Coming into the world of cryptocurrencies can be an exciting but also overwhelming experience, especially when confronted with a sea of jargon. Mastering the crypto jargon is key to crossing this digital frontier. Here's a beginner-friendly glossary to demystify the key terms:
1. Blockchain: A distributed and decentralized LEDGER which records all transactions on a peer-to-peer computer network.
2. Cryptocurrency: Currencies that use cryptography for security and run on blockchain technology.
3. Wallet: A digital application that keeps, delivers and collects cryptocurrencies securely.
4. Bitcoin (BTC): The first and best-known crypto currency, invented by an unknown person or group known as Satoshi Nakamoto.
5. Altcoin: Any cryptocurrency other than Bitcoin. Such examples are Ethereum, Ripple and Litecoin.
6. ICO (Initial Coin Offering): A method of fund raising in which new cryptocurrencies are sold to investors before their official launch.
7. Mining: This is the process of verifying transactions and adding them to the blockchain, often resulting in new coins being created.
8. Fork: A split in the blockchain which leads to two versions. This may result from an upgrade or a different way of arriving at consensus rules.
9. FUD (Fear, Uncertainty, Doubt): Spread of negative information or rumors causes fear and uncertainty.
10. HODL: The name comes from the accident word 'hold' and refers to an investment strategy that involves holding assets through ups and downs in prices.
11. Smart Contract: Contracts that run themselves. The terms of the deal are written right into code itself.
12. Decentralized Finance (DeFi): Lending and borrowing, among many other financial services: blockchain-based without the traditional intermediaries.
Once you've mastered these in particular, then your grasp of the world of cryptocurrencies will be sound. Of course the more you explore the following space, and learn and expand your crypto vocabulary will improve your cognition in this area .
