10 Most Important Crypto Terminology for Beginners

Sonic Team

Date of publishing : Feb 20, 2023 , 10:00 AM
10 Most Important Crypto Terminology for Beginners

For newbies, crypto might be intimidating. You're not just striking new financial ground; it also appears that every influencer on the internet is using crypto jargon.

Understanding the basic words that govern the cryptocurrency industry is crucial before you start investing in cryptocurrencies. Here is the official cryptocurrency glossary for all crypto newcomers, covering everything from blockchain to bulls to the legendary HODL.

Here are 10 cryptocurrency terms for beginners

What is an Altcoin?

The term "altcoin" refers to all currencies that are not Bitcoin (BTC), with "alt" standing for "alternative" and "coin" standing for "cryptocurrency." The emergence of altcoins was followed by the launch of second and third-generation blockchain-based crypto assets such as Litecoin (LTC) and Ether (ETH).
Invest in Popular altcoins on Sonic Wallet .

What is a DAO?

A DAO (decentralized autonomous organization) is a group without centralized command. Decisions are made bottom-up by a community centered around a certain set of regulations that are implemented on a blockchain. A community focused on a particular set of rules that are put into place on a blockchain makes decisions bottom-up. DAOs are online businesses that are co-owned and operated by their users.

What is DLT?

The phrase "Distributed Ledger Technology" (DLT) refers to the technological architecture and protocols that enable concurrent access, record authentication, and immutable record upgrading across a network that is spread across several companies or locations.

DLT, generally referred to as blockchain technology, was first used in Bitcoin and has since gained popularity in the technology industry because of its potential in a variety of fields and businesses.

What is a Dapp?

Decentralized apps, or DApps, are smart contract-enabled blockchain-based iterations of apps made popular by the Ethereum network. They behave just like conventional apps but offer a considerably wider range of features.

A new method of connecting with personal finance is represented by DApps. Many people saw cryptocurrencies and blockchain as being the face of the future of finance .

What is fiat currency?

The fiat definition is simple to understand: The term "fiat money," usually referred to as "fiat currency," describes money that is issued by governments and central banks. Examples of fiat currency include the US dollar, Chinese yuan, and peso. Fiat is a centralized type of money that is, for the most part, bound to the borders of each nation and is controlled by governments. Bitcoin (BTC) is not fiat money and is different in its design and management.

What is Bitcoin halving?

The Bitcoin halving, often known as "the halvening," refers to one of the heavily hyped events in Bitcoin history.
According to Michael Dubrovsky, co-founder of PoWx, a charity dedicated to cryptocurrency research, "theoretically, if miners have less to offer, there would be less bitcoin available to buy."

Through the efforts of "miners," who use expensive computer equipment to earn, or "mine," bitcoins, new ones enter circulation as block rewards. The total amount of bitcoin that miners could win is half every four years.

What is a lighting network?

The Lightning Network is a Bitcoin scaling solution. The Bitcoin Lightning Network functions as a layer-two transaction network with payment channels distinct from the main blockchain of Bitcoin, with the settlement of transactions ultimately occurring on the main blockchain.

Bitcoin's on-chain transaction rate is only about seven per second, compared to other popular credit cards that often handle more than 1,000 TPS. Compared to on-chain transactions, Bitcoin transactions using the Lightning Network frequently have lower fees. The Lightning Network has given Bitcoin more adaptability amid rising usage.

What is an NFT?

NFTs, or nonfungible tokens, are blockchain-verified digital assets with characteristics including originality and non-interchangeability. They may be incorporated into pretty much any field, but blockchain-based art, music, and video games are where they are most frequently observed. Young artists are realizing that, as opposed to previously releasing their work at no cost or offering it cheaply, they can make money off their abilities by leveraging blockchain technology and NFTs.

Despite being made popular in 2017 by the decentralized application (DApp) CryptoKitties, which enables users to buy, sell, and accumulate virtual cats, non-fungible tokens are still in their infancy.

What is Web3?

Web 3.0 is a possible future version of the internet based on public blockchains, a record-keeping technology best known for permitting cryptocurrency trades. Web 3.0 is appealing because it is decentralized, which means that users will not access the internet through services provided by internet businesses.

Web 3.0 does not require "permission" or "trust," which implies that central authorities cannot control who has access to what services. Additionally, virtual transactions between two or more parties can happen without the need for a middleman.

What is To the Moon?

The phrase "to the moon" refers to a crypto asset that is on a strongly rising trend. Slang for "aggressive bull rally," this phrase is used to characterize the performance of digital currencies that are in the midst of one. It was originally used in the budding cryptocurrency investment community in 2017 when Bitcoin (BTC) saw its price jump by roughly 20x in a year.

The expression "to the moon" is one of several slang expressions that are well-liked among cryptocurrency investors. It can also mean that early investors are beginning to see some returns on their investments.

These are the basic crypto terminology used in the market, if you want to learn more about cryptocurrencies don’t forget to check out our Blogs.

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