The Crypto world is the rising trend of the 21st century. Hence, Even if you have no plans to invest in Crypto, it is exciting to understand a thing or two about it.
Let us take a look at some of the most important terms related to Cryptocurrency to improve our understanding of the matter.
What Is Cryptocurrency Trading?
In simple terms, Cryptocurrency trading is the buying and selling of Cryptocurrency. This is a form of digital or virtual currency which is designed to work as a medium of exchange.
Cryptocurrency has been around since 2009 and is still a developing technology. Its journey to the mainstream is ongoing and it is estimated that the value of all the Cryptocurrencies in circulation is around $10 billion.
Another important question is how you acquire Crypto coins. To understand this, we need to talk about the Cryptocurrency exchange platforms.
These platforms have major importance as they give you a chance to buy, sell, and exchange different Cryptocurrencies. Secure platforms like bitcoin buyer give you information about the best Crypto trading options and help you get an overview of the market before investing.
Important Terms You Should Know Before Crypto Trading
Here are five important terms you can take for starters when thinking about investing in Cryptocurrency:
Blockchain
Blockchain is the technology behind Cryptocurrency. It’s a decentralized, peer-to-peer system that allows for secure transactions. However, it does more than just that.
Blockchain has a number of inherent benefits:
- It is scalable. So, you can use it to store huge amounts of data without using up much space or processing power.
- It is a secure distributed ledger that uses cryptography to ensure that no one can tamper with the data without being detected.
- Its decentralized nature eliminates the need for middlemen when you’re making trade exchanges.
Decentralized Exchange System
Decentralized exchange systems are a type of decentralized network that facilitates the exchange of digital assets. The most common ones are Cryptocurrency exchanges. However, this system can be used for any sort of digital asset.
Bitcoin is the first and most famous example of a decentralized exchange system. There are many other DEXs that work with different Cryptocurrencies and altcoins, but there is still only a handful of them in existence.
Bitcoin
Bitcoin is a digital currency created in 2009. The person or group behind BTC did not reveal they’re true identities; instead, used the alias, Satoshi Nakamoto. It is not backed by any government and is completely decentralized, meaning there is no central authority that controls it.
These digital currencies are created through a computer process called mining. The idea behind Bitcoin is that it’s a way to exchange value without needing to go through a third party like a bank or credit card company.
Altcoins
Altcoins is an abbreviated term for alternative coins. These are the alternative Cryptocurrencies to bitcoin.
As of now, there are more than 460 alternative coins. The altcoins are intended to be used as a bitcoin substitute.
They are not supposed to be mere copies but innovations of the existing Cryptocurrencies.
Here are some examples of Altcoins:
- Litecoin (LTC).
- Monero (XMR).
- Peercoin (PPC).
- Namecoin (NMC).
- Primecoin (XPM).
- Dogecoin (DOGE).
- Ripple (XRP).
- Stellar (STR).
Ethereum
Ethereum is a blockchain-based computing platform that allows developers to build and deploy decentralized applications.
A decentralized application or a dApp is an application that runs on a blockchain network instead of being controlled by a centralized authority like a bank or government entity.
The Ethereum Virtual Machine (EVM), which can execute code autonomously, makes it possible to run any decentralized application. Ethereum enables developers to create and run smart contracts.
Conclusion
In this article, we have already covered most of the relatable terms of the Crypto world. Now it’s time for our readers to get out and explore digital finances themselves and invest a good chunk.
On a serious note, be careful of the frauds and mishaps that many Crypto investors have faced. Make sure you’re streamed with an authentic platform before proceeding with any exchange.
For any further queries, please leave us a comment in the section below. We’d be happy to help.
