The cryptocurrency world, with its unique terms and complex concepts, can be a great challenge for beginners. In order to be successful in this world and make informed decisions, understanding the basic terms provides a great advantage. As Cryptokeek, we offer you the ‘Glossary of Unknown Terms from the Crypto World’ to make this complex terminology more understandable. Our study contains important information not only for beginners, but also for experienced investors.
Blockchain
Blockchain is a distributed digital ledger that enables transparent and secure storage of data. Each transaction is recorded as a ‘block’ and these blocks are chained together in time order. This method makes manipulation almost impossible. The blockchain, which forms the infrastructure of Bitcoin, has revolutionised financial systems and brought innovations not only in cryptocurrencies but also in supply chain management, smart contracts and many other areas.
NFT (Non-Fungible Token)
NFT is a technology that proves that an asset is digitally unique. Digital assets such as artworks, collectibles, in-game assets, and even tweets can be sold as NFTs. Each NFT is registered on the blockchain, making it unique and unalterable. NFTs offer artists the opportunity to protect the copyrights of their works and generate income.
Mining
Mining is a process that uses computer power to verify transactions on a blockchain network and create new blocks. Those who mine cryptocurrencies such as Bitcoin earn coins as a reward for these transactions. However, mining consumes a lot of energy and therefore its environmental impact is often discussed. It is especially common in systems that use the ‘Proof of Work’ (PoW) protocol.
HODL
HODL is derived from the phrase ‘Hold On for Dear Life’ and refers to investors holding their cryptocurrencies for the long term. The term was coined after a word accidentally typed in a forum post in the Bitcoin community became popular. The HODL strategy advocates selling despite price fluctuations and aims for long-term gains.
Whale
Whale, or ‘whale,’ refers to individuals or organisations that hold very large amounts of cryptocurrency. A whale’s purchase or sale transactions can significantly affect market prices. For this reason, the movements of whales are often followed when analysing the market.
Staking
Staking is a method of earning passive income by locking cryptocurrencies on a specific blockchain network. In networks operating with the Proof of Stake (PoS) mechanism, staking users contribute to the security and transaction accuracy of the network. Staking requires less energy compared to mining and has become a popular option for investors.
Gas Fee
Gas fees are fees paid for the verification of transactions on blockchain networks such as Ethereum. These fees vary depending on the complexity of the transaction and the density of the network. Gas fees are given as a reward to miners or other users who verify transactions. Gas throughput can sometimes be very high due to network-intensive applications.
Rug Pull
Rug pull refers to when the developers of a project suddenly abandon the project and defraud investors. This usually happens when newly launched tokens or decentralised finance (DeFi) projects attract a lot of attention and investors, and then the developers disappear with the funds they have raised. Adhere to the DYOR principle to be wary of rug pull.
DYOR (Do Your Own Research)
DYOR stands for ‘Do Your Own Research’ and recommends that investors in the crypto world do their own research. Analysing the development teams, technological infrastructure and roadmaps of the projects will help you avoid fraudulent projects.
Conclusion
The crypto world is a rapidly growing ecosystem with new technologies and ideas. This glossary is intended to make you feel more comfortable in this complex world by explaining basic terms. As Cryptokeek, our goal is to increase the knowledge of both beginners and experienced traders. Remember, knowledge is power and use it effectively to succeed in the crypto world!