Like other businesses, it is worthwhile to do due diligence before committing to crypto investment. Conducting thorough research on cryptocurrency will widen your perspective and approach on the investment side of it. No investment decision should be made lightly or without a lot of research and knowledge.
Understanding the basic terminologies used during this entire process is very important. The knowledge of these terms used in cryptocurrency will provide a strong foundation for potential investors. This article covers terms you ought to know before investing in cryptocurrency.
Bitcoin
It is one of the most popular terms used in cryptocurrency. This is a digital currency with no central administration. It can be exchanged between the investors without the intermediaries. It is the most valuable digital currency. However, the value of Bitcoins fluctuates due to the volatility of the market.
Bitcoins are obtained through a process of mining, and the maximum supply of Bitcoins is 21 million. Mining can be done by anyone with the necessary equipment and knowledge.
Altcoin
These are any other coins used in cryptocurrency that are not Bitcoin. The increased activities of cryptocurrency saw the rise of the second most valuable digital currency. Altcoins employ blockchain technology to provide investors with secure end-to-end transaction channels. There is a broad spectrum of available Altcoins online.
Bitcoin Mining
You might have come across this term in cryptocurrency conversations. It is simply the process of obtaining or creating new Bitcoin by solving a complex computational problem using high-powered technological devices. Miners have adopted new improvised methods like complex machinery to boost the mining process.
Cold Wallet
To provide a more secure method of storing cryptocurrency, miners use the cold wallet. It is an offline device that is not prone to network hacking or theft on the network. They resemble USB drives. However, using a cold wallet can be troublesome. In addition, there are a variety of wallets available for the miners, either hot or cold.
New terms keep popping up as the cryptocurrency industry grows. You need to verse yourself with them to continue trading efficiently. The cryptocurrency field is very dynamic, requiring all people in the field to keep updating their knowledge banks.