21 Cryptocurrency Terms For Beginners

Cryptocurrency is an exciting technology that has been gaining in popularity over the last few years. It can be quite confusing for beginners to understand all the terminology associated with it, such as blockchain, tokenomics, NFTs, hybrid tokens, Defi, DApps, whitepaper, CBDCs, Digital wallet e.t.c. This article explains must know 21 cryptocurrency terms for beginners in an easy way to understand. By understanding these terms and their applications you will be better prepared to enter into the world of cryptocurrency trading.

21 Cryptocurrency Terms For Beginners

1. Blockchain:

It is a distributed ledger technology that enables secure and transparent transactions between multiple parties. It eliminates the need for physical documents, contracts, and intermediaries, making it easier and more cost-effective to transfer assets. it provides the underlying infrastructure for which cryptocurrency is built.

2. Cryptocurrency:

Cryptocurrency is a digital currency in which transactions are verified and records are kept by a decentralized system rather than a centralized authority, using cryptography. There are four major categories of cryptocurrency- Payment Cryptocurrencies, Tokens, Stablecoins, and Central Bank Digital Currencies.

3. Whitepaper:

 A whitepaper is a document that provides detailed information about a cryptocurrency or blockchain technology. It typically includes technical specifications, economic models, and other relevant information about the project. Whitepapers are used by developers and investors to understand the underlying technology of a cryptocurrency or blockchain project and its potential applications. also provide an overview of the project’s goals, objectives, and strategies for achieving them.

Click to read JPGold Coin Whitepaper

4. Bitcoin:

Bitcoin is a type of digital currency that is created, stored, and used electronically. It was created in 2009 by an unknown person or group of people using the alias Satoshi Nakamoto.

Bitcoin has grown to be one of the most popular cryptocurrencies in the world, with its value increasing significantly over time and a market capitalization of $458 billion. There can only be 21,000,000 BTC in circulation, only 18.9 million have been so far.

5. Ethereum:

Ethereum is an open source, public blockchain-based distributed computing platform. It provides a decentralized virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum is used for decentralized applications (Dapps) and smart contracts that run on the EVM.

While Bitcoin is designed to be a digital currency, Ethereum was designed to be a platform for running applications and smart contracts. Additionally, Ethereum has its own programming language called Solidity which allows developers to create their own decentralized applications and smart contracts on the platform.

6. Wallet:

A cryptocurrency wallet is a digital wallet that stores, sends and receives digital assets such as Bitcoin, Ethereum and other cryptocurrencies. It is important to have a crypto wallet in order to securely store your digital assets. There are two types of wallets: hot wallets and cold wallets. Hot wallets are connected to the internet while cold wallets are not connected to the internet and provide more security for your funds.

In order to get a crypto wallet, you need to find an exchange or wallet provider that supports the cryptocurrency you want to use. You will then need to create an account with them in order to access your wallet. After creating an account, you can start sending and receiving cryptocurrencies from other people or exchanges around the world!

7. Exchange:

Cryptocurrency exchanges are platforms that allow users to buy, sell and trade digital assets like Bitcoin, Ethereum, and other altcoins. These exchanges provide a secure and convenient way to access the crypto market. They offer features such as margin trading, order types, cold storage wallets, and more. Some of the most popular ones include Binance, Coinbase Pro, Kraken, Bitstamp and Bitfinex. Each exchange has its own set of rules for signing up and trading on their platform.

8. Decentralize Applications (DApps):

These are applications that run on a distributed network of computers instead of a single computer. DApps can be used for a variety of purposes, ranging from finance and gaming to social media and data storage. Examples of popular DApps include Bitcoin, Ethereum, MakerDAO, Augur, Brave Browser, and many more. By using these applications, users can enjoy the benefits of decentralization such as increased security and privacy as well as improved scalability.

9. Gas Fee:

Gas fee is a term used to describe cost of transaction users pay whenever they perform a buying/selling function on blockchain. It is usually paid in ether (ETH).

10. Tokens and Coin:

Tokens are digital assets that can be used to represent different types of value. They are created on top of existing blockchain networks and can be used for a variety of purposes such as representing ownership, voting rights, or access to certain services.

Tokens are different from coins in that they do not have their own blockchain and instead rely on an existing one. Coins, on the other hand, have their own blockchain and can be used as a form of payment or store of value. Also, tokens tend to be more specialized than coins and are often designed for specific use cases such as loyalty programs or crowdfunding campaigns. The JPGold Coin physical gold certificate is issued as Nom Fungible Tokens; The JPGC is a crypto coin.

11. Transaction ID:

A transaction ID (or TXID) is a unique identifier used to identify a cryptocurrency transaction. It is generated when a transactiony is broadcasted to the blockchain network and acts as a proof of the successful completion of that particular transaction. The TXID can be used to verify that the funds were sent from one address to another and can also be used to check the status of transactions, including whether it’s been confirmed or not.

12. DeFi: 

Decentralized Finance (DeFi) is a rapidly growing sector of the cryptocurrency industry that enables users to access financial services without relying on third-party intermediaries. This means that users can access services such as lending, borrowing, trading, and investing without having to go through a traditional financial institutions.

DeFi applications are built on top of blockchain networks and are powered by smart contracts. Examples of DeFi applications include decentralized exchanges (DEXs), stablecoins, yield farming protocols, and insurance products. By utilizing these tools, users can access a wide range of financial services without having to trust a third party with their funds.

13. Altcoins:

An alternative digital money to bitcoin is called an altcoin. The term Altcoin is a composite created by combining the words “alternative” and “coin”. In actuality, it refers to a collection of cryptocurrencies, ultimately including all digital currencies besides Bitcoin. The JPGC is an altcoin listed on LAToken.

