Beginners’ Guide to Crypto Terminologies
It could take some time for a beginner to get used to the cryptocurrency space. Sometimes, you may feel like you’re in a strange country where you don’t understand the language being spoken. It’s all part of the learning process. But you’re not alone. It’s a stage we all have to go through. To make your learning curve less steep, we’ve developed a glossary of some of the most popular terminologies in today’s cryptocurrency and blockchain industry. Dive in!
Altcoins: The term altcoin (ALTernative+coin) is used to describe all cryptocurrencies other than bitcoin.
All-time high/all-time low: The ATH or ATL refers to the highest or lowest price ever reached by a digital asset.
Bull market: A bull market is a market situation where prices generally trend upward. A positive feeling in the market usually accompanies this as traders keep buying, meaning the prices keep rising.
Bear market: A bear market is the opposite of a bull market. In this trend, market prices are headed downward. The general outlook is negative as traders are nervous, and prices will generally fall.
Blockchain: A blockchain is a permanent, decentralised ledger that keeps records of all transactions across a peer-to-peer network
dApp: Decentralised applications are programs built on blockchain networks (commonly on the Ethereum protocol) that use smart contracts to provide services to end users.
DeFi: Decentralised Finance is a term used to describe entities that use crypto and blockchain technology to provide decentralised financial services.
Fiat: Fiat refers to government-issued currencies (like the dollar, naira, or euro) serving as the legal tender within the realm of that government’s jurisdiction.
Gas: This is the fee charged for performing operations on the Ethereum network.
ICO: ICO means initial coin offering. This is when new crypto is sold to investors for the first time.
KYC: KYC stands for Know Your Customer. It is a process by which a financial service provider gathers and verifies customer information.
Liquidity: Liquidity in crypto is the measure of how easily you can convert a crypto asset to fiat or another crypto.
Market cap: Market capitalisation is the price of an asset multiplied by its circulating supply. It represents the total value of an asset and its market.
Metaverse: The term ‘metaverse’ is a broad term that describes the collective interactive and immersive virtual worlds which combine different technologies, like the internet, virtual reality (VR), artificial intelligence (AI), augmented reality (AR), etc.
Mining: Mining is the process of contributing computing resources to a blockchain network to create new blocks in order to earn rewards.
NFT: A non-fungible token is a unit of data stored on a blockchain that certifies a unique digital asset that cannot be interchanged.
Smart contracts: A smart contract is a program stored on a blockchain that automates the execution of agreements between parties once predetermined conditions are met.
Stablecoin: A stablecoin is a digital currency that’s designed to mimic the value of another currency (usually fiat)
White paper: This is a document typically released by new projects to help potential users or investors understand the product or service, its use case, and its potential.
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