Published on July 18th, 2020 | by gareth0
Top 5 Terms You Need to Be Aware of Before Investing in Cryptocurrencies
Are you new to the crypto market? Do you want to earn money by investing in cryptocurrencies? Then, you need to get familiar with the crypto space by learning about it. The best way to learn about the crypto market is to start with the basic terminologies related to the market. Once you came to know about the terms then you can invest in the market easily.
In this article, I am going to share the most important terms of the crypto market. Read on to understand the terminologies before you start investing. Even though there are many terms that you will encounter once you enter the market. But the following five words are great to start with your journey.
The cryptocurrencies are created using blockchain technology. In this technology, each block contains information about its previous data block. The data stored in the previous block are used to continue the chain. The data blocks are sequentially placed after one another by organizing data into blocks by blocks, which is secured and timestamped by strict cryptographic rules. So if anything happens to the data in any portion of the chain, it may break and erase all the further data. Hence it is impossible to hack the data by entering the middle.
In this network technology, the data are not dependent or stick to the central commands. Each node may function as a single authority and decides how to interact with other systems. There is no central body that can authorize or approve transactions inside the network. So every member of the network has the same authority. Blockchain technology is based on a decentralized network for which it allows different transactions can be made over a distributed network.
The crypto wallet is where you store your cryptocurrencies. As cryptocurrency is not a physical or tangible coin or not like real currencies, you need to store them in a device. Mainly there are two types of crypto wallets such as software wallets and hardware wallets. The software wallet is again categorized into three types desktop wallet, mobile wallet, and web wallet.
Desktop Wallet; A desktop wallet is a simple desktop application where you can store your crypto coins with the help of a security key. The only problem with a desktop wallet is you can’t take the desktop everywhere with you.
Mobile Wallet: The above problem can be solved with the help of a mobile wallet. You can just download a mobile application where you can store and transact your crypto coins via the mobile app. The benefit of a mobile wallet is you can access your wallet from anywhere you want.
Web Wallet: You can access a web wallet from mobile as well as from the desktop. Because you can access your wallet from a simple browser. But this type of wallet is vulnerable to cyberattacks so be extra careful while using a web wallet.
Hardware Wallet: The hardware wallet is the safest wallet among all the wallets. This is a physical wallet like a small device that can be connected to a computer through a USB port. You have to buy this wallet with some amount.
Many people misunderstand that a crypto exchange as a crypto wallet. But a crypto exchange is a platform where you can exchange your real money with cryptocurrencies. You can also get access to the crypto market through the crypto exchange where you can trade or invest in a crypto exchange. Be extra careful while you chose your crypto exchange.
One of the important terms you will find in the crypto market is “volatility”. In general, volatility refers to the price fluctuations of an asset. The specialty of the crypto market is that the price of cryptocurrencies always fluctuates which made them suitable for trading. So it is important to learn about volatility. The more the volatility the better chance to earn more money.
Well, there are many other terms related to the cryptocurrency market but the above are the top five terms that you should know before you start investing. After you enter the crypto space you will frequently come across these terms. So better you get familiar with the above terms in advance. Once you get familiar with the crypto market you can trade using bitcoin-superstar which is a trading bot that allows automatic trading. Hopefully, the article has provided you with important terms related to the crypto market.