This article is tailored to help you understand concepts better as a newbie in the space. Rather than feel intimidated by the terminologies in the crypto world, acquaint yourself with our blog page as we walk you through some complex concepts in the space from A to Z.
Acquirer Node: These are nodes that enhance transaction settlements between customers and merchants as can be found on Crypto.com blockchain network. They are of two main types; one for the customer and the other for the merchant. These two nodes work together to ensure merchant verification, user settlement, and escrow service for activation of Crypto.com products and services. Good examples are Crypto.com debit card and other wallet services.
Address (cryptocurrency address): Crypto address refers to a cord of alphanumeric characters representing an exchange, a wallet, or a related blockchain-based address. They are unique and represent the receiver and senders’ location on the blockchain. Crypto addresses are not linked to the real-world identity of their user hence, they are pseudonymous.
Airdrop: This is used in distributing tokens by transmitting assets directly to user wallets at no cost. It could happen after a token upgrade, chain fork, or as a mechanism of raising funds as well as tactics for crowdsourcing. Airdrops are basically used as a marketing strategy to announce a project’s entry into the crypto market.
Algorithmic Stablecoin: This is a model where a stable coin’s algorithm automatically aspires to meet a target by increasing or reducing the token in circulation. It does not use crypto or fiat currencies to achieve price stability, but it adopts smart contracts and algorithms instead.
Algorithmic trading: A modern market trading method that leverages computer software designed to trace a set of defined mathematical instructions. The algorithmic formulas calculate quantity, price, timing, and other arithmetic models to adopt specific strategies. The technology enables markets access to higher profitability, more liquidity and eliminates human error.
Allocation: This is the act of distributing equity or tokens earned, purchased, or reserved for a particular team, investor, organization, or entity. Crypto projects must ascertain their initial token allocations with different provisions for software development, marketing, and operational costs and so on. Generally, blockchain projects issue early teammates a defined token allocation hoping that they cannot sell for some years.
All-time High (ATH): This is a term used to describe the highest market price an asset attained on an exchange. It occurs during an asset price bull, market uptrends, or periods when assets witness extreme growth in the crypto market.
All-time Low (ATL): This is the opposite of ATH, it describes the least, lowest or cheapest price an asset trades on an exchange or crypto market. ATLs are attained by assets during a bearish market downturn, the assets devalue to about 95% from its previous market bull.
Altcoin: This is short for an ‘alternative coin’ or other cryptos aside from Bitcoin such as SOL, ETH, XRP and so on.
Annual Percentage Rate: This is the amount of interest a borrower pays on his borrowed loan in a year. APR represents the annual borrowing cost expressed as a percentage of the outstanding loan balance.
Annual Percentage Yield: The rate of interest earned on a deposit per year. APY acts as a crypto savings account similar to the annual percentage rate (APR) in traditional banks. It’s gotten from the amount you received on both your capital and the accumulated interest over time.
Asset: It is the name given to anything that has a monetary value that can be bought or owned, for example, Bitcoin. Investment assets refer to various physical and financial instruments such as stocks, gold, real estate, or dollars.
Auction: A type of market where buyers engage with sellers via bidding. Its major advantage includes price discovery and elevated liquidity.
Audit: This is a methodical examination and analysis of blockchain or smart contract codes used to interact with a cryptocurrency. It is used to fish out code errors, security issues, incorrect design, and other inefficiencies related to the blockchain. All blockchain applications and protocols are bound to audit their entire codebase regularly. This will ensure that the chain, smart contracts, and other interrelated applications are not prone to challenges like cyberattacks. A typical audit involves processes like executing tests, agreeing on defined audit specifications, and running symbolic execution tools. It also entails analyzing codes extensively and the creation of reports as audit evidence.
Automated Market Maker (AMM): This is a smart contract that allows anyone to create a market by depositing crypto into a liquidity pool. It is a fully decentralized exchange where the token prices and values in the pool are regulated by an algorithm. AMM does not depend on the active market participation of buyers and sellers, but it can handle crypto trades at any time.
In conclusion, the journey of a thousand miles begins in a day. Understanding these basics as a newbie in this space will let you have a better foundation in your quest towards becoming an expert in the industry. The “B” concepts will be coming soon. Follow all our channels religiously and engage actively across all our platforms as learning has to come before earning.
