Table of Contents
With more fresh participants in the crypto market each day, the future of digital assets seems more and more promising. If you’re new to crypto trading yourself, though, allow us to break another thing to you: keeping up with the trends, memes, and tweets is a must.
In addition, it is also important to be aware of popular crypto terms so you can keep up with conversations in subreddits and other platforms. Here’s where we make things easy for you. Today, we’ve picked 10 of the most famous crypto terms to know for every beginner!
#1. HODL
The crypto sector has become a global phenomenon attaining wider prominence and usage. If you are familiar with investing in Bitcoin, chances are you’ve already come across the term HODL as it is widely used by Bitcoin investors.
The term is an abbreviation that stands for Hold On for Dear Life. The origin of this term dates back to 2013 when a massive price surge from January to December occurred. The surge resulted in the prices accelerating from $15 to more than $1,100.
On 18th December, China imposed a ban on third-party payment companies stating it would not engage in business with bitcoin exchanges. This led to a price drop of 39%, and the bitcoin price stood at $438. At this moment, a user in a bitcointalk forum announced that “I AM HODLING” in a post. The user had misspelled the word “Holding,” and this instantly became a popular term among investors when referring to the buy-and-hold strategy.
#2. Bearish/ Bullish Run
While holding onto cryptocurrencies is a good thing, strategizing to determine their price is a key too. This is where the terms bull and bear come into play. If you’re confident that the price of a coin you invested in is going to rise, you’d be considered bullish.
Now, if you’re not so confident in a coin’s price and analyze that its price is going to drop, you’d be a bearish trader.
A market whose price sees an increase is on a bullish run, while a market whose price witnesses a price decline is on a bearish run.
#3. FOMO
Another common term among crypto investors is FOMO. The term is an acronym for Fear Of Missing Out. Traders often use this term to express their anxiety about missing out on a potential investment. FOMO is a major contributor to price variations. To give an example: an investor might face FOMO when the prices of a coin that they do not own increase in value.
This feeling brings a sense of urgency as a trader might miss out on a lucrative opportunity.
#4. Altcoins
Bitcoin is practically the face of the crypto market since it began a new model of digital currency. Therefore all other cryptocurrencies that emerged after Bitcoin are called Altcoins – from alternative + coins. Altogether, all digital assets other than Bitcoin fall into the category of an altcoin. However, there are also subcategories within altcoins.
#5. Buy the Dip
We all know that the crypto market is quite volatile and the prices of all digital assets keep fluctuating. Therefore, there comes a time when a potential cryptocurrency ‘dips’ in its market price. This is termed a good opportunity for traders to buy. Hence, this idea made the phrase buy the dip prominent in the crypto space.
Technically speaking, it’s to purchase a cryptocurrency while its price is low and crypto traders can avail a particular coin at a better value.
#6. Staking
As a cryptocurrency trader, you may have heard the term staking often. It essentially means to validate transactions on a blockchain network by users. To do this, traders need to lock some of their assets to support the network and verify or confirm the transaction. In simpler terms, staking is a method to add new transactions to the crypto network.
Staking is offered in a Proof of Stake (PoS) model, which is more energy-efficient than mining with the Proof of work model (PoW).
By doing this, cryptocurrency traders get rewards for their holdings.
#7. Fork
This is a protocol diversion in the blockchain of a digital asset. It can also be defined as a radical development within the network or coding. This spill converts the entire blockchain into major parts:
Hard Fork
It’s the incompatible part of the split that consists of a new update in the nodes and does not accept the previous set rules.
Soft Fork
It’s the old or original version of the blockchain that is not compatible with the new updates. It’s programmed with the original rules.
#8. FUD
Fear, Uncertainty, Doubt. Those three words are what many new and timid investors face during their crypto trading careers. The slang acronym is used to convince investors to sell their coins, causing a price drop.
#9. Whale
A whale is any investor that has an abundance of capital. Thanks to their large buying position, whales can shift or manipulate the price of a coin all by themselves. These shifts, however, aren’t appreciated by investors all the time.
#10. To the Moon
This is quite probably the most fun one on the list. The phrase refers to a coin that is experiencing rises above all charts. To the Moon is a kind of celebratory term since they’re one of the reasons why a coin might witness massive hype.
Conclusion
In a nutshell, these were some of the popular and common terms or phrases that you’ll come across in the crypto space. If you are new as a cryptocurrency trader and would like to uplift your portfolio value, then it’s a must to get familiarized with all the technical terminologies. Let us know below which of these terms you like!
Frequently Asked Questions
Is Cryptocurrency Legal In India?
In India, cryptocurrencies are legal; anyone can purchase, sell, and trade cryptocurrencies. They are currently unregulated; India does not have a regulatory framework in place to regulate its functioning. According to the Ministry of Corporate Affairs (MCA), companies must now declare their crypto trading/investments during the financial year, according to the Ministry of Corporate Affairs (MCA). Cryptocurrency transactions have been taxable in India when people receiving such gains are Indian tax residents or where the crypto is considered to be domiciled in India
How Many Cryptocurrencies Are There?
There are over 5000 other digital currencies available on the internet in addition to Bitcoins. The only problem is that they haven't gotten the users' attention. Besides Bitcoins, a few other digital currencies have gained popularity among users. It's been more than ten years since Bitcoins were first released, and now they've achieved new heights thanks to their phenomenal success.
How To Invest In Cryptocurrency?
There are two ways of investing in cryptocurrency, mining and via exchanges. Cryptocurrency mining is considered the procedure of verifying and adding transactions to the blockchain public ledger. Another option is via cryptocurrency exchanges. Exchanges generate money by collecting transaction fees, but there are alternative websites where you can interact directly with other users who want to trade cryptocurrencies.
What Is Cryptocurrency?
A cryptocurrency is a digital currency secured by encryption, due to which chances of activities such as counterfeiting and double-spending taking place get close to impossible. Cryptocurrencies get created on blockchain technology ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are unique in that they do not get issued by any central authority. The term "cryptocurrency" comes from the encryption techniques used to keep digital currencies and the network safe.
How Cryptocurrency Works?
Cryptocurrencies use cryptography technology to keep transactions and their units (tokens) secure. Cryptocurrency works via a technology called the blockchain. A blockchain is a decentralized technology that handles and records transactions across numerous computers. The security of this technology is part of its value.
Which Cryptocurrency Is Best To Invest In 2021?
Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.
How Safe Are Cryptocurrencies?
Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed.There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
How To Invest In Cryptocurrency Stocks?
Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.
Is Pi Cryptocurrency Safe?
Pi Network (PI) is the newest digital token to catch the cryptocurrency community's interest, even before it has wholly debuted. Some users see it as a chance to get engaged in a cryptocurrency from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
