Crypto Terms You Need to Know Before You Start
Exploring the digital world of cryptocurrency can feel like learning a language. Between the HODLing of gas and blockchains, it’s very easy to get lost before starting to buy your first crypto.
We’ve put together this brief guide on the basics of crypto for novices to ensure that you’re able to feel comfortable and avoid the common mistakes that people make as you begin your journey.
Let’s take it apart
1. Cryptocurrency
Let’s get started by addressing the most obvious.
A cryptocurrency is a form of money that uses encryption to ensure transactions. Consider it to be Internet money that is not centralized and controlled by no particular bank or government.
Examples: Bitcoin (BTC), Ethereum (ETH), Solana (SOL)
2. Blockchain
It is the blockchain that is the tech behind cryptocurrency. It’s a type of ledger digital that records each transaction by a cryptocurrency asset.
When a transaction is included in the blockchain, the transaction can’t be modified and this ensures that the system is secure and clear.
3. Wallet
A cryptocurrency wallet is a place to store your cryptos. The wallet doesn’t hold actual currency, it’s your keys (like your password) and password — that give the user access to these funds.
Two types exist:
- Hot Wallets (connected to the web)
- Cold Digital Wallets (offline and even more secure)
4. Private Key & Public Key
This is an important aspect of making cryptocurrency safe.
- Your public password is similar to your email address – it is possible to use it to share information with others.
- Your private password is just like your password. You should never divulge it. Ever.
5. Gas Fees
Gas charges are the transaction costs that you incur when using certain cryptocurrencies (like Ethereum). They’re essentially a charge to process your transactions on the network.
The more congested the network is the more fees.
6. Smart Contract
Smart contracts are smart contract is an electronic agreement with self-executing that is run on the blockchain. No middlemen. No paperwork.
They drive things such as NFTs, DeFi apps, and many more.
7. HODL
The word was originally an error in spelling “hold,” and now it’s become a fad in the cryptocurrency world. “HODL” refers to holding your cryptos regardless of what happens — even in the event of market declines.
8. DYOR
DYOR = Do Your Own Research.
This is an important aspect of cryptocurrency. When you decide to invest in a cryptocurrency, make sure you make sure you are doing your research. Whitepapers, developer activities, and use cases — everything.
9. Whitepaper
A whitepaper is a piece of paper released by a cryptocurrency project that explains what it does, what it is aiming to address issues, and what it is planning to expand. This is similar to the business plan that is behind the token.
If you’re serious about investing your money, master the art of reading a financial report.
10. Bear Market / Bull Market
- Bull Market is Price is going up. Everyone’s excited.
- Bear Market means The prices are dropping. Everyone’s nervous.
These words are relevant to any market, however you’ll see them frequently when it comes to crypto.
Final Thoughts
The fundamentals of cryptocurrency are the first step to understanding the language. This quick tutorial in the crypto terminology for beginners You’re just one step ahead of the majority of beginners.
While you explore the world of cryptography, don’t stop making inquiries, continue to learn Don’t be rushed. The more you learn more you know, and the better choices you’ll make.
Are you looking for more crypto-related tips that are beginner-friendly? Contact me and I’ll forward you a new tutorial!
