19 Terms In Crypto That Newbie Traders Must Know

JAKARTA – In the midst of the cryptocurrency boom, many people are actually unfamiliar with a number of terms in the crypto world. Newbie investors or traders often ask questions like what is FOMO? What is HODL? What is Blockchain?. People who are new to the crypto world will be confused when they hear new terms such as FUD, FOMO, HODL, Blockchain and so on.

Before entering the crypto world, it's a good idea for new users to get to know various terms that are often spoken by old crypto players first. This allows new crypto players to stay informed and connect when spoken to.

Satoshi Nakamoto created the first cryptocurrency, Bitcoin (BTC) in 2008. Satoshi Nakamoto's name has not been revealed until now. No one knows who or what group behind the name. However, cryptocurrencies have spread to various parts of the world and their users are experiencing rapid growth.

The following are terms in cryptocurrencies that new users must know as compiled by VOI Tekno from various sources.

1. Cryptocurrencies

Cryptocurrencies are decentralized digital money that uses blockchain technology. In its transactions, cryptocurrencies use a peer-to-peer mechanism, namely from one user to another directly without any intervention from third parties such as banks.

2. Altcoins

Altcoin is an abbreviation of the word “coin alternative” which refers to a digital currency other than Bitcoin.

3. Bagholder

The term Bagholder is a designation intended for traders who fail to exit during a pump and dump. Bagholders are described as investors who lose money because they hold poorly performing crypto stocks/assets for a long time.

4. Satoshi

Satoshi is the first name of the creator of Bitcoin which is used as a term that refers to the smallest unit of Bitcoin. "Sats" is the name of the term "Satoshi". For example an investor buys Bitcoin for a certain price and gets 0.00000001 BTC. This smallest fraction of Bitcoin is called Satoshi, so investors get 1 Satoshi.

5. Blockchain

Blockchain is a new technology that underlies cryptocurrencies and serves as a secure and open storage of digital data. Blockchain is like a ledger containing transaction data that can be accessed by anyone.

6. FUD

FUD stands for Fear, Uncertainty, and Doubt. FUD is a strategy of investors who want to lower the price of crypto coins so they can buy them cheaply. Investors can spread FUD to the general public so that investors can deposit coins at low prices.

7. FOMO

FOMO stands for Fear of Missing Out. This term is often intended for novice investors who are new to investing in stocks and cryptocurrencies. The word FOMO is often used for those who follow market advice and seniors for fear of missing out on opportunities.

8. HODL

HODL is a play on the word Hold. The term HODL means 'Hold On for Dear Life'. Hodl is used in the crypto world as a strategy to store or maintain its crypto assets.

9. Pump and Dump

In fact, the term pump and dump is used to describe the strategy that investors are currently doing in crypto trading. Many said, "the coins are being pumped by the barons," or "the Bitcoin will be dumped soon". The first means that the price of a coin will be increased, while the second means that the price of a coin will drop.

10. Bearish and Bullish

Bearish is a term when prices stagnate and decline. While Bullish is when the price has increased. In general, Bearish means "down" and Bullish means "up".

Bear or bear is likened to an animal that attacks you, destroys your picnic basket and then hibernates in a cave for months, this is a metaphor for falling prices. While the bulls will head you forward, this is a term for soaring or rising crypto prices.

11. Correction

Once a coin has peaked, it will most likely enter a period of correction or decline to a stable price at a certain level before rising again.

12. Scalping

Scalping is a trading style to get profit/cash/opit (profit) in a fast time. Given the uncertain price of crypto assets, this method can be used to make profits little by little.

13. Staking

Crypto staking is used by a coin owner who wants to get passive income just by validating transactions or all activities in the blockchain system. Crypto owners must first lock their coins in a legitimate and trusted wallet. This activity can only be done on a blockchain that uses the Proof of Stake (PoS) algorithm.

14. Dapp

Dapp stands for Decentralized Application that runs on a distributed computer system in a blockchain network. So it's not run on just one computer. Dapp is not hosted on a private server. A popular Dapp is Cryptokitties, a blockchain-based game built on the Ethereum network.

15. DeFi

DeFi stands for Decentralized Finance or Decentralized Finance. DeFi is a financial system that runs on the Ethereum blockchain. In general, DeFi provides transparent and open financial services.

16. DEX

DEX stands for Decentralized Exchange which means Decentralized Exchange. Through DEX crypto owners can buy other cryptocurrencies directly (peer-to-peer) from other users without having to use an exchange platform.

This is intended to reduce the losses experienced by coin owners when the exchange or trading exchange goes bankrupt. There are many DEXs built on top of the Ethereum network, one of which is EtherDelta.

17. Software Wallet

Software Wallet means a digital wallet that serves as a personal repository of cryptocurrencies. The coin owner can transfer his crypto from the trading platform to his personal wallet. The wallet has a number of keys composed of a number of words that the user must record sequentially. Users can download the wallet to their computer or to their own cellphone.

18. Whale

Individuals who own large amounts of certain cryptocurrencies are called Whales with a minimum of 5 percent of all crypto assets. These whales have the potential to manipulate prices using the pump and dump method.

19. NFT

NFT stands for Non-Fungible Token or token that cannot be replaced. NFT is like digital art where each work cannot be duplicated by others and ownership can be traced to the first seller. NFT is like a digital certificate of ownership of the original work which includes video assets, music, paintings, photos, avatars, names, and so on.

Some time ago, Twitter owner, Jack Dorsey has sold his first tweet which sold IDR 42 billion in Ethereum (ETH) cryptocurrency. In Indonesia, Denny JA managed to sell paintings in the form of NFT and sold IDR 1 billion in ETH. One of the most popular NFT auction sites is Opensea.io.

These are the terms in the crypto world that investors or novice crypto traders must know so that they can easily understand crypto terms in conversations and in reading about the development of crypto currencies.