Getting into cryptocurrency can be a bit daunting, especially if you’re not familiar with all the terms that are associated with it. Even those who have experience with traditional investments can find the landscape of crypto trading confusing, given all its new concepts. However, once you’ve finally gotten the hang of the lingo, your crypto journey will be more or less smooth sailing. If you want a quick rundown of easily confused crypto terms, here are a few of them and what they mean.
Wallet
You’d think that dealing with currency would make owning a wallet mean a literal leather pouch for your bills. But remember that cryptocurrencies are digital in nature, and their storage is built around this concept. Simply put, cryptocurrency wallets hold your digital tokens for you, and allow you to organize them and keep track of each transaction.
There are two types of wallets: a “hot” wallet based online, and a “cold” wallet that stores your digital tokens offline. There are a variety of these and depend on what you’re looking for as well as the type of digital currency you have as well. For example, if you’re trading in Monero, a free XMR wallet will do just the trick to secure your assets. On the other hand, other traders might prefer putting all their currencies in one wallet, and there are certainly wallets that can cater to that as well.
Tokens and Coins
The term crypto tokens is often interchanged with crypto coins, and while the two are very similar, they do have some differences. For instance, a coin is a type of cryptocurrency under a blockchain. Tokens are similar to coins, but there can be many tokens under a single blockchain.
To further clarify, a blockchain is a decentralized ledger of crypto transactions powered by computer systems. Essentially, blockchain is the underlying technology behind cryptocurrency, and there is more than just one blockchain, just as there are several different types of cryptocurrencies in existence. This is something to think about when differentiating the two terms.
Miners and Mining
Another term that can be confused to mean many things is the word “miner.” The concept of a miner would often be associated with the person in control of “mining” cryptocurrencies. Mining involves using one’s computer to process others’ transactions and include them in the blockchain.
However, another interpretation of the term could pertain to the operation itself. While this issue is yet to be settled, we can take the more common use of the term “miner” and use it to refer to the people who mine cryptocurrencies.
Address
If you’re new in crypto trading, the term address isn’t used in the traditional sense. It’s not a literal place nor is it just a marker of an item. Addresses in crypto trading do act like physical addresses in that they are where you can transact your digital assets. However, they’re unlike a physical address because they are only made up of a string of characters in the digital space.
An address in crypto terms reveals much about the nature of cryptocurrencies. They’re very much real, similar to real exchangeable and expendable currencies. But at the same time, they’re digital and exchanges typically occur in spaces and platforms reserved for digital transactions.
Blockchain Speed
Blockchains are very fast systems. That’s why, when a cryptocurrency is called “slow,” this means something else altogether. When one talks about the “fastness” or “slowness” of blockchain speed, it refers to the speed at which a blockchain gives settlement assurance. In this sense, it’s not actually talking about the literal speed of a blockchain, but on how fast it can seal a transaction.
Just remember that crypto technology is already very fast when simply measuring the speed of a single transaction, so when people talk about blockchain speed, it means they’re talking about efficiency and not just the time spent on the transaction.
Crypto Slang Words
Again, being a crypto newbie can leave you feeling left out, especially if you’re not informed of all the slang words and phrases that you might start hearing around you. Here are just a few of these commonly used slang terms that people usually find confusing:
- “To the Moon” talks about skyrocketing crypto rates.
- HODL (hold on for dear life) discourages fellow traders from selling their tokens.
- FOMO (fear of missing out) refers to a mindset of being influenced to buy or sell crypto due to a fear of missing an opportunity to profit or save one’s self from further losses.
- FUD (fear, uncertainty, doubt) is the act of spreading rumors or making up information about a certain cryptocurrency. This is done to force people to prevent buying into the currency or to instigate short-term selling and influence the market.
To get the hang of all the slang, you can visit Reddit forums and other online venues more often. You’ll also be able to learn a thing or two from the community while you’re at it.
Conclusion
Crypto trading does tend to have a few terms that can be easily misconstrued as something else. Since cryptocurrencies are a mix of digital and online culture, tech, and investment strategies, the resulting terms in use for crypto are also somewhere between familiar pop culture references and tech knowhow. Learn to get the hang of a few basic crypto terminologies and you’ll be all set to trade like a pro.
