Newcomers will definitely get confused when they start hearing words such as cold wallet, HODL and exchange. But what are they, and how can you know all of this and still make a successful trade?
Take a look at the most commonly used terms below.
Table of Contents
Trading Signals and Analysis
Trading signals are indicators that a particular cryptocurrency’s value, such as Bitcoin will be going up or down. It’s a good tool to use when you want to sell your asset for maximum profits.
Traders often make use of sites such as crypto cash to see when they should trade and become successful in their endeavor. Along with proven analysis tools these are the things you’ll be working with on a daily basis.
Halving
Halving is an event that happens to Bitcoin every four years or so. It means that the volume of new coins introduced into the market is halved (hence the term). The developer made this so that supply gets lower, thereby ensuring demand remains high.
Bitcoin value typically goes up after a halving event. This is why investors and Bitcoin professionals often use this term.
Blockchain
Blockchain is the driving technology behind Bitcoin and all other cryptocurrencies. It’s a record of every transaction that has been made in the network and is made up of ‘blocks’ or nodes.
Blockchain is an excellent platform since it’s immutable and virtually hack-proof. It’s also fast and can process transactions in mere seconds.
Cryptocurrency Exchange
A crypto exchange is where ‘actions’ take place. This is where you can exchange your cryptocurrency into fiat currency or other types of cryptocurrency.
Think of it as a digital front for trading, and you’ll get it down pat. It’s where you can sign up for an account and buy or sell Bitcoin, among others.
Digital Wallet
A digital wallet serves to hold digital assets, such as cryptocurrencies. There are different types of wallets, and knowing the pros and cons of each can help you make your decision.
Cold wallets are often called hardware wallets since they store your private keys on a physical device. Hot wallets are usually held in the exchange platform for ease of access.
Those who wish to keep their cryptocurrencies offline will do well with hardware wallets, while those who practice regular trades will want to keep it within easy reach at a hot wallet.
HODL
A term that denotes ‘hold on for dear life’ and is a trading strategy often done with Bitcoin.
The method is simple- buy the Bitcoin or cryptocurrency you want, then keep it in storage for months or even maybe years. It’s a passive way of earning and one that requires a great deal of patience.
ICO
ICOs, or initial coin offering is an event where investors are invited to put some money down to support the launch of a new cryptocurrency. They usually get bonuses, such as free tokens or exclusive discounts when they make a purchase. It’s similar to IPOs, or initial public offerings that are held in the stock market industry.
