5 Important Cryptocurrency Terminology You Need to Know

Last updated on April 17th, 2023 at 12:56 am

In the cryptocurrency universe, there are lots of different terminologies used by traders and investors.

As a beginner, you must learn the most common terminology so that you can understand what cryptocurrency is all about and how it works. This way, you can make smarter decisions.

So, what are the biggest examples of cryptocurrency terminology that you need to know?

Below is a top 5 list for you to read and memorize.

1. Price Charts

Crypto price charts are graphs that highlight the historical price of a cryptocurrency. You can check to see how the price has changed by the hour, day, week, month, or year, which is helpful for traders and investors who are looking to purchase cryptocurrencies that are performing well in the market.

A good example is Ethereum, which is the second most valuable cryptocurrency in 2022. If you take a look at OKX.com’s Ethereum current price charts, you can see its current price value as well as lots of other useful information.

Before you invest in any cryptocurrency, make sure to always check and analyze the price charts.

2. Blockchain

Next, let’s discuss blockchains.

A blockchain is a type of technology that allows people around the world to make crypto transactions online. Through a blockchain, transactions can be viewed and verified by anyone.

If you use a mobile banking app, you can see all of your previous transactions, right? Think of a blockchain like that – it’s an official record keeper that powers all crypto transactions, from Bitcoin to Ethereum. Without blockchains, there would be no ‘middlemen’. It would be like trying to purchase an item from a store without a credit card or cash – it simply isn’t possible.

3. Mining

In a nutshell, crypto mining is the process where people (‘miners’) solve complicated mathematical equations that then enable new cryptocurrency coins to enter the market. For example, if someone successfully mines Bitcoin, then they will receive Bitcoin coins.

In the case of Bitcoin, people do the mining by creating verified blocks that then add transaction records to Bitcoin’s public blockchain, which then enables new coins to enter circulation – simple.

4. Hot Wallet

When dealing with cryptocurrencies, you’re going to deal with both ‘hot’ and ‘cold’ wallets. Let’s firstly discuss hot wallets.

A hot crypto wallet is a digital wallet where you can store your cryptocurrencies. Hot wallets are always connected to the internet, hence why they’re labelled as hot.

With a hot wallet, you can check how many coins you have at any given time as well as send and receive them with other people.

5. Cold Wallet

A cold wallet is a crypto wallet that functions offline.

In other words, it’s not connected to the internet. It works by storing the user’s address and private key so that it can be accessed safely.

Because cold wallets operate offline, it makes it impossible for hackers to get into them, which is why many people prefer the extra blanket of security that cold wallets offer.