Have you heard about terms like mining, address, HODL, wallet, fork etc. in cryptocurrency? If yes, you’re not alone. Here’s the Bitcoin 101 explanation on common words used in cryptocurrency that you should know.
Cryptocurrency, also known as digital currency, is quite famous nowadays. Just like the standard stock market, this type of currency has it ups and downs. Although the money invested on cryptocurrencies may be higher than the stock market value. Popular businesses like Elon Musk’s Tesla were the latest reasons why people are now invested more in digital currency than before. But, before you get to that food chain, here’s the Bitcoin 101 tips: meanings of various common terms used in cryptocurrency.
What does this mean?
If you’re reading this article, you’d probably heard the words, ‘cryptocurrency’ or Bitcoin. Cryptocurrency is the general term for all the digital coins in the circulation. It is broadly defined as virtual or digital money which takes the form of tokens or “coins.”
Not only Bitcoin is the available crypto coin in the world, there are also other cryptocurrencies like Ethereum, Litecoin, Monero, Tether, etc. But Bitcoin is the most popularized crypto coins due to many people investing on this specific coin.
For the first term in our list, Bitcoin is the early digital cash that started the cryptocurrency movement. This was first created in 2019 by a person or an unknown group called Satoshi Nakamoto. What’s unique on this digital coin is that banks have no connection in this currency. Unlike the standard physical money currency in the circulation, transactions between these parties only rely on the pseudonymous people and the system itself. No banks allowed.
Wallet in cryptocurrency world is not the typical wallet in banks. This is defined as the software that interacts with the blockchain to allow users to receive or even buy their own crypto coins. Once you decide to start buying bitcoin, for example, your third-party software will assign you your specific wallet– that only you can access.
Another word to remember in cryptocurrency is the term, ‘Blockchain.’ Just like the word itself, Blockchain is a ‘block of chains’ that records every transactions in the cryptocurrency world. This is a digital recording that no one can access. All data inserted into the blockchain is unique. This will prevent a user to double-used the crypto coin in buying certain products.
What we thought as ‘mining’ in environmental aspect is different from the mining term in cryptocurrency. Crypto mining is the process on how to get coins in circulation. This is the computerized way of verifying each transactions being added to the blockchain database. Not everyone can mine bitcoins though.
Bear and bull are also two of the most common terms used in cryptocurrency market. Bearish market means the prices are getting out of hand with failing characteristic. While, the Bullish terms means the market is on a positive note on the value, meaning it’s going to increase even more.
Last but not the least in our common terms in crypto world is the word called ‘HODL.’ You’d probably heard this from Elon Musk himself. This was originally a misspelled word of ‘HOLD.’ However, cryptocurrencies and even stock market now use this term with a definition of “Hold On for Dear Life.” From the phrase itself, this means you need to hold on to your crypto coins before deciding to sell them instantly.
What are the other cryptocurrency terms you want to know?