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HODL. DApp. Ethereum.
No, these are not words from a newly-discovered alien language. They’re among the many new and key terms in the language of cryptocurrency.
Cryptocurrency isn’t just a novel investment option, and in many ways represents a different world altogether compared to traditional stocks and bonds. Between unfamiliar acronyms, emerging technologies, and keeping up with memes and tweets, just learning the basics takes time, even for seasoned traditional investors.
As with any investment, it’s important to understand exactly what you’re investing in before you start. That’s especially true when it comes to a speculative — and still evolving — asset like crypto.
There are a few prerequisites we recommend before you buy into crypto, like stocking your emergency fund, paying down high-interest debts, and securing a traditional retirement plan. And, like we’ve said before, you should only ever put into crypto what you’re willing to lose, and experts recommend dedicating no more than 5% of your portfolio to these digital assets.
But another item you should add to your checklist is at least a beginner’s understanding of what you’re getting into, including how crypto differs from other investment strategies, and the different factors that can affect a cryptocurrency’s market value.
Here are some of the terms and phrases that will help beginners better understand the world of crypto investing.
Crypto Terms You Should Know
Any coin that’s not Bitcoin. Altcoins can be anything from the second-most popular coin, Ethereum, to any of the thousands of coins with very minimal market value. Experts say you should largely stick to the bigger, more mainstream cryptocurrencies as an investment.
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The first and most valuable cryptocurrency, launched on Jan. 3, 2009. While its value has climbed steadily since then, it has seen wild fluctuations. In the past months alone, the price of Bitcoin has fluctuated from a record high of $60,000 to below $30,000.
A peer-to-peer electronic cash system that formed from a fork of the original Bitcoin. Where Bitcoin is widely accepted as too volatile to be useful as a currency, Bitcoin Cash is designed to be better optimized for transactions.
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Groups of data within a blockchain. On cryptocurrency blockchains, blocks are made up of transaction records as users buy or sell coins. Each block can hold only a certain amount of information. Once it reaches that limit, a new block is formed to continue the chain.
A digital form of record keeping, and the underlying technology behind…