The Basics of Cryptocurrency

Part Two: Crypto currency terminology

Blockchain: A digital, decentralized ledger that records all transactions across a distributed network of computers. Once recorded, data is nearly impossible to alter.

Node: Any computer connected to a blockchain network that validates transactions and maintains a copy of the ledger.

Crypto Wallet: Software or physical hardware used to store the cryptographic keys needed to access and manage your crypto assets. Can be classified into two, Hot Wallet, Connected to the internet (e.g., mobile apps, browser extensions). Convenient, but higher risk amd Cold Wallet, Offline hardware (like a USB device). Maximum security for long-term storage.

Gas / Gas Fees: The network transaction fee paid to miners or validators to process transactions on a blockchain (most common on networks like Ethereum).

Altcoin: Short for "alternative coin" refers to any cryptocurrency other than Bitcoin (e.g., Ethereum, Solana).

Stablecoin: A cryptocurrency pegged to a stable real-world asset, usually a fiat currency like the US Dollar (e.g., $USDC , $USDT ), to minimize price volatility.

Market Cap (Market Capitalization): The total dollar value of a cryptocurrency's circulating supply.

Bull Market: A period of rising prices and widespread investor optimism.

Bear Market: A prolonged period of falling prices and market pessimism.

FUD: "Fear, Uncertainty, and Doubt" spreading negative or misleading information to drive prices down.

FOMO: "Fear Of Missing Out" buying an asset purely because its price is soaring.

HODL: Originally a famous forum typo for "hold," now stands for "Hold On for Dear Life." It means holding onto assets through market crashes rather than panic-selling.

NFT (Non-Fungible Token): A unique, non-interchangeable digital token recorded on a blockchain, used to prove ownership of specific digital items (art, music, collectibles).

DeFi (Decentralized Finance): Financial services (lending, borrowing, trading) built on blockchains that operate without traditional intermediaries like banks.

DApp (Decentralized Application): An application built on top of a blockchain network rather than hosted on centralized company servers.

Smart Contract: Self-executing code stored directly on a blockchain that automatically enforces and executes agreement terms without needing a middleman.

This is the basic terminology you need to understand before getting or buying a crypto asset.

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