Fast evolving and lots of innovative use cases springing up with businesses and governments of certain countries adopting its use, everyone needs to learn and understand a thing or two about the crypto world.
The cryptocurrency world can be quite daunting even for seasoned investors, with new crypto technology springing up from time to time learning about new terms when it comes to cryptocurrency takes time. For newbies/beginners who are trying to find their way into the space, this article will serve as a guide.
As with any investment, it is highly important to understand exactly what you’re investing in before you start at it, especially when it comes to an asset class that’s still evolving like - crypto.
In this article, you will discover 10, basic crypto terms you should be familiar with as you grow in your knowledge of cryptocurrency. We have put together these crypto terms to help make it easier for every beginner looking to learn more about crypto, learn with ease. It is also important to note that this list is not exhaustive.
Basic crypto terms to know
This is a decentralized virtual ledger where every cryptocurrency is processed, verified and recorded. Due to its decentralized nature, no one can lay claim to it as it is not controlled by any single entity. Rather, the blockchain exists across computers all over the world which are accessible by the internet. To verify any transactions performed, any transaction that gets added to the blockchain is encrypted individually, timestamped, and cannot be changed.
Fiat vs Cryptocurrency
Fiat simply refers to government-issued currencies for example USD, Naira, etc. while cryptocurrencies or crypto refers to digital currency secured by cryptography. Each crypto "token" refers to the amount a person owns. For example bitcoin.
A crypto wallet is an app or storage device that allows one to store and retrieve your cryptocurrency and can hold multiple cryptocurrencies. Wallets could be hot (online) or cold (offline).
To HODL is a fun term used to refer to holding on to crypto-assets with potential for as long as one can.
Initial Coin Offering (ICO)
ICOs are similar to IPOs for stocks and they are a way to raise funds for a new cryptocurrency project.
Altcoins refers to alternative coins i.e. other coins that are not bitcoin. e.g. Ethereum, Solana, bitcoin cash, etc.
An exchange refers to a digital marketplace where anyone can buy and sell cryptocurrencies.
Gas refers to the fee that is required to execute a transaction on the Ethereum blockchain platform. Gas fees are typically paid in ether, the native cryptocurrency of Ethereum.
Market Capitalization refers to the total value of all coins that have been mined. To calculate a crypto’s market cap, this can be done by multiplying the current number of coins by the current value of the coins.
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