Below you will find a beginners guide to cryptocurrency terminology and acronyms. You will find a comprehensive list of all the major terms used in the crypto world. Simple to understand basics for all newcomers entering the exciting world of cryptocurrency. Users are advised to make notes of the abbreviations until they become accustomed to the cryptocurrency language. Take your time - here at Hodling Bitcoins we promise not to inundate your browser with pop up adverts or push notifications from Facebook or Instagram. This website has been set out to help beginners like yourself take early steps onto the cryptocurrency ladder the easy way. Any questions just ask the team.
The term "cryptocurrency" refers to a type of digital asset that is designed to be a form of exchange. This type of exchange uses cryptography to keep transactions secure. Cryptography has huge benefits with security and privacy.
A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Users have called this the blockchain ledger. Each block typically contains a link to a previous block, a timestamp and transaction data. Privacy blockchains can hide some data so the user remains anonymous.
Some cryptocurrencies are mined such as Bitcoin. "Mining" involves using sophisticated computer hardware and software to solve complicated mathematical problems. This can be extremely expensive due to electricity costs. The miners get paid a fee for mining cryptocurrencies. This is what gives value to the price of Bitcoin.
"Altcoin" (alternative coin) is a reference to any digital cryptocurrency other than Bitcoin. Bitcoin is the most popular cryptocurrency. However, some of the best investments can be made with altcoins. Gains of over 8000% were made by "Litecoin" in 2017. Litecoin started January at £2.50 and made a high of £200 in late 2017.
An ICO is an Initial Coin Offering, similar to an Initial Public Offering (IPO) in the stock market. An ICO is normally used to raise money for a new cryptocurrency project. The price will fluctuate based on supply and demand. ICO's are not for the newcomer and are best avoided until you fully understand these. However huge gains can be made on successful projects.
A digital wallet allows an individual to make electronic transactions. A wallet stores your coins via lines of code - only you will have access to the private master key for security. There are offline wallets, desktop wallets, paper wallets, exchange wallets, smart phone wallets and more. Please see links above for advice on which wallet we endorse.
FOMO stands for Fear of Missing Out. In a rising market, this is an extremely common phrase used. As more newcomers enter the market the feeling of FOMO can cause the price of cryptocurrency to rise further.
FUD stands for Fear, Uncertainty, and Doubt. There is a general consensus that todays media spouts negative information regarding Bitcoin. New investors should receive information from numerous sources including Twitter, Youtube and
HODL was used on a subreddit with a user misspelling the word “hold". It is now used on forums, Twitter and Youtube videos for when people need to keep their cool in the face of drops. Panic selling during a sudden drop can lose investors thousands and many are told to "HODL". Some users also say the abbreviation stands for hold on for dear life!
A bull market is a condition when market prices rise and continue to rise. Usually for weeks or even months. Making a trade before a "bull run" is extremely exciting to watch as your funds can double or triple in an extremely short period of time. 2017 was the year of bull runs with many investors believing 2018 can be even better.
A bear market is a condition where prices fall and widespread pessimism causes continuous downward spiral to be self-sustaining.
Crytpocurrency can be volatile and our advice is to only invest what you are prepared to lose.
Long term investment is advisable for all newcomers. Keeping your portfolio for a minimum of 12 months is advisable.
A shill is a person engaged in covert advertising of a particular alternative coin. The shill attempts to spread buzz by personally endorsing the product in public forums, twitter feeds etc with the pretense of sincerity, when in fact he is being paid for his services. Many owners of alternative coins have made contact with John McAfee to endorse a coin via his twitter feed.
Unfortunately "pump and dump" schemes can happen on some cryptocurrency markets. They normally only occur on markets where liquidity is extremely poor. Market manipulation is usually only performed on the smaller market cap stocks. Traders will artificially inflate the price and then exit their positions very quickly normally within a few minutes, causing a price collapse.
Many traders who are bullish about a particular coin will normally state they believe the coin will "Moon" or it will "go to the Moon". Traders who believe their investments will Moon expect huge movement upwards of a coin with substantial gains. To see our list of coins we believe will Moon see above.
Patience is a virtue in cryptocurrency. Weak hands are people who cannot be patient and sell at a loss when the market is down. Bitcoin fell from £780 to under £320 in late 2013. Many weak hands would have sold. In December 2017 Bitcoin reached £13,500 and those traders who believed in Bitcoin made fantastic profits.
The term “whale” is frequently used to describe the big money players in the crypto world. A whale is usually someone who owns a lot of cryptocurrency. This can be hundreds of thousands of bitcoin or more. If a whale sells a lot of their stake, it can cause the price of a cryptocurrency to dip by flooding supply and turning the market to a "bear market".
If you are said to be "left holding the bag", then this means that you have been left with something that is worthless or nearly worthless. You never want to be called a bag holder.
Do your own research. Take your time to do your own research before diving in with both feet. Please read the information supplied on this website in full before making a decision on purchasing Bitcoin or Altcoins. Remember the more information you have the better chance you have of making substantial gains. Once you have made your first trade into cryptocurrencies you'll never go back to "normal" investments.