18 Vital “C” Concepts You Must Understand in the Crypto Space
In our previous installments, we have simplified some basic “A” and “B” concepts in the crypto industry. Those concepts are considered important for anyone who is just coming into space and curious to have a mastery of the operational terminologies. Even then, these unfolding A-Z series have continued to attract applause from crypto enthusiasts who see it as an avenue to relearn and refresh their understanding of some crypto concepts. In this edition, we are explaining some selected “C” concepts everyone must understand in the crypto-verse.
A crypto coin is a digital store of value that represents the utility of a specific ecosystem. For example, $DPAD is the native coin of the DPAD ecosystem and it represents the fiat within the ecosystem. In general terms, digital coins allow ecosystem participants to transfer value within and outside their ecosystem.
Compound interest refers to the amount obtained on reinvested interest accrued from the initial principal. In other words, compound interest is interest on interest. It is a faster way to grow your wealth, and it works when you reinvest the interest gotten on your capital. If you stake DPAD and collect the interest, for instance, you can also re-stake that interest to collect more interest. This is referred to as compound interest, and it was popularized by legendary investor, Warren Buffet.
Cronos Chain is an EVM compatible chain built on the Cosmos SDK. This allows users of Cronos chain to get access to the good sides of both Cosmos and Ethereum.
A call option is a financial derivative that gives users the right, but not the obligation, to buy an underlying asset at a predetermined price. In simple terms, a call option allows a user to buy an asset at a specific price at some time in the future, irrespective of the price of the asset at that time. For instance, if you purchased a call option on $DPAD today at the current price, if it pumps 500% in two weeks (before the expiration of your option), you would be able to buy it at today’s price two weeks later, and reap a 500% profit!
A candlestick is a tool used in chart reading, which shows important details about the price of the asset at the time of recording the candlestick. Candlesticks can either be green (sometimes blue) or red (sometimes black), and these colours depict various price movement directions. A red candlestick means that the price closed lower than it opened within that time frame, and a green candlestick means the price closed higher than it opened. Candlesticks are used in the technical analysis of cryptocurrencies.
The anatomy of a candlestick
Capital is simply the money you use to invest in an asset. This is the amount you hope to get profits on.
Capitulation refers to when an investor sells an asset for much lower than it was bought due to a large loss in the asset’s value. This usually happens when the investor has lost faith in the asset and believes it cannot go up in value again.
Censorship resistance is defined as the quality possessed by something that allows everyone to participate in what it offers and does not allow anyone to stop others from participating as well. Censorship resistance is a major selling point of cryptocurrencies, as anyone with access to an internet connection can partake in buying and selling cryptocurrencies through a DEX, without permission from anyone.
CBDC refers to “Central Bank Digital Currency” and it is a digital currency issued by central banks whose operations are regulated by the government.
Centralization refers to the presence of a central governing body that makes decisions without input from anyone outside the body. In the crypto-verse, a centralized blockchain is one in which there is a single (or a small number of) node(s) governing the operations of the blockchain.
A centralized exchange (or CEX) refers to a cryptocurrency exchange that is owned and controlled by a central body.
Cross-chain refers to the technology that connects different blockchain networks together and allows for the exchange of information and value between them. An example of cross-chain infrastructure is a cross-chain bridge (which we discussed in our “B” concepts article here.)
This refers to a hardware form of storage for cryptocurrencies and it is generally considered to be safer. Since a cold wallet stores crypto offline, it cannot be hacked and is therefore useful to store large amounts of crypto.
Collateralization is defined as the process of using one asset as collateral to borrow another asset.
A blockchain confirmation is a measure of how many blocks have passed since a transaction was last added to the blockchain. The more the number of confirmations, the more legitimate the transaction is.
Consensus is a state in which all participants of a network agree on the order of blocks on the blockchain. Consensus helps make decentralized record-keeping similar to a centralized database.
A contract (usually called a smart contract) is a piece of code that allows certain actions to be performed on the blockchain without input from any third party. The staking functionality within the DPAD ecosystem, for instance, is powered by smart contracts. No one manually fills up your gains for you, but it is all done by smart contracts! It is also worth noting that smart contract functionality is only possible on blockchain networks.
A custodian is a person or an organization that is tasked with the responsibility of safely keeping customers’ or organization’s funds for a variety of purposes.
In conclusion, crypto has a lot of fundamental concepts that must be learnt to fully enjoy all the things it has to offer. In the above article, we believe strongly that the common “C” concepts in the crypto space have been critically analyzed and simplified. Anticipate the “C” concepts in our next series. Thank You.
About DPAD Finance
Dpad protocol is the world’s first social venture builder creating the next generation Launchpad for founders focused on decentralized Web3 platforms. DPAD has a mission to give wings to upcoming great ideas in the Blockchain ecosystem by providing a completely decentralized, transparent, and simple to use platform for project fundraising and investment opportunities in blockchain startups.
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