Cryptocurrency, Bitcoin, and Blockchain, the three most used words by anyone who gets introduced to the crypto world. These are just more popular than others, but there are other terms one needs to know to get well-versed in the world of crypto. Most importantly, understanding the industry terminologies would help the investors to make informed investment decisions and learn the prospects of the industry.
Specific terminologies are highly unique to the digital currency, making it unlikely that traders would not have come across when they are dealing with stocks, bonds, and commodities.
This blog will guide us in exploring more such terms relevant to cryptocurrencies. This will help you understand the world of cryptos in a better fashion. Let’s start alphabetically.
The word altcoins is a combination of “Alternative” and “Coins.” It represents cryptocurrencies other than Bitcoin. The majority of altcoins are forks of Bitcoin with small changes.
The blocks are digital files of information where data pertaining to the Bitcoin network is added. The block is like a page of a ledger or record book. It virtually stores the information in cryptography with the timestamp of the transaction. It contains the present and the past. The completed block is a permanent record of transactions in the past, and new transactions are recorded on the present one.
Hodl is quite a well-known word in the crypto community. It represents holding the cryptocurrency instead of selling it. The name originated from one of the Bitcoin forums where a person claimed, “I am hodling.” It was a spelling mistake, but it became part of the crypto world. Many traders hodl cryptocurrency when the market is not good enough to perform any transaction due to its volatility.
It is quite a popular word which means FEAR OF MISSING OUT. The FOMO represents a circumstance, when an investor feels that he/she is missing out on a handsome profit that others might enjoy if he doesn’t invest. It is always advisable not to make any trade decisions based on speculations.
FUD means Fear, Uncertainty, and Doubtful. The word FOMO and FUD are closely related. People tend to get into this position when the market is more volatile. The result of these trade emotions will be buying a new coin or selling a currency that you have been holding without any proper analytical decision. These irrational trade practices will lead to massive loss, and burden you financially.
Hash is a function used in the blockchain that converts an input value – number and letters into an encrypted alphanumeric output of a fixed length. It is an essential part of the blockchain system to maintain the security of transactions in the network. All newly mined blocks are added to the chain network after getting an output from the hash.
It is a relatively new term added in the crypto terminologies. DeFi means Decentralized Finance. Decentralized Finance structure used blockchain technology in the financial sector. It enables the whole financial system like insurance, loans, saving, etc. Operate without having to deal with any middleman. DeFi completely processes the entire system in the blockchain network with the help of smart contracts for execution.
In the blockchain system, forking means making changes to a cryptocurrency blockchain. There are soft forks and hard forks.
Soft Forks means making some small changes or updates in the existing blockchain network. It is a kind of software upgrade to enable the blockchain to perform efficiently.
Hard Forks means implementing some permanent changes with new consensus rules, which makes older versions invalid. Hard forks are substantial changes like the split between Bitcoin, Bitcoin Cash, and litecoin.
This is a common term used by online gamers. It means wrecked. When a trader suffers massive loss by losing substantial amounts of investment, due to adverse market judgment or due to unexpected volatile market movement, it is termed as REKT.
The term mooning represents the positive movement of Cryptocurrency price value. It is most commonly used by altcoin traders who often use it to quote how altcoins like Ethereum, XRP and Litecoin will sharply grow in the near future. For example, Litecoin will reach the moon.