A glossary of Bitcoin jargon you need to know before you invest
If you have stepped into the Nigerian and global crypto space, you might have heard online users say something confusing like HODL, blockchain and Proof of Work. These terms may seem puzzling to a beginner but if you want to invest in crypto, you will need to be familiar with them and other niche jargon.
As time passes and the crypto industry evolves, more terms will only be created. But before you can understand them, you need to know the most basic and used terminologies used in the crypto world. Here, we will explain 15 commonly used Bitcoin jargons
Bitcoin jargon you need to know before you invest
Most people stay away from crypto because of confusing jargon they’re not familiar with. To help, here are some terms and phrases along with their definitions you will most likely encounter in the world of crypto investing:
In Bitcoin’s case, the first coin created from a fork was the Bitcoin Cash which was released back in 2017. Since then, numerous coins have been forked from Bitcoin’s blockchain such as Bitcoin Gold and Bitcoin Diamond.
There are various changes that users can make to create a successful fork. For instance, in Bitcoin Cash, the block size was increased from 1 MB to 8 MB to include more transactions in each block. Users who supported this change switched to the new coin while others stuck with the original Bitcoin.
For example, a soft fork makes a new rule of lowering the size of each block from 5 MB to 3 MB. Old users who have not updated their blockchain can still process transactions that are 3 MB or less, but if it tries to add a block that is greater than 3 MB, it will not be considered valid since it violates the new rules.
A hard fork can be either planned or controversial. In a planned hard fork, all users voluntarily upgrade their software. You may still refrain from updating and stay with the old chain instead but there will only be few people left to use it. If the hard fork is controversial, it means not all users have agreed upon the new protocol, creating two different coins both having their community.
When forking happens, you will have the original coin as well as a new coin that is now running on new rules. You can either decide which one to use or use both. However, make sure to check the validity of the forked cryptocurrency before claiming it. Some forks can be a scam that is done to steal users’ real coins during the process of claiming them.
The first Bitcoin halving event happened back in 2010 while the final halving event will take place in 2140. Halving is done to maintain scarcity which can create a huge impact on Bitcoin’s value.
Those willing to ride Bitcoin’s volatility are called ‘hodlers’ who use the new passive trading strategy where investors buy and hold onto Bitcoin instead of selling and profiting from short-term trades. To HODL, you need to hold on to your Bitcoins regardless of any positive or negative fluctuations that may happen in the market, in hopes of an increase in their value in the future.
There are two common approaches when it comes to HODLing. One way is to hold your coins until you reach a certain target amount before you sell them. Another way is to hold on to your Bitcoins until it becomes a widely accepted medium of exchange.
A hot wallet on the other hand is connected to the internet which makes it more convenient if you want to quickly access your crypto and use crypto exchanges. It is called ‘hot’ since you can access your coin and payout withdrawals almost instantly.
Useful Bitcoin trading tips you should know
If you are interested in buying and selling Bitcoin, there are some key steps you should follow as you venture into the world of Bitcoin trading. Check them out below:
Learn more about Bitcoin here at Bitcasino
There are key steps you should take before you dwell into crypto such as what we have mentioned above. The most important is that you deeply understand the ins and outs of the crypto market, including the jargon often used in buying, selling and analyzing digital assets. If you are interested in learning more about cryptocurrency, check out more crypto articles here at Bitcasino.