Guest Post

7 Important Crypto-Trading Terms to Know

Written by: Coinpedia

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Coinpedia

Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

    Dec 19, 2021

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    During your time as a crypto trader and investor, you will come across a number of different complex terms and jargon. Understanding these terms will go a long way in helping you comprehend how the crypto universe works, and, consequently, make the most out of your trading activities. 

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    In this blog, we will cover the most essential crypto trading terms to know, especially for those who are just stepping into the world of digital currencies. 

    Important Crypto-Trading Terms to Know:

    1. Altcoin: 

    This term essentially refers to any digital coin or currency other than Bitcoin. As more and more digital coins popped up and tried to modify and refine the Bitcoin code, the term ‘Altcoin’ continued to become popular. Today, it is frequently used by traders, investors, and other experts across the crypto community. 

    1. Coin:

    Whenever you hear someone in the crypto space mention the term ‘coin’, you can rest assured that they are referring to a specific cryptocurrency. Every unique coin operates on one particular blockchain, just as Ether or Bitcoin. The term ‘coin’ is also often used interchangeably with the term ‘token’.

    1. Crypto wallet:

    Crypto wallets are digital wallets used to serve cryptocurrencies. These wallets serve two primary purposes:

    • They help ensure that the digital currencies are stored in a more secure environment, away from the reach of hackers. 
    • They allow the users to spend/trade/invest the stored coins. 
    1. Digital contract:

    As the term suggests, a digital contract is a kind of agreement. This agreement is created through the blockchains, and the parties signing the contract use digital ledgers for confirming the related parameters. In other words, the blockchain functions as a third-party and verifies this digital contract before executing payment requests. 

    1. Private key:

    A private key can be thought of as the user password for any coin that you purchase. Whenever you buy a digital currency, you get a couple of keys: one is the public key, while the other is private. The private key is quite similar to a personal signature, which means that only you will be aware of this key. The private key is extremely important as losing this key might cause you to lose all the coins that you have purchased. 

    1. Public key:

    The public key is the identifier used by the blockchain to ensure the existence of your crypto on the network. The private key, as discussed above, is responsible for the derivation of the public key. It lets the blockchain community know that you are the owner of the coin and, therefore, possess the right to either spend or sell the coin as you see fit. 

    1. Tokens:

    As we mentioned earlier, the terms ‘token’ and ‘coin’ are often used interchangeably. Having said that, there is a slight difference between these two terms. A token represents an asset or a value of something. The representations can vary, from representing a number of digital coins, a unit of silver or gold, or even loyalty points. It is important to note that the tokens are developed using third-party blockchains such as Ethereum, and do not operate on their own blockchains.

    Final Word:

    To sum up, an understanding of the basic crypto terminology will make the start of your investment journey a lot smoother and more seamless, and we hope that this blog will help you in that regard. If you are interested in knowing more about how cryptocurrencies, such as Bitcoin and Ethereum work, or if you feel that you are ready to begin your trading journey, please feel free to use platform  like the immediate bitcoin app

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    Coinpedia

    Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me: [email protected]

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