Crypto, also called cryptocurrency, is found in any form of currency that exists virtually or digitally and uses cryptography to secure people’s transactions. Usually, it comes in many names. Some of them are Bitcoin, Ethereum, Litecoin, Dodge etc. A beginner who is ready to invest his/her money into cryptocurrencies needs to understand what it is about.
As a beginner, understanding cryptocurrency is vital, even when you plan to only invest it for esports bets. You need to understand the concept of digital currency, the concept of the blockchain (being a public ledger of transactions and a technology), and lastly the concept of cryptography.
However, Cryptocurrency is said to be a digital currency using encryption algorithms to help process payments. For instance, you can use it to fund your bet account whenever you engage in esports betting. The encryption technology’s usage means that it performs both the function of a currency and accounting system.
To make use of a cryptocurrency as a beginner, you must create a wallet account. These wallet accounts are usually software that is used on your computer and also your mobile phone. It helps to have access through which you can store your encryption keys, and it allows you to confirm your identity to be able to link to your cryptocurrency.
Although, using a cryptocurrency is somewhat risky because it does not run a banking system which is important for a beginner to be aware of. The risk is that, since it does not need a bank or any other third party to regulate them, there is no insurance for it, and it is hard to convert it to tangible currency such as Us dollars, Pounds, Euros etc.
Again, because they are technology-based essential assets, they can also be hacked like every other technology asset. So since you are intending to keep all your money in cryptocurrency, you need to know that if you lose access to your wallet, you have lost everything in your life invested in cryptocurrency.
Below are some Crypto Terminologies every beginner must know before going into the world of crypto.
Altcoins, Shit Coins, and Stable Coins
Altcoins is a short word for Alternative coins and are coins other than the most popular and mighty Bitcoin. These are coins other than Bitcoin because most cryptocurrencies are pegged to it.
Some Altcoins use different consensus to validate transactions that differentiate themselves from Bitcoin and Ethereum by proving new capabilities or goals. Shit Coins are also like Altcoin. However, they are cryptocurrencies with little or no value or digital currency with no immediate or intellectual purpose.
Shit coins are mainly words used to describe altcoins or cryptocurrencies developed after the popular coin called Bitcoin. Also, stablecoins are used for coins that do not experience a spike in their values as they are restrained to an external budget.
Blockchain is a cryptocurrency financial services platform or technology that provides support for various projects in the decentralized finance world. In simple terms, a blockchain is a collection of nodes. We even have betting sites sitting on blockchain technologies, providing us with sports and esports odds.
Futures and Spot Trading
Futures trading is a type of trading where investors see attractions to profit from market movements in the future. So, they buy or sell to gain more later. It could take weeks, months or years before it happens. On the other hand, spot trading is when investors want to buy a digital asset and hold it for an extended period.
Staking and Yield Farming
Staking and Yielding Farming are ways of investing in crypto. Staking confirms transactions on networks that use the proof of stake (PoS) mechanism. It has more technical goals that boost liquidity, offering lending services.
On the other hand, Yield Farming allows users to grow their investment from the positive effects of the coin market movement. Yield farming might be risky, but it provides returns in the long term.
As a beginner, you need to understand Peer-to-Peer Exchange. It is where transactions are done between traders to trade without any involvement of a third party. Binance is an example of a trading platform that allows safe peer-to-peer exchange for traders.
Bullish and Bearish Trends
As a newbie in the crypto world, you need to understand these two terms, Bull and Bear trends. The bullish trend is when a trading market is moving upward, while Bear is a word used whenever the market is declining. Therefore, a trader already knows when to buy and sell a coin to gain and avoid losing.