Cryptocurrency is a relatively new form of “money” on the market. Although many people are interested in its potential, few know what it is and how it works. If you are interested in cryptocurrency or crypto trading, there are a few terms you need to be familiar with.
Crypto platforms like the OKX crypto exchange are places to buy, sell, and trade cryptocurrency. These are online websites that are linked into the cryptocurrency markets. Here you can change one digital currency into another, also known as trading. When choosing a platform, make sure they offer:
- Customer service
You should know and trust the platform you are using.
Also known as a crypto-wallet or digital wallet, this is essentially where you keep your cryptocurrency. You should keep one wallet for online trades and another for storage. These wallets are all digital and exist across many computers.
A blockchain is a ledger of sorts. It is a record of all cryptocurrency transactions that are stored across the web for security. Most blockchains are completely public, so everyone can see every transaction but only the transaction and not who made it. There is no central storage location for blockchains which makes them safer.
Many people mistake digital currency for cryptocurrency. Although cryptocurrency is a digital currency, many other forms exist. Many governments use digital currency to conduct trade relations. With digital currency, you rely on others to make transactions; with cryptocurrency, you can verify the transactions yourself.
DLT or Distributed Ledger Technology
You will see this term when reading about cryptocurrency. This is simply another term for blockchain or blockchain technology.
Like traditional mining, this type of mining verifies transactions on a blockchain—a person who contributes computer power or bandwidth to a miner and is rewarded with cryptocurrency.
This is similar to a safe deposit box. This is your private entry into the cryptocurrency that you have. It is necessary to verify any transaction that you make using cryptocurrency. It is also a string of letters, numbers, or both that verifies that you are the owner of a cryptocurrency.
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This is a shorter version of a private key. This allows you to purchase cryptocurrency but not withdraw it. It is the key that you use to make trades.
This is the place where you can see all the transactions being made or that have been made for a particular cryptocurrency. For instance, this is a link to Bitcoin’s public ledger. This is the opposite of a private ledger which is only accessible to those who want to remain completely anonymous.
A seed is a string of words that are the basic foundation of your wallet’s existence. You can use this to access your cryptocurrency should something go horribly wrong and you lose access. Again this is not something you want to share with anyone.
These are just the basic terms for understanding the cryptocurrency world. This will at least get you started.