The Cryptocurrency Jargons: We explain the meaning of cryptocurrency jargons such as mining, whales, and wallets.
Although cryptocurrency is a popular investment, especially for younger people, some of the technical jargon can be confusing and intimidating for those who are just starting out.
It can be difficult to understand the differences between Bitcoin and Blockchain if you don’t have any idea what gas is or who a whale is.
It’s much easier to be familiar with the terms used in this industry. It doesn’t matter if you are interested in purchasing cryptocurrency immediately or later. Knowing the terminology is an important first step. This beginner’s guide will help you get started in cryptocurrency.
This term can sometimes cause some confusion. The coins appear to be made by blasting mountains. They are not. Mining is the process of creating new crypto tokens and putting them in circulation.
Complex mathematical equations require powerful computers. Users can earn coins once they have solved complex mathematical equations. The coins can be traded with other users or via online exchanges.
However, investors rarely mine or create new tokens. You can instead buy and sell tokens from others, just as you would any other asset within your investment portfolio.
Whale accounts are accounts that have a lot of coins and can influence the market alone. Many of the most well-known and widely used cryptocurrencies include a lot of whales that are able to really “lift their weight” around.
There are actually popular websites that monitor whale activity, which allows for more transparency in cryptocurrency markets.
Whale accounts can be early investors or large funds. Tracking their activities is a smart way to see how the cryptocurrency market will move.
All your crypto coins are stored in a wallet. Your wallet is protected by cryptography. If you forget your password, you can lose access to all your coins. Cryptocurrency is built on the principle of decentralized distribution.
Therefore, it is important that people are responsible for their passwords.
There are two types of wallets: hot and cold. A hot wallet can be connected to the Internet, making online trades easy. However, a cold wallet acts as an offline safe and protects your wealth.
Peer-to-peer networks are the basis of cryptocurrency trading. Blockchain is the digital ledger that records details about each cryptocurrency transaction.
There is no central database, and anyone can access the blockchain details anywhere. Hackers cannot access it and corrupt it.
It is the cost to conduct a cryptocurrency transaction. It covers the cost of paying a miner (the person who solved the equation and earns a coin) to search for and retrieve crypto. The amount depends on the speed at which you need the transaction to take place.
It is the exact destination to which cryptocurrency is sent. It is similar to a bank account, but it holds only cryptocurrency. Each address is a collection of alphanumeric characters that can be used to store crypto assets.
This address is used to prove ownership by the recipient of any cryptocurrency they have been sent.
This term is often used to refer to cryptocurrency as the traditional currency (fiat), that is backed by the government and issued by it. This gives central banks greater control over the economy.
Fiat money is currency, such as the Indian rupee and the US dollar.