Cryptocurrency Terms Every Trader Should Know
Cryptocurrency market has been a leading investment destination in the past couple of years. However, cryptocurrencies remain controversial even after a long way with regards to both technological advancement and increasing popularity. Some praise the cryptocurrencies stating that they are the future money or the next internet. While others still perceive cryptocurrencies as fraud. We can see that for every person claiming that cryptocurrencies are investment bubbles, theres another person insisting that they represent the next generation of finance.
Cryptocurrencies enjoy significant advantages such as transparency, 24/7 accessibility, decentralization, security, and its great potential for appreciation. On the other hand, disadvantages of the market may include extreme market fluctuations and high uncertainty which makes it hard to predict future prices.
But if youre looking to invest in the crypto market, here are the most important terms you should know first.
Blockchain
Blockchainis a system used to store or record information in a way that makes it difficult or impossible to be hacked, cheated, or changed. It is essentially a digital ledger of transactions that is distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction takes place on the blockchain, a record of that transaction is added to every participants ledger.
Bitcoin
Bitcoin (BTC) is the first blockchain-basedcryptocurrency, created in 2009 by Satoshi Nakomoto. Since then, bitcoin has been attracting millions of investors and became the largest cryptocurrency by market cap. The virtual currency operates on a peer-to-peer network, blockchain, allowing users to make digital financial transactions without the need for a financial institution. BTC was first released online in 2009, and it has been growing in popularity ever since.
Altcoin
Altcoin refers to any cryptocurrency other than Bitcoin. The term comes from “alternative” and “coin” and is used to describe any group of cryptocurrencies, bitcoin is excluded.
Stablecoin
A stablecoin is a cryptocurrency of which price is pegged to other assets such as fiat money or commodities like gold. A new form of cryptocurrencies that aims to keep prices stable, compared to the usual fluctuations seen in the prices of other common cryptocurrencies like Bitcoin and Ethereum. A stablecoin is usually referred to as a digital fiat currency.Tether (USDT)and USD Coin (USDC) are popular examples of a stablecoin.
Crypto Broker
The crypto broker is an entity that acts as an intermediate between the trader and cryptocurrency market to facilitate buying, selling, and trading cryptocurrencies. A cryptocurrency broker trades your funds through a dealer network and is also known as over-the-counter (OTC) trading.
CheckHow to Choose the Best Broker for Crypto Trading？
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