Crypto slang for dummies
For a newbie in the crypto space all the coins, terms and slang used by those who are invested in the space (practically a cult lets be honest) can often be confusing so lets go over some basic definitions:
-Mining:The term crypto mining means gaining cryptocurrencies by solving cryptographic equations through the use of computers. This process involves validating data blocks and adding transaction records to a public record (ledger) known as a blockchain.
-stake/staking: Cryptocurrency staking refers to “locking up” a digital asset to act as a validator in a decentralized crypto network to ensure the integrity, security and continuity of the network. As an incentive for helping to secure the network, stakers (validators) are rewarded with newly minted cryptocurrency.
-Token or coin: The two most common blockchain-based digital assets are cryptocurrencies and tokens. The biggest differentiation between the two is that cryptocurrencies have their own blockchains, whereas crypto tokens are built on an existing blockchain.
-Proof-of-Work(PoW):The most famous Proof-of-Work cryptocurrency is Bitcoin. Miners deploy their computer hardware to solve computationally-intensive mathematical problems and ensure that all transactions are valid. Miners are compensated for their work with the cryptocurrency they are mining – for example, Bitcoin miners earn BTC.
-The Proof of Stake (PoS): concept which states that a person can mine or validate block transactions according to how many coins they hold. This means that the more coins owned by a miner, the more mining power they have.
-Shitcoin:The term shitcoin refers to a cryptocurrency with little to no value or a digital currency that has no immediate, discernible purpose. The word is a pejorative term often used to describe altcoins or cryptocurrencies that were developed after bitcoins became popular.
-DeFi/ decentralized finance:Decentralized finance (commonly referred to as DeFi) is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum.
-Liquidity mining: also known as yield farming, is the act of providing liquidity via cryptocurrencies to decentralized exchanges (DEXs). Since the primary goal of an exchange is to be liquid, DEXs seek to reward users willing to bring capital to their platform.
-Dip (less a crypto term and more of a trading term):When an investor buys an asset after a drop, they are buying at a lower price, hoping to profit if the market rebounds. Some traders say they are "buying the dips" if an asset drops within an otherwise long-term uptrend.
-cryptocurrency wallet: is an app that allows cryptocurrency users to store and retrieve their digital assets. As with conventional currency, you don't need a wallet to spend your cash, but it certainly helps to keep it all in one place.
-Exchanges:A crypto exchange is a platform on which you can buy and sell cryptocurrency. You can use exchanges to trade one crypto for another — converting Bitcoin to Litecoin, for example — or to buy crypto using regular currency, like the U.S. Dollar. Exchanges reflect current market prices of the cryptocurrencies they offer.
-Bull, Bear, Bull run: A “bull” by definition is an investor who buys shares because they believe the market is going to rise; whereas a “bear” will sell shares as they believe the market is going to turn negative.A bull market, also known as a bull run, is a long, extended period in the market when stock prices are on the rise.
-Pump and dump: denoting the fraudulent practice of encouraging investors to buy coins in order to inflate the price artificially, and then selling one's coins while the price is high. WARNING- a lot of youtubers and influencers do this so before you invest in something do your own research.