with most people, but it might also leave them utterly confused at the same time. Big-sounding words like blockchain, HODL, ICO, etc. can make crypto-trading seem like a game that’s only meant for tech nerds, however, the world of crypto-trading isn’t nearly as complex as it seems. Do not be afraid of the technical jargon. We’ve broken down these colossal terms into simpler language for you!

Here are some of the terminologies and their significance:

Blockchain:  Understanding this technology is the very foundation of learning about cryptocurrency. All forms of cryptocurrencies are based on blockchain technology, a mechanism that allows decentralization of digital trading. A decentralized system is one that allows a direct fund transfer between two people without the interference of any central or government authority. This provides all your transactions with an unparalleled level of security, virtually free from cyber threats such as hackers and intervention by third-parties.

This technology also lets anybody develop great products, apps, or services without the permission/censorship of any other authority. Numerous developers have created several blockchain-based games and apps that have completely altered the way people view cryptocurrency.

Block and Ledger: A block is the basis of blockchain technology. Each block is a file of information that cannot be tampered with. A ledger, on the other hand, is a large database spread across different locations; blockchain can simply be considered as a specific application of the ledger.

To understand this better, you can take the analogy of a book and the pages. A block is a ‘page’ and a ledger can be considered as the ‘book’.

Address: It is a series of case-sensitive numbers and letters that is used for the transfer of cryptocurrencies. One can send or request payments using these addresses. To keep your identity anonymous, it’s much safer to do each transaction with a different address.

Bitcoins and Altcoins: Bitcoins were the first cryptocurrency to be introduced in the market. All cryptocurrencies apart from Bitcoin are known as Altcoins. There are currently over 1700 cryptocurrencies that are officially recorded.

Public and Private Keys: These keys encode information that is sent between two users. They assist each other in securing your data in such a way that the information is only accessible to you or the other person; the private key allows you to access/sign the message and the public key proves the existence of your currency on the blockchain.

ICOs: Initial Coin Offerings (ICOs) are the initial funding given to upcoming cryptocurrencies. To set its foot in the market, any new blockchain project, app or service launched by a company requires some fundraising. The investors receive a share in the currency for their investment, if the currency is a success, the investors can expect to get paid rich dividends.

The digital trading market is ever-evolving, new terms are being constantly added to the dictionary with the advent of new technologies. Marketscap.com helps new users understand cryptocurrency at a more intuitive level. It offers a multifaceted trading platform with 800+ Cryptocurrencies, Generous Trade Margins, Account Funding With Fiat Currencies(USD, GBP, and EUR) and 24/7 Professional Support.

 

 

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