35 تغريدة 29 قراءة Nov 04, 2021
Entering the #crypto world is exciting but sometimes overwhelming for a newbie coz of all the complicated terms and sometimes we feel afraid to ask.
Below is a list of common terms in an easy to understand way with practical examples that might help. A Giga thread! #bitcoin #btc
#Blockchain - A blockchain is a virtual ledger in which transactions can be recorded securely and cannot be modified or erased once entered. It is 'decentralized', meaning that there is no central authority running things. Eg. $btc $eth $ftm #cardano are examples of blockchains
#Altcoins - Altcoin, short for alternative coin, refers to any token that is not bitcoin. Because Bitcoin pioneered the cryptocurrency ecosystem, all tokens launched after $BTC are considered by some as alternatives to it
#Fiat - Fiat currencies are real world currencies like #USD or #INR that have been issued by governments, highly vulnerable to inflation and manipulation, long term NGMI (Not gonna make it
#Stablecoins bridge the worlds of crypto and fiat because their prices are pegged to an asset like the U.S. dollar or gold. This dramatically reduces volatility compared to other cryptocurrencies. These are used as benchmark pairs to value other tokens. Ex incl $usdt $usdc $djed
#Shitcoins - Typically coins with no fundamental value but usually massive marketing and an active community, this defintion varies if you ask a #bitcoiner as they consider everything except #bitcoin shitcoins
#NFT - Acronym for Non-fungible tokens, NFT is a digital asset that represents real world objects like art, music, videos etc and are usually one of a kind hence the term non-fungible. 1/2
Technically #NFT's have metadeta which is unique and cannot be replicated or modified and ownership is clear as its transactions are recorded on blockchains. They are usually bought and sold on NFT marketplaces like #Opensea, #Artion etc. 2/2
#CEX - Centralized exchanges (CEX), like #Binance, #Coinbase, #FTX are platforms that match buyers and sellers via an orderbook w the exchange matches and executes the order, they work exactly like a normal stock exchange. Detailed thread below:
#DEX - A decentralised exchange (DEX) is one through which crypto transactions are made without the involvement of a middleman as rather than a traditional order book they use smart contracts and are fully decentralized. 1/2
These DEX's are decentralized applications (dApps) running on a blockchain hence there is no one controlling these centrally. Some examples of prominent DEX's are Uniswap, Sushiswap, Pancakeswap, Spookywap etc. 2/2
#L2 - Layer 2 blockchain technology is often referred to as an “off-chain” solution. Its main purpose is to scale blockchain transaction capacity while retaining the decentralization benefits of the blockchain. Some ex. are $matic $ctsi which solve problems associated with $eth
#Smart Contracts - A smart contract is code designed to execute a certain trxns based on a set of pre-established rules. These contracts are executed automatically by the blockchain once the rules have been fulfilled. Usually coded with #solidity
#DApps refers to a “decentralised application” – a program built on top of a blockchain with a specific functionality. The difference between a regular app and a dApp is that transactions are validated using the blockchain’s infrastructure without the need for an intermediary.
#Gas refers to the fees charged for executing a blockchain trxn and this fee is given to the network as reward. Gas fees are probably one of the most imp factors in the success of a blockchain and this is why $eth is under so much pressure because of the absurd gas fees it has
#Mining - Mining is the process of creating new coins in a blockchain. In theory, any person can become a ‘miner’, but mining requires powerful equipment and a lot of computational energy esp on POW protocols. Miners receive rewards. In a POW like the Btc, miners are paid in $btc
#Defi - DeFi is a blanket term for decentralized finance DApps. DeFi includes banking, loans, fixed deposits, insurance services, etc. DeFi products essentially are an alternative for the traditional banking system but fully decentralized, ex curve, compound etc.
#Web3 - Web3 is basically a decentralized internet and rather than running on a centralized cloud platform like AWS Instead, Web3.0 runs on blockchains. It is free from any govt control and thus censorship proof
Detailed thread below
#Metaverse is like a combination of social media, virtual reality and a massive multiplayer game (RPG). Imagine going on a date in a virtual world and while in game checking ur #twitter feed. (although its not polite esp. if you want the date to go anywhere). Ex. $sand $mana
#Play2Earn - Play2Earn games refer to the concept of gaming in which a game provides its players with a chance to earn any form of in-game assets that have value in the real world. Basically getting paid to play games (How cool is that), eg: $axs $alice etc.
#POW - Proof of work is a protocol to power the blockchain. Miners solve computational puzzles to mine crypto. In essence miners spend electricity to generate tokens like $btc $eth. Requires sophisticated hardware and high amount of energy. Not very good environmentally
#POS - Proof-of-stake (PoS) is another protocol that can be used to power a blockchain. Here miners who “stake” their crypto are allowed to participate as validators, in basis the % of tokens they stake. Usually much more energy efficient and environment friendly, Eg: #Cardano
#FUD - Fear, uncertainty and doubt can be summed up using the term "FUD." The idea behind this is that "Whales" may spread misleading or inaccurate information in order to cause an token's price to decline so that they can buy more, for eg: the regular china bans #crypto news
#Whale - The term "whale" is used to describe an individual /organization who has huge positions either long or short. This term is a good one to know because market participants with the ability to execute very large transactions can potentially manipulate the market and they do
#SupplyShock is an event that suddenly increases or decreases the supply of a token. This sudden change affects siginificantly affects the price of the token either postiviely or negatively basis the kind of supply shock, concept that will be explained further in my $egld study
#CryptoWallets - A software or a hardware non-custodial wallet where you can transfer your token from CEX's and store for long term. Considering CEX's are prone to hacks it you have a sizeable portfolio its always recommended to use a wallet, eg: #metamask #ledger etc.
#ICO - An initial coin offering (ICO) represents the first time that an organization offers digital tokens to the public in an effort to raise money like we can IPO's, they can be through a project's own website or can be "IEO" or "IDO"
#IEO - Initial Exchange offering, A new coin listing but on a centralized exchange like #binance, #coinbase etc.
#IDO - Initial DEX offering, A new coin listing but on a decentralized exchange like #uniswap, #sushiswap #spookyswap etc.
#DAO stands for “decentralized autonomous organization” and can be described as an organization where decision making is controlled by its token holders and decisions are taken by holders rather than management (Exciting Stuff). Here the power truly lies with the people like $btc
#Staking exactly works like fixed deposits but with #crypto, rather than keeping your tokens idle you lock them for a certain period and earn interest. Lot of CEX's, DEX's offer staking. If you are a long term holder its always great to get passive income through staking
#Farming - Yield farming is like the next level of staking where you actually lock your tokens in a #defi protocol in return for yield (usually higher than staking) to provide liquidity, this is how the DEX gets the tokens to power its crypto transactions. 1/2
Usually you have create a Liquidity Token which is a combination of 2 tokens before you can farm. which power's the DEX's liquidity pools. However there are lot of risks of scams and impermanent loss associated with Yield farming which we need to understand 2/2
#ImpermanentLoss -The biggest risk with farming. IP means means that a liquidity provider would have been better off holding their tokens rather than depositing them to a pool, basically opportunity cost. IP becomes permanent when the depositor removes thr liquidity from the pool
Congrats if you made it this far and hope it was useful...do retweet so that it helps others as well and share ur comments or questions....
@Bridge11112 To your coins to participate in the POS mining activity for which u het a reward, but the coins are still owned by u as u have the private key

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