Basic Cryptocurrency Vocab for Beginners

These are some basic must know vocabulary for people just entering the cryptocurrency world.

A few weeks ago I started trading cryptocurrency. You can learn more about my first week trading in this post I did.

As a beginner I had no idea what a lot of the terms used mean, and so I want to make a post for all of the people just starting to trade cryptocurrencies so that they know the basic vocabulary used when trading.

1. Blockchain

The Blockchain might be a little confusing for beginners the definition of blockchain is this:  A blockchain is a public ledger of all Bitcoin transactions that have ever been executed. It is constantly growing as 'completed' blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order.
(Source: Investopedia)

If you still don't understand it there are a lot of great videos online explaining it like the one here by Institute for the Future:

2. Altcoin

Altcoins is basically another word for cryptocurrency except it excludes bitcoin. Here is a formal definition: Altcoins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. The success of Bitcoin as the first peer-to-peer digital currency paved the way for many to follow. Many altcoins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. There is a great variety of altcoins.
(Source: Investopedia)

3. Market Cap

Market Capitalization or market cap for short refers the total dollar market value of a company's outstanding shares. Commonly referred to as "market cap," it is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to using sales or total asset figures.
(Source: Investopedia)

4. ICO

ICO is stands for Initial Coin Offering and is basically a new coin that you can buy in it's early stages. A formal definition is this:  An unregulated means by which funds are raised for a new cryptocurrency venture. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, but usually for Bitcoin.
(Source: Investopedia)

 5. Volume

 Volume is the number of shares or contracts traded in a security or an entire market during a given period of time. For every buyer, there is a seller, and each transaction contributes to the count of total volume. That is, when buyers and sellers agree to make a transaction at a certain price, it is considered one transaction. If only five transactions occur in a day, the volume for the day is five.
(Source: Investopedia)

 6. Pump

 A pump happens when a cryptocurrency is pushed hard. It is hyped up and investors are promised large returns. The owner of the token or company sells as many shares as fast as possible to raise the price of the stock or token.Once the value has peaked, the company or owner of the token sells off ALL of their shares or holdings for a large profit. This drastically reduces the price because the market is now flooded with shares for sale. Everyone who purchased in has now lost money and the owner of the company, token or stock makes out like a bandit.
(Source: Quora)

 7. Dump

Pump and dump go together, they are a scheme that allows people with a lot of that coin or stock to gain lots of money by having people who already have an established position in the company's stock, sell their positions after the hype has led to a higher share price.
(Source: Investopedia)

 8. Correction

 A correction is a reverse movement, usually negative, of at least 10% in a coin to adjust for an overvaluation. Corrections are generally temporary price declines interrupting an uptrend in the market.
(Source: Investopedia)

 9. Fiat

 Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. An example would be the US Dollar.
(Source: Investopedia)

 10. Circulating Supply

Circulating Supply is the current amount of that coin used in transactions
(Source: Investopedia)

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