As it is known, a revolution is taking place in the financial world with cryptocurrencies. Cryptocurrencies have been attracting a great deal of attention lately, both with the innovations they bring to the traditional finance world and the earning opportunities they provide to investors who want to diversify their investments.
Considering that these markets are high-risk and highly volatile (volatile), there are some basic concepts that investors and investor candidates who want to direct their investments to cryptocurrencies should know.
Let’s start with the person behind the crypto revolution: Satoshi Nakamoto
The true identity of this person, known as the creator of Bitcoin and officially revolutionizing the financial world, is still unknown today.
- Cryptocurrency: It is a virtual currency technology that exists with blockchain technology and has no physical form.
- Blockchain: It is a kind of decentralized ledger that contains the record of all transactions made in the form of added blocks. Blockchain irreversibly records transactions made with distributed ledger technology and makes the recorded data available to everyone, eliminating the need for a central authority.
“Bitcoin” is the first cryptocurrency that emerged in 2009.
- Altcoin: The name given to cryptocurrencies other than Bitcoin, which means alternative coin.
- Stable Coin (Stablecoin): It is a type of crypto currency created to reduce the volatility in prices and its value is indexed to another currency such as the American dollar.
- Shitcoin: The name given to crypto assets that have no use, low value and high probability of failure.
- Memecoin: It is a type of coin that has no intrinsic value and purpose and is used only for humorous purposes.
- Token: Tokens, on the other hand, are cryptocurrencies that do not have a blockchain network of their own and are created using the blockchain of other cryptocurrencies.
- NFT: It stands for “non-fungible tokens” (non-tradable tokens) and is the name given to digital assets that are each unique and therefore cannot be exchanged with each other.
“Mining”, on the other hand, is a kind of cryptocurrency.
- Mining: The process of validating transactions on the blockchain network by solving complex mathematical problems, performed by people seen as network participants. The people who make this transaction are called “miners” and they usually get paid with a certain amount of crypto money in return for the transactions they approve.
- Staking: It means locking your cryptocurrencies for a certain period of time in order to support a certain cryptocurrency network. Investors are rewarded with more coins during the process of staking their coins.
- Airdrop: Blockchain-based projects give free cryptocurrency.
- Initial Coin Offering (ICO): ICO, short for “Initial coin offering”, is the first launch of a cryptocurrency to fund a blockchain-based project.
There are two types of wallets where you can store your crypto assets: “hot wallet” and “cold wallet”.
- Cold Wallet: Basically a USB stick, cold wallets allow crypto assets to be stored offline. It is a recommended and safe storage method due to its protection against the risk of hacking.
- Hot Wallet: It is a type of cryptocurrency wallet that can be accessed online.
The concepts of “bear” and “bull” are the leading concepts for movements in the markets.
- Bear Market: It is the name given to the market where the prices go down.
- Bull Market: It is the name given to the market where prices are on the rise.
- Inflate (Pump): It is a sharp upward trend in the price of assets.
- Dump: It is a sharp decrease in the price of assets.
Cryptocurrency exchanges are digital platforms that allow investors to buy and sell.
Unlike traditional exchanges, cryptocurrency exchanges only allow the trading of crypto assets. Various transactions can be made on these exchanges as follows.
- Order: It is the general name given to the buy or sell commands given to trade on the stock exchanges.
- Limit Order: It is the order in which the investor determines the maximum and minimum price for the realization of the buy and sell order to be given while trading with a crypto asset.
- Derivatives: These are transactions that are mostly realized between two parties and are made for the prediction of the future price of an asset, based on the future value of the investor. Let’s point out that derivative products can bring high returns, as they are very high risk transactions, they can also bring huge losses, especially when used only for estimation without relying on technical or fundamental analysis.
To ensure the security of your account and information, it is useful to know these concepts:
- Two-factor Authentication (2FA): A method that uses two different components to authenticate the user. Usually, applications such as SMS 2FA and Google 2FA are used in addition to the password.
- Anti-Phishing Codes: With the codes created to prevent fraud attempts known as phishing, which manipulate users to obtain passwords and similar information, you can be sure that the e-mails sent to you really come from the institution in question. If the incoming mail contains the code specially created for you, there is nothing to be afraid of.
- Whitelist: It is a security measure that you can use on exchanges or in your crypto wallet, which allows withdrawals from your address only by designated accounts and requires two-factor authentication to disable it.
These concepts, which are frequently used, are the jargon of crypto money investors.
- ATH: ATH, which stands for “all time high” and stands for “all time high”, is used to indicate that a cryptocurrency is at its highest price level in its history.
- BTD: Short for “Buy the dip”, BTD means to buy a cryptocurrency at the cheapest price.
- DYOR: The abbreviation from the initials of the sentence “Do Your Own Research” means “do your own research”.
- To the Moon: “To the Moon”, which means “to the moon”, is used to express that the price of a cryptocurrency will go up a great deal.
- Whale: The name given to investors who hold a large amount of crypto assets.
- Fear of Losing (FOMO): Known as FOMO, “Fear Of Missing Out” means that traders impulsively rely on other traders’ trades without relying on analysis and logic, for fear of missing out on a better outcome.
- FUD: “FUD”, which consists of the initials of the words “fear, uncertainty and doubt”, which means fear, uncertainty and doubt, is the reason investors get caught up in the aforementioned emotions due to the news spreading about the market. It usually causes prices to drop due to investors’ selling.
- HODL: As a result of a typo made by an anonymous user by typing “hodl” instead of “hold” in a forum, the word “hodl” is used instead of the word “hold”, which means “to hold” among cryptocurrency investors.
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