Business, Cryptocurrency

The Crypto’s Lingo: Digital Currency Terms that You Should Know

By

Mohit Kamboj

If you’re planning on investing in digital currencies, there are a lot of things for you to consider and learn. So before jumping into the crypto trend, you must first do everything in your power to gain the necessary knowledge about digital currencies and their market. And aside from knowing what cryptos are, you should also learn about the lingo of digital currencies as there are many new and key terms in the language of cryptocurrencies. To do this, you can check out Bitcoin Era.

Altcoin

The altcoin is derived from the term alternative coin, which is basically any cryptocurrency coin that is not Bitcoin, considering that it’s the first-ever digital coin that came to be over a decade ago. Generally, altcoins can be practically anything, from the second-most popular crypto, Ethereum, to any of the other coins out there as there are already thousands of different digital currencies in the market, not to mention that more are being added each year. In essence, if you’re planning on investing in digital currencies, it’s highly advised that you should mainly stick to the more mainstream coins for investment.

Blockchain Technology

Blockchain technology is fundamentally a ledger that only exists in the digital space, it’s the underlying technology behind digital currencies as a whole, and it’s where all crypto-related transactions are verified and recorded. A ‘blockchain’ is the result of sequential blocks that stack up to one another every time a new block of information is added, hence creating an unchangeable and permanent digital ledger of crypto-related transactions. Blocks, on the other hand, are made up of all the users’ transactions whenever they buy, sell, or trade crypto coins. And once a certain block reaches its limit to hold information, a new block is formed to be added to previous blocks, hence creating a chain of information.

Cold and Hot Storages

Cold storage is mostly preferred as cold wallets or hardware wallets, and it’s primarily a digital wallet where investors and traders can store crypto funds. Cold wallets, more specifically, are separate hardware wallets that let users store their coins in a device like a flash drive, away from the internet and the potential threats that come with it. Hot wallets, on the other hand, are relatively similar to cold wallets, but hot wallets are digital storages that let users put their crypto funds in a cloud or in a digital storage system. But regardless of whichever type of crypto wallet you choose, it comes with its own unique set of risks; thus, it’s highly recommended for you to look up these types of wallets and choose which one will suit you best.

Public Keys

When you’ve chosen which type of digital wallet to go for, another key term that you should know about is public keys. A public key is basically an address assigned to your digital currency wallet, similar to how banks work with an account number. The way it works is that the owner of a digital wallet has the capability to share their public wallet keys with particular individuals or institutions so that they will be able to take funds from the digital wallet or send money into you, but it will only go into your account if you authorise it.

Decentralised Apps

Decentralised applications, or moderately called DApps, are software applications that are created by developers as they deploy the application on a blockchain to carry out specified actions without the need of any intermediaries. Generally, the activities conducted on decentralised finance are often completed with the use of DApps, and the main network that supports the activities that decentralised finance conducts is Ethereum, the second-best digital currency asset in the market today.

Final Thoughts

Ultimately, if you are thinking about getting involved with digital currencies, you should always keep in mind that gaining knowledge of all the terminology in the industry is greatly beneficial to your success. The terms listed above are only a few of many others in the crypto space, but it’s a start as it’s one of the most important terms to know about cryptocurrencies. If you do your research and learn the necessary information, you can increase your chance of meeting your objectives in your investment plan.