Cryptocurrency for Newbies: What Crypto Is, Types Available, and Other Terms You Should Know

By July 20, 2021DeFi
Click here to view original web page at www.techtimes.com

Cryptocurrency is a booming industry as of late and thousands of people around the world have been investing in it. You probably see news articles about it all the time, hear friends and family talk about it, and all that. All the crypto talk has probably piqued your interest.

It is no surprise, however, that when you do decide to dip your toes into the water that is cryptocurrency, you end up realizing that the water is a lot deeper than it seems. If you're going to choose to dive deeper into the world of cryptocurrency, you can't go unarmed.

Here's a guide on crypto terms that you should know to help you get started on your cryptocurrency journey:

Cryptocurrency: What is it Anyway?

Cryptocurrency
(Photo : David McBee from Pexels)

Cryptocurrency, otherwise known as crypto, is defined by Investopedia as "digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend."

That definition might raise another question. What is cryptography? Cryptography is defined as the practice of securing communication especially in the presence of third parties.

Cryptocurrencies make use of what is called blockchain technology. It is defined by Investopedia as "a distributed ledger enforced by a disparate network of computers."

If there's one thing that a crypto newbie should know about cryptocurrency, it's that it is not issued by a central authority, such as a country's central bank. This makes crypto immune to interference and manipulation, especially by the government.

Cryptocurrency has seen a continuous rise as of late, despite all the risks involved in crypto transactions.

Related Article: 'Ethereum vs. Bitcoin:' Ethereum Reaches $2,000 All Time High Record; Bitcoin Expects to Hit $80,000 by End of April

What are the Kinds of Cryptocurrencies?

Cryptocurrency
(Photo : Worldspectrum from Pexels)

There are different kinds of cryptocurrencies available these days and they are some of the most important crypto terms you should know. Some of which will be discussed in this guide. These cryptocurrencies can range from what Kraken classifies as payment cryptocurrencies such as Bitcoin to infrastructure cryptocurrencies like Etherium and even media and entertainment cryptocurrencies.

Binance Coin - Binance Coin is a type of payment cryptocurrency "associated with trading on the Binance Exchange," according to Investopedia. It is regarded as one of the "most widely used exchanges in the world."

Bitcoin - Bitcoin is regarded as the first ever cryptocurrency. According to TIME, bitcoins are regarded as the "most popular and highly valued." Those investing in Bitcoin should always take note of the fact they are highly volatile too.

Bitcoin Cash - Largely seen as an improved version of Bitcoin, it is an electronic cash system. Created in 2017, Bitcoin Cash allows people to easily send money anywhere.

Cardano - Cardano was actually created by one of the five founding members of Ethereum, Charles Hoskinson. This crypto makes use of a technology called Ouroboros, which TIME defines as a "peer-reviewed blockchain protocol."

Ethereum - Otherwise known as Ether, it is the cryptocurrency used by an open-source blockchain called Ethereum network that was created in 2013. Ethereum is considered the second largest in the market, behind Bitcoin.

Litecoin - While considered as similar to Bitcoin in many ways, Litecoin offers faster transaction times compared to Bitcoin. It was launched in 2011 by former Google engineer Charlie Lee.

Polkadot - Polkadot's main goal is to make interoperability among other blockchains possible by allowing them to transact with one another.

Tether - Tether is a kind of stablecoin whose main feature is its reduced volatility compared to other cryptocurrencies. Its price is tied to the US dollar.

USD Coin - According to the article by TIME, the USD Coin calls itself "the world's digital dollar." As its name suggests, this cryptocurrency is tied to the US dollar, which has made its price a lot more stable.

XRP - It is the currency of the Ripple network and was built to be used for digital payments.

Other Crypto Terms You Should Know

There are dozens upon dozens of crypto terms being used in the world of cryptocurrency. There are glossaries available online should you want to have an online dictionary of sorts for reference.

Here are some of the most important crypto terms you should know by heart if you want to get into cryptocurrency.

Address - Gemini defines address as "unique combination of numbers and letters that identifies accounts on a blockchain network." Cryptocurrencies are sent to and from an address.

Gas - Gas refers to the fee you have to pay when making a transaction on a blockchain.

Mining - The process of recording and verifying blockchain transactions.

Satoshi Nakamoto - It is the pseudonym used to refer to the person or group of persons who invented Bitcoin. The inventor/s identity remains unknown.

Wallet - A crypto wallet functions pretty much like an actual wallet. It is where cryptocurrency coins are stored. It can also send and receive coins as well.

Whale - Whale is the term used for an investor who owns such a large amount of cryptocurrency that he or she is able to influence its price. A popular whale is Elon Musk.

Also Read: Crypto Whales' Top 3 Coins 2021 | Why is Ethereum Still Their Number One?

This article is owned by Tech Times

Written by Isabella James

All Today's Crypto News In One Place