Crypto FAQs: Everything You Need to Know, From Basics to DeFi Degen Slang!
Cryptocurrency can feel like an entirely different universe filled with with words that seems like a different language, It took me a while to find out What the heck people were talking about. If beginner or a real Degen looking to brush up on your crypto slang, this guide has you covered! I’m answering the most frequently asked questions about cryptocurrency, breaking down essential terms, and language of the crypto community. Let’s go!
Frequently Asked Questions About Cryptocurrency
1. What is Cryptocurrency?
Cryptocurrency is a type of digital or virtual currency that uses cryptographic technology for security. Unlike traditional currencies issued by governments, cryptocurrencies operate on decentralized networks based on blockchain technology. This decentralization makes them resistant to government interference and fraud.
2. How Does Cryptocurrency Work?
Cryptocurrencies operate on blockchain technology, which is a distributed ledger that records all transactions across a network of computers. Transactions are verified by network participants (miners or validators) through consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS). Once verified, transactions are added to the blockchain, ensuring security and transparency.
3. What is Blockchain?
A blockchain is a decentralized and immutable digital ledger that records transactions in blocks. Each block is linked to the previous one, creating a secure chain. This technology ensures transparency and security, as data cannot be altered once it is recorded on the blockchain.
4. What is Bitcoin?
Bitcoin (BTC) is the first and most well known cryptocurrency, created by an anonymous entity known as Satoshi Nakamoto in 2009. It serves as a decentralized digital currency that allows peer-to-peer transactions without the need for intermediaries like banks. Bitcoin operates on its own blockchain and uses a Proof of Work (PoW) mechanism for transaction validation.
5. What are Altcoins?
Altcoins, or alternative coins, refer to all cryptocurrencies other than Bitcoin. Examples include Ethereum (ETH), Litecoin (LTC), and Ripple (XRP). Many altcoins have different functionalities and use cases, such as enabling smart contracts (Ethereum) or providing faster transaction speeds (Litecoin).
6. How Do I Buy Cryptocurrency?
You can buy cryptocurrency through cryptocurrency exchanges like Coinbase, Binance, Bitget or Kraken. The process typically involves creating an account, verifying your identity, depositing funds, and then purchasing the desired cryptocurrency. Some platforms also allow purchases via credit cards, bank transfers, or even peer-to-peer transactions.
Other exchanges are available, I did a full run down Of the top Exchanges And what they offer In a previous blog check it out.
7. Is Cryptocurrency Safe?
Cryptocurrency itself is secure due to cryptographic principles, but its safety depends on how you store and handle it. Using a secure wallet (hardware or software), enabling two-factor authentication, and avoiding phishing scams can help protect your assets. However, the crypto market is volatile, and investments carry risks.
8. What is a Cryptocurrency Wallet?
A cryptocurrency wallet is a tool that allows users to store, send, and receive digital assets securely. Wallets come in different types, including hardware wallets (Ledger, Trezor), software wallets (MetaMask, Trust Wallet), and exchange wallets. Hardware wallets offer the highest security as they are not connected to the internet.
9. Can Cryptocurrency Be Converted to Cash?
Yes, cryptocurrencies can be converted to cash through exchanges, peer-to-peer transactions, or cryptocurrency ATMs. Exchanges allow users to sell their crypto for fiat currency (USD, EUR, etc.) and withdraw it to their bank accounts. Some services also offer crypto debit cards that can be used for purchases.
10. What Are the Risks of Investing in Cryptocurrency?
Cryptocurrency investments come with several risks, including market volatility, security threats (hacks and scams), regulatory uncertainty, and technological challenges. Prices can fluctuate dramatically, leading to potential losses. It’s essential to conduct thorough research before investing and only invest what you can afford to lose.
Top 10 Most Common Cryptocurrency Terms and Their Meanings
Blockchain – A decentralized digital ledger that records transactions across multiple computers securely and transparently.
Bitcoin (BTC) – The first and most well-known cryptocurrency, often referred to as digital gold.
Altcoin – Any cryptocurrency other than Bitcoin, including Ethereum, Litecoin, and Cardano.
Wallet – A digital or hardware tool used to store, send, and receive cryptocurrencies securely.
Mining – The process of validating transactions and adding them to the blockchain, often requiring computational power.
Proof of Work (PoW) – A consensus mechanism where miners solve complex puzzles to validate transactions (e.g., Bitcoin uses PoW).
Proof of Stake (PoS) – An alternative consensus mechanism where users stake their coins to validate transactions (e.g., Ethereum 2.0).
Exchange – A platform where users can buy, sell, and trade cryptocurrencies (e.g., Binance, Coinbase).
Smart Contracts – Self-executing contracts with the terms of the agreement written into code, primarily used on Ethereum.
Decentralization – The principle of distributing control away from a central authority, a key feature of cryptocurrencies.
Top Crypto Slang and DeFi Terms for Degens
FUD (Fear, Uncertainty, and Doubt) – A term used to describe negative information or rumors that create fear in the market, often causing panic selling.
HODL (Hold On for Dear Life) – A misspelled version of “hold,” meaning to keep your crypto investment regardless of market fluctuations.
WAGMI (We’re All Gonna Make It) – A phrase used in the crypto community to express optimism about the future of investments.
NGMI (Not Gonna Make It) – The opposite of WAGMI, referring to someone making poor investment decisions.
Pump and Dump – A scheme where a cryptocurrency price is artificially inflated before being quickly sold off for profit.
Ape In – Jumping into an investment quickly without much research, often due to hype.
Diamond Hands – Holding onto assets despite market volatility, showing strong conviction.
Paper Hands – Selling assets too early due to fear or uncertainty.
Rekt – A slang term meaning “wrecked,” used when an investor suffers a significant loss.
Mooning – When the price of a cryptocurrency skyrockets.
Stay safe out there and always be informed Come back to this if you don't understand What somebody's talking about Especially if you're new to the space There's always a comment section if you have any questions just ask them hopefully I know but the fast pacing movement of Crypto and the world Of Crypto remember where all just learning together.
