Just after knowing cryptocurrency or bitcoin, you may jump in to know more about it and find yourself in a place where everything seems so confusing and unclear. If you want to start bitcoin trading check the best bitcoin practices of all time. Yeah… that happened to every one of us!
Before you go on collecting data to invest your money in this new sensational trading market, go through the below terms to have a clear idea about bitcoins and its related factors. Read on to know further.
- Satoshi Nakamoto- Satoshi Nakamoto is the creator of crypto or the person behind the launch of bitcoin. However, the real identity of the person has never been disclosed.
- Cryptocurrency- Cryptocurrency is the first digital currency of the world. This is also a decentralized system that lacks the power of any third party.
- Bitcoin mining- it is the process using which the bitcoins come into the circulation. There are miners who solve complex mathematical puzzles. Every time they solve one puzzle, one bitcoin they get as reward and it gets added in the blockchain as a record.
- Blockchain technology- it is the open ledger where every piece f information of each bitcoin is recorded. Anyone with the access to a computer can see the records. Blockchain technology is the backbone of bitcoin.
- Peer-to-peer connection- Peer-to-peer is the connection using which one can send the bitcoin to others where they do not need any third-party involvement. Only the sender and receiver is involved here.
- Bitcoin exchange- bitcoin exchange is the place where one can both buy and sell bitcoins. You can take it as the traditional stock exchanges who traded only on fiat currency. In this, the medium of trade is both fiat money and cryptos.
- Wallet- again, think of the wallet in your bag or pocket. Why do you use it? To save the money you have, right? Well, bitcoin wallets are no exception and just a digital form of it. A digital wallet to store digital currency. It has primarily two types.
- Hot wallet- it falls under the types of bitcoin wallet. Hot wallets are primarily those that need constant internet connection.
- Cold wallet- another instance is cold wallet which does not require the internet connection and can be saved offline.
- Centralized exchange- Centralized exchanges are the crypto exchanges that have a third party involved who takes care of all the formalities. Also, the centralized exchanges are more secure because the central authority takes the responsibility of your crypto asset. They make everything secure from their end. One such centralized exchange which is also very popular and reliable is Bitcoin Era.
- Decentralized exchange- it is the type of exchange that has no central authority. Decentralized exchanges are operated by software’s. As you are on your own here, you need to make sure of your own security. However, the transactional fees are very less in this. It is also known as p2p exchanges.
- Stop loss- stop loss is the process that saves you from the volatility of the market. It is the process of setting the lowest price where your asset gets sold automatically if price drops to such an extent.
- Altcoin- Altcoins are anything other than bitcoins. Bitcoin was the first crypto. After that, many cryptos came in as an improvised version of bitcoin. Altcoin is the abbreviation of alternate coins.
- Bitcoin pizza- This is just the famous incident of one person buying two pizzas for 10,000 bitcoins many years back. Since then, the date is celebrated as Bitcoin Pizza Day. The incident will always be marked in the history of bitcoin.
- Bitcoin ATM- Bitcoin ATM is just like the traditional ATMs where you can cash out your bitcoins. The machine just needs the QR code to scan from your phone.
- Cryptography- it is the language that is used by the blockchain to get the encryption of every transaction in the distributed ledger.
- Distributed ledger– It is the blockchain technology where everything is in front of everyone. It is created in this way so that anyone can see any transaction from anywhere with the help of a computer.
Final Words
So, these were some important points to help you have an overall better understanding of the common terms in Bitcoin. Hopefully, these points also clear your doubts when you plan to trade in Bitcoin in the near future. Happy and secure Bitcoin trading!
