In its brief history, cryptocurrency has significantly impacted the financial industry. It is an intriguing new technology. The first cryptocurrency, Bitcoin, was introduced in 2009. Like any new technology, cryptocurrencies have given rise to a slew of new terms and expressions with nuanced or cunning connotations that may not be obvious to the average person.
One way to distribute tokens is through airdrops. To help decentralize their tokens' ownership, developers will transfer tokens to a blockchain address in exchange for work or even for free.
Dust is a small amount of cryptocurrency balance that effectively gets stuck in a wallet. It happens if you don't have enough to meet the minimum requirements to trade it on a crypto exchange. The dust might be worth less than you'd have to pay in fees to transfer or use it. Check out our article on how to maximize your profits with crypto 'dust' in Binance. Altcoin Altcoin refers to cryptocurrencies that are an alternative to Bitcoin, the first cryptocurrency.
An extended period during which a significant decrease in the cryptocurrency or stock market is referred to as a bear market. A recession, high unemployment rates, political unrest, or a combination of any or all of these factors are responsible for this.
A financial market is said to be in a bull market when prices are rising or are anticipated to increase. The word "bull market" can refer to anything traded, including bonds, real estate, cryptocurrencies, and commodities; however, it is most frequently used to describe the stock market.
A blockchain's individual blocks each represent a group of completed transactions. As the transactions are approved, a permanent compilation is made in the blockchain. Blocks are constructed with a timestamp and cannot be modified after being recorded.
A decentralized network uses the procedure to decide which transactions to put in a block and whether a transaction is genuine.
DEFI is an abbreviation for decentralized finance, a more flexible and open financial system than traditional ones that give you more power. Defi seeks to connect individual users so that financial services can be provided without a centralized bank.
Short for Decentralized Exchange. DEXs facilitate cryptocurrency transactions peer-to-peer without the need for a third party.
Government-issued money. Examples of fiat currencies include the US Dollar and the Euro.
Gas is the cost of carrying out a transaction or smart contract on the Ethereum Blockchain. To distribute the EVM's resources, gas is used. The amount of ETH used to purchase gas. Gwei are equal to 0.000000001 ETH.
A private key is a string of information that can be used to prove electronically that you have access to the cryptocurrency in a particular wallet. Similar to a password, private keys enable you to spend bitcoins from your bitcoin wallet using a cryptographic signature. As such, they must never be disclosed to anyone.
A different way to represent a private key. In contrast to how private keys are often expressed as a long string of alphanumeric text, a seed phrase condenses a private key into a list of 12, 18, or 24 words. To backup and restore cryptocurrency wallets, seed phrases are utilized.
A programmable contract can be executed on specific blockchains like Ethereum and BNB.
Utilized for blockchain network transactions and receiving. It comprises a series of alphabetic characters but may also be viewed as a QR code. Anyone can send money to that address, but only the genuine owner of the address—the holder of the associated private key—can access the money or messages.
An alternative to the proof-of-work method, where the amount of a cryptocurrency you already own (your stake) is utilized to determine how much of that currency you can mine. Your chances of being chosen as a validator and getting a block reward increase with your stake.
A framework that connects mining capacity to computing power. Blocks must be hashed, an easy computational task in and of itself, but a second variable is introduced to make it more challenging. When a block is successfully hashed, the computation and time required must have been significant. A hashed block is regarded as proof of work as a result.
KYC, or "know your customer," is a type of identity verification required by several cryptocurrency exchanges. Broker-dealers (exchanges) are required by law to make a good-faith effort to gather personal data and establish a record for each account with each unique customer. By confirming that consumers are reasonably suitable for their trades or investments, that they are who they claim to be, and that their transaction histories are preserved for tax purposes, KYC ensures these things. Because KYC and AML (Anti-Money Laundering) go hand in hand, they are usually coupled as KYC-AML.
These are campaigns to raise money by selling tokens for a future undertaking in a particular project like the BNB ICO for Binance.
A fork occurs whenever a community modifies the blockchain's protocol or basic guidelines. When this happens, the chain divides, creating a second blockchain that moves in a different direction but has the same historical data as the original.
Autonomous Decentralized Organization. A DAO is a method for anonymous people to work together financially to achieve a common objective. DAOs are created via cryptographic protocols so that users can vote on platform improvements. Some DAOs, such as the Friends with Benefits DAO, serve as exclusive member clubs. A mocking comparison to DAOs is "a Telegram chat with a treasury fund."
There you have it! These are the commonly used crypto terms you will need to know before diving into crypto. Consider yourself a crypto intellect now. Keep checking this list for more updates. Happy Trading!