A Deeper Guide into Crypto Terms
In addition to all of the interesting new terms that cryptocurrency enthusiasts use within the community, there are also some industry basics that anyone trying to get into the cryptocurrency game should know.
A strategy to take advantage of differences in prices across markets to make a profit.
An expectation that a coin’s price is going to decrease.
Blockchain technology was created as a database to store transactions of the cryptocurrency called Bitcoin. These transactions are placed into timed segments called “blocks,” which incorporate all transactions for that block as well as a cryptographic hash of the preceding blocks, transaction data, and a timestamp. While the data in these blocks are anonymized, and encrypted, for many blockchains, the ledger is still accessible and readable to anyone and everyone who wants to take a stroll through it.
A Bollinger Band, which developed by famous technical trader John Bollinger, is plotted by two standard deviations away from a simple moving average.
An expectation that a coin’s price is going to increase.
The process of moving cryptocurrency “offline,” as a way of keeping cryptocurrency safe from hackers.
Exchanges are websites that allow you to buy and sell cryptocurrencies. Some popular exchanges in North America are:
Limit Order / Limit Buy / Limit Sell
These types of movements are set by traders to buy or sell a coin when the price meets a certain amount.
An extremely risky form of cryptocurrency trading.
The total value held in a cryptocurrency. It is calculated by multiplying the total supply of coins by the current price of an individual unit.
According to Bitcoin.org, “mining is a distributed consensus system that is used to confirm waiting transactions by including them in the blockchain. It enforces a chronological order in the blockchain, protects the neutrality of the network, and allows different computers to agree on the state of the system.”
A computer uniquely designed to process proof-of-work blockchains, like Ethereum. These rigs often consist of multiple high-end graphic processors (GPUs) to maximize their processing power.
A particular computer that possesses a copy of the blockchain and is working to maintain it.
“Proof of Work,” an economic measure to increase security on a network by requiring work from a service requester. This helps ensure that the blockchain maintains its integrity.
“Proof of Stake,” is an alternate way of verifying and validating the transaction or block.
“Return on Investment,” the percentage of how much money has been made compared to an initial investment.
A scaling solution for blockchains. Typically, every node in a blockchain network houses a complete copy of the blockchain. Sharding is a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds.
A cryptocurrency with extremely low volatility that can be used to trade against the overall market.