Basic Definitions for Entering the Crypto World
Want to get into the world of cryptos, but don’t know where to start? Here’s a little guide of basic definitions to get you initiated and ready to digest any news related to the blockchain, Bitcoin, or anything related to cryptos.
But, first of all, what is “crypto“?
The term crypto stands for cryptocurrencies. They are decentralized digital currencies, because their value doesn’t rely on any bank, government, financial system, or third party, it relies on the demand and offer of their users. It functions through the cryptographic system called blockchain, which is impossible to fraud.
It’s the system through which cryptocurrencies work, it’s based on cryptography. This system works with blocks that are chained and make for the cryptographic signature blockchain. All the users are connected and before processing a transaction the chain has to run all the historic transactions completed before that one, making the system unfraudable.
The first cryptocurrency invented, it’s also the most popular and valued in the market. An online user called Satoshi Nakamoto invented it in 2008 through a whitepaper in a cryptography forum. According to Nakamoto, it was created to allow “online payments to be sent directly from one party to another without going through a financial institution.”
It’s the second cryptocurrency with the most market capitalization. It was invented in 2013 by Vitalik Buterin. It has its own blockchain on which a lot of other cryptocurrencies function in.
It’s the total market value of the crypto, it’s calculated with the formula: market capitalization = supply of the crypto x current price of the crypto.
These cryptocurrencies are backed by assets, like gold, petroleum, or the dollar. The principal use of these cryptos is to reduce volatility. Some stablecoins are Tether, USDC, and Dai.
It’s a cryptocurrency that is either named or associated with a meme, for example Dogecoin, Banano. and Shiba Uni. The majority of people think of them as a joke, but they have been performing very well in the past year.
It stands for Non Fungible Tokens. They are digital assets that function through the blockchain, making the certain asset owned unique, irreplaceable, and not exchangeable. They have been applied to art, music, cars, sports, etcetera.
These are the platforms through which cryptocurrencies can be bought, sold, and exchanged. The most popular ones are Binance, Coinbase, and FTX.
Digital wallet where the user’s cryptocurrencies can be saved or stocked up for further use.
Bullish and bearish markets:
Bullish means that the market is going up or trends to go upwards (it’s called bullish because bulls attack down to up). Bearish markets are the ones that are going down or are trending to go downwards (called bearish, because bears attack from up to down).
If you want to continue learning about cryptos, and about more advanced definitions I recommend you to check out the educational pages from CoinMarketCap, Binance, and Gemini.
Hope on to the crypto train, and embrace the new technologies that are changing the world, be part of them, and learn from them. You are always on time to research, and learn how to invest in cryptos, so: Join in!