Only 16% of U.S. adults say that they have invested in, traded, or used cryptocurrency. If you don’t understand all of the cryptocurrency terms that are out there, you’re not alone.
Many people haven’t invested in cryptocurrency at this point and many others don’t understand it at all. There are a lot of terms to understand if you start getting interested in cryptocurrency, so it can be tough to get started.
Fortunately, we’re here to help. In this short guide, we’ll help you understand the basics of common cryptocurrency terms.
The blockchain is a virtual ledger that serves as the backbone of Bitcoin and other cryptocurrencies. The blockchain is decentralized and records information about a cryptocurrency that is bought or sold.
Because it’s decentralized, the blockchain isn’t stored on one computer or network but is spread across many systems all over the world.
Fiat currency is any currency that is government-issued.
Cryptocurrencies are virtual currencies and aren’t connected to government entities. This is one of the reasons that many people decide to invest in cryptocurrencies. It’s independent of governments around the world.
An altcoin is a term that’s used for any non-Bitcoin cryptocurrency. These days, there are quite a few different cryptocurrencies, although Bitcoin remains the most well-known.
Other types of cryptocurrency that you can invest in include Ethereum, Tether, Solana, and many more.
A cryptocurrency exchange is a platform that allows a person to buy and sell Bitcoin and other cryptocurrencies. An exchange will allow you to buy cryptocurrencies using a bank transfer or a debit or credit card.
Coinbase and Binance are two of the most popular cryptocurrency exchanges, but there are many others you can choose to use as well.
A cryptocurrency wallet is a place where you’ll store any cryptocurrencies that you’ve purchased. It’s important to know that there are both cold and hot wallets.
Cold wallets will be more secure and are also known as hardware wallets. They will be kept completely offline so no hackers can get access to your crypto.
Hot wallets are wallets that are accessible online and aren’t quite as secure as cold wallets.
Cryptocurrency mining is the process of creating Bitcoin or another cryptocurrency.
Cryptocoin miners use computing resources to help the blockchain network create new blocks of the cryptocurrency. The mining system works to solve complex math problems. Once it’s created, the coin is minted and becomes part of the blockchain network.
Also known as a cryptocurrency ATM, a Bitcoin ATM is a machine that works very similarly to a bank ATM. At the machine, a user can buy and sell Bitcoin and other cryptocurrencies.
These kiosks allow users to instantly make crypto transactions without needing to log on to a cryptocurrency exchange. If you’re looking for a Bitcoin ATM in Detroit, be sure to have a look at the locations now.
Understanding the Most Common Cryptocurrency Terms
Whether you want to invest in Bitcoin or you’re simply curious about cryptocurrency, be sure to understand these cryptocurrency terms. There are many more terms related to crypto, but these are the first ones that you should learn.
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