Whether you are new to the crypto space or have been involved for some time now, it is important to understand the terminology and phrases used throughout the industry. In this crypto article, we will provide a comprehensive list of crypto terms and definitions so that you can feel confident in your understanding of the crypto world. Let’s get started!
Altcoin is an abbreviation for “alternative coin.” Altcoins are all cryptocurrencies that exist besides Bitcoin. They were given this name because they provide an alternative to standard fiat currency.
ATH or “all-time high” is used to describe the highest price an asset has reached since its inception. This refers to the maximum amount a trader is willing to pay for an asset, regardless of how much of the asset they actually receive.
“Bears” are traders who believe that an asset, such as a digital currency, will decrease in value. Another way to phrase this is that if a trader believes cryptocurrencies will lose value, their sentiment about the digital assets is “bearish.” In many instances, traders place wagers (known as taking short positions) with the possibility of it paying off should the chosen asset fall in depth chart analysis purposes.
Blocks, as many cryptocurrencies employ blocks. These which are data files that contain confirmed transactions.
A blockchain is a digital ledger that keeps track of all transactions. This ledger is duplicated and distributed across the entire network of computer systems on the blockchain.
Crypto mining is the entry of new coins into circulation. In other words, it’s the process by which people contribute their computing power to solving complex math problems in order to validate transactions and secure the Bitcoin network.
A crypto wallet is a software program that stores cryptocurrencies and allows you to access them while also permitting you to send and receive them between wallets or exchanges.
DeFi, or decentralized finance, is a new-breed of peer-to-peer financial services that would be automated, blockchain-based, and would challenge conventional banks. It seeks to decentralize historically centralized operations like trading, lending, investment management, wealth management, payment processing, and insurance.
Market cap or crypto market capitalisation is calculated by multiplying the price of a cryptocurrency with the number of coins in circulation. This is different from stock market capitalisation, which takes into account share price times shares outstanding.
Mean hash rate is the average number of hashes per second that a miner can generate.
“Minting” an NFT means that your digital art becomes a verified, authentic part of the Ethereum blockchain. By representing your digital artwork as an NFT, you can trade it on the market and have assurance that it will be identified and valued correctly if/when it is resold or collected in the future.
On-chain analysis is the study of data available about public blockchain transactions in order to make better decisions. It is often used for trading and investment purposes.
Rug-pull definition is when the creators of a cryptocurrency project vanish with all the investor money, making the currency worthless.
Staking allows crypto holders to utilize their digital assets to earn ‘rewards’ or passive income, without needing to sell them.
Stablecoin is a type of cryptocurrency that aims to provide price stability and is backed by a reserve asset such as US Dollars or gold.
“Whale” is used to describe an individual or organization that holds a large amount of cryptocurrency. The cutoff threshold for this definition varies and usually depends on the percentage of the total supply.
Cryptocurrencies are a new and exciting investment opportunity, but they can be confusing for those not familiar with the terminology. We hope that this article by Crypto Tax Calculator Australia was helpful and gave a better understanding into crypto terminology!
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