14. ICO and IEO:

Initial Coin Offering (ICO) and Initial Exchange Offering (IEO) are two popular fundraising models in the cryptocurrency space. ICO refers to the issuance of a new digital currency or token to investors in exchange for funds, while IEO involves the sale of digital assets through an exchange. IEOs have advantages over ICOs as they provide greater transparency and security, as well as a larger pool of potential investors.

However, both ICOs and IEOs have their drawbacks, including the potential for scams and regulatory uncertainties. It is important for investors to conduct thorough research and due diligence before investing in either model.

15. Bearish and Bullish:

A bearish market in cryptocurrency refers to a period of time when the overall sentiment of the market is negative and the prices of cryptocurrencies are falling. This may be caused by various factors such as FUD (fear, uncertainty, and doubt), government regulations, negative news, or a general lack of demand for cryptocurrencies.

In a bearish market, investors tend to sell their assets to take profits, and this may cause further downward pressure on prices. On the other hand, a bullish market in cryptocurrency refers to a period of time when the overall sentiment of the market is positive and the prices of cryptocurrencies are rising.

This may be caused by various factors such as positive news, increased adoption, booming demand, or new regulatory frameworks that foster innovation in the cryptocurrency space. In a bullish market, investors tend to buy and hold their assets in anticipation of further price increases. This may cause further upward pressure on prices as demand increases.

Overall, it is important to note that the cryptocurrency market is highly volatile and can fluctuate rapidly between bearish and bullish trends. Hence, it is crucial for investors to remain vigilant and informed about market trends and events that may impact the value of their assets.

16. KYC: 

KYC stands for “Know Your Customer” and refers to the process of verifying the identity of customers in order to comply with anti-money laundering (AML) laws and regulations. It is an important requirement for all cryptocurrency exchanges, wallets and other service providers because it helps prevent fraudulent activities and money laundering. KYC in cryptocurrency involves the collection and verification of personal information such as name, address, date of birth, and identification documents like passport or driver’s license.

17. NFT:

A non-fungible token (NFT) is a type of digital asset that will represents ownership of a unique item or piece of content. Unlike traditional cryptocurrencies, NFTs are not interchangeable with one another and each token has a distinct value and ownership. NFTs are often used to verify ownership and authenticity of digital collectibles, such as artwork, music, videos, and virtual real estate. Ituse blockchain technology to provide a secure and transparent record of ownership, making it easier for creators and collectors to validate the authenticity of their digital assets. NFTs can be bought and sold on various online marketplaces, with prices ranging from a few dollars to millions of dollars for rare and highly sought-after items. In summary, NFTs are unique digital assets that use blockchain technology to verify ownership and establish value in a transparent and secure manner. They have opened up new opportunities for creators and collectors in the digital world, and are rapidly gaining popularity in the world of art, gaming, and entertainment.

18. CEX and DEX:

CEX and DEX are two different types of cryptocurrency exchanges that exist in the digital asset space. CEX stands for “Centralized Exchange” and refers to a cryptocurrency exchange that is owned and controlled by a centralized entity. CEXs operate on a centralized server and use an order matching algorithm to match buy and sell. Some examples of CEX (Centralized Exchanges) are Binance, Coinbase, Kraken, Bitfinex, and Huobi. These exchanges are owned and operated by a centralized entity and often require users to go through a KYC (Know Your Customer) process to verify their identity before being able to trade on the exchange. Some examples of DEX (Decentralized Exchanges) are Uniswap, PancakeSwap, SushiSwap, and 1inch Exchange. Unlike CEXs, DEXs operate on a decentralized infrastructure, meaning that they do not rely on a central authority to facilitate trades.

19. Stablecoins:

Stablecoins are a type of cryptocurrency that is designed to maintain a stable value relative to a specific asset, such as a fiat currency like the US dollar or a commodity like gold. Stablecoins are often used as a means of payment, a medium of exchange, or a store of value, and are intended to reduce the volatility and price fluctuations associated with other cryptocurrencies such as Bitcoin. Stablecoins can be pegged to their respective assets in two ways: collateralized and uncollateralized. Collateralized stablecoins are backed by reserves of fiat currency, commodities, or other cryptocurrencies, while uncollateralized stablecoins rely on algorithms to maintain their price stability. Stablecoins offer several benefits, including increased stability compared to other cryptocurrencies, the ability to use them as a medium of exchange in transactions without exposing oneself to the risks associated with price fluctuations, and the convenience of transacting with digital currencies while avoiding the need for traditional banking services. Stablecoins have gained widespread adoption and are seen as a promising innovation in the cryptocurrency space, with many investors and businesses viewing them as a more reliable and secure way of conducting transactions in the digital economy.

20. CBDC and Fiat Currency:

CBDC (Central Bank Digital Currency) and fiat currency are two different types of currencies that exist in the modern economy. Fiat currency refers to traditional currencies that are issued by governments and are not backed by a physical commodity like gold. These currencies are legal tender and are widely used for transactions and as a store of value. On the other hand, CBDCs are digital currencies that are issued and backed by a central bank. Unlike traditional fiat currencies, CBDCs operate entirely on a digital platform, and transactions occur directly between parties without the need for a financial intermediary. CBDCs are still in the developmental stage, but are seen as a promising innovation in the digital economy, offering several benefits including faster transaction processing times, lower transaction fees, and increased financial inclusion.

21. Tokenomics:

Tokenomics is a term that refers to the study of the economics behind the creation and use of cryptocurrencies or digital tokens. It consists of various elements that determine the value, distribution, and use of tokens within a particular blockchain network. Tokenomics includes both the technical and the economic aspects of a token, and aims to create a sustainable ecosystem for the token and its users.

Click link to learnmore about JPGC Tokenomics.

These terms explained above are a credible beginners guide to cryptocurrency trading and investment.