It can be difficult to navigate the world of cryptocurrency trading, especially if it is your first time. As a newbie, it is important to familiarize yourself with the terminology and language used in the industry. In this article we will explain the basics of Bitcoin trading and help you to understand some of the important cryptocurrency terminology.
The blockchain is a digital ledger, which is decentralized and records all cryptocurrency transaction. The blockchain records every transaction made using cryptocurrencies, such as bitcoin. The blockchain is responsible to make cryptocurrencies like Bitcoin secure, decentralized, & trustworthy.
Bitcoin was the first decentralized cryptocurrency introduced in 2009. It is the most popular cryptocurrency in terms of both market capitalization and adoption. You can trade Bitcoin on different cryptocurrency exchanges.
Altcoins include all cryptocurrencies which are not bitcoin. There are over 2,000 altcoins currently in circulation including Ethereum, Ripple Litecoin Bitcoin Cash.
A cryptocurrency wallet is an application that stores private and/or public keys, and interacts with different blockchains so users can send and receive cryptocurrencies. There are many types of cryptocurrency wallets including desktop, mobile and hardware wallets.
A cryptocurrency exchange platform allows users to purchase and sell cryptocurrencies. Coinbase Binance and Kraken, for example, are examples of cryptocurrency trading platforms.
Fiat currency is government-issued currency. Fiat currencies include the US Dollar and the Euro.
Market cap or market capitalization is the total value a cryptocurrency. Calculated by multiplying each coin’s price by the total number in circulation.
The trading volume is the total number cryptocurrencies that were traded during a certain period. It is a measurement of the liquidity and activity on the cryptocurrency market.
Bid and ask
The bid and ask price are the prices that buyers and seller are willing to pay for a particular cryptocurrency. The bid is the maximum price a buyer will pay for a cryptocurrency. The ask is the minimum price a seller will accept for that same cryptocurrency.
An order book is simply a list of the buy and sell orders that are currently outstanding for a specific cryptocurrency on a exchange. The order books allow traders to view the current market liquidity and depth.
A candlestick graph is a type financial chart that shows the high, low and opening and closing prices for a cryptocurrency during a specific period. Traders use the chart to analyze price movements of cryptocurrency.
Cryptocurrency trading may seem overwhelming and complicated, especially to new traders. It is best to familiarize yourself first with the basic terms. You will encounter more technical terminology as you begin to trade, so it is important that you continue to learn. Understanding cryptocurrency terminology will allow you to make more informed investment decisions and navigate cryptocurrency markets with confidence.