For BTC investors, it is essential to understand the terms associated with Bitcoin and cryptocurrencies. This article will provide you with all the most popular terms before starting to trade.
Address: Similar to email addresses, bitcoin addresses are a freely generated string of 27 to 34 characters which are used to receive and send bitcoins.
Altcoin (Alternative Coins). The term refers to coins other than Bitcoin. Bitcoin was the first cryptocurrency in the world. The altcoins born after that are mostly built on the foundation of Bitcoin, overcoming the shortcomings that Bitcoin encountered.
Bitcoin: A cryptocurrency that uses peer-to-peer technology to facilitate payments. The number of bitcoins created is "limited", only a maximum of 21 million BTC, which ensures its value does not diminish over time. Users store BTC in a crypto wallet.
BTC: BTC is the taker of bitcoin. Also, bitcoin has others such as XBT or ₿
Blockchain: is a technology that creates cryptocurrencies such as Bitcoin, Ethereum, and many others. Blockchain is a decentralized database, which stores information in blocks linked together by encryption algorithms and can expand over time.
Block: Data has permanently stored in the Bitcoin network thanks to the Block. A block contains transaction information that has not been previously stored. The blocks are linked together as strings. On average every 10 minutes, a new block is verified, containing the latest transactions.
Cold Storage: Used to store bitcoins offline. This wallet doesn't need an internet connection. For example USB, paper wallet ...
Dump: Dump is the status when small investors sell whole their coins. Consequently, after each sell-off, the price of coins will drop a lot.
Exchange is where users place orders to buy, sell and trade coins or tokens such as Bitcoin, Ethereum, Litecoin, Ripple, ... to other currencies.
FOMO (Fear Of Missing Out): FOMO is an emotional syndrome. For example, you invest in bitcoin and you read a news story, and many people feel that news can help bitcoin growth, then they decide to buy that bitcoin without hesitation.
It is FOMO's psychology that makes your mind no longer lucid and judicious based on emotions rather than rational.
Hardfork (HF): is an algorithm change that makes previously invalid blocks valid and vice versa. HF makes a complete difference from the previous version of Blockchain. And the new version will no longer be accepted on older blocks.
Halving: For every 210,000 blocks, the reward for mining a new bitcoin block is halved.
Hash Function: A computer algorithm will produce a fixed result based on certain data. It will be very difficult and almost impossible to reverse the results from the original data.
KYC (Know your customer): is a method of verifying the identity of users on the exchanges.
2FA (2-Factor Authentication): is an account authentication method through a third party, which helps your account be more secure. Even if a hacker knows your account information (including a password) without the 2FA code they won't be able to access your account.
Mining: The act of using the power of computers to solve security problems on the bitcoin network. For every block that is solved, the organization or individual will receive some bitcoins and a small transaction fee.
Private Key: The private key is stored in the wallet.dat file. So backing up this file is very important. If your hard drive fails or accidentally deletes the file, your bitcoin will be lost.
Public Key: A form of data that is made public. In this case, the public key is the bitcoin address.
Paper Wallet: Method of storing bitcoins offline on a physical piece of paper
Pump: Pump is a term for a certain coin that is trending upwards with an unusually high number of purchases. Typically, Pump happens when the shark appears and wants that coin to go up, attracting small investors to join.
Reward: the organization or individual is awarded several bitcoins. Currently, the reward is 25 bitcoins and this number will be halved every 210,000 blocks.
Satoshi: is the smallest currency unit of Bitcoin. 1 BTC is equivalent to 100,000,000 Satoshi. This unit is named according to the founder of Bitcoin.
Satoshi Nakamoto: Satoshi Nakamoto was the founder of Bitcoin in 2009. Satoshi Nakamoto is only a nickname of a person or an anonymous group of people, it is still unclear the identity of the founder of bitcoin.
Transaction: A term used to describe the number of bitcoins sent from one wallet address to another.
Transaction Fee: A fee you must pay to complete Bitcoin transactions. The normal transaction fee is 0.0001 BTC.
Wallet: A cryptocurrency wallet used to store cryptocurrencies. It can be a program downloaded and installed onto your computer or smartphone.
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➤ Learn more: Top 10 Easiest Ways To Make Money With Bitcoin In 2020