Cryptoconcepts for newbies like me.

in LeoFinance2 months ago


I was a good time looking at a lot of information where these concepts were named and I had no idea of their meaning so I took the task of finding out and bringing them in a publication for everyone who needs it, let's get started.


What is a AltCoin?

This term is derived from the English alternative and coins, being the AltCoins "Alternative Coins" to the first and main cryptocurrency: Bitcoin. What is their origin? They are derived directly from the open source code of this cryptocurrency, so another name they receive is "Forks" because they emerge as an offshoot of Bitcoin. Each of these Altcoins tries to improve or add aspects that Bitcoin does not have, so it lends itself to innovation and creation of cryptocurrencies that adapt to new projects with different solution models. However, these depend on the continuous Supply-Demand dynamics of the digital market, so many of them have little durability as their value fluctuates constantly.



What is a Stable Coin?

Stable Coins are those cryptocurrencies created in order that their value remains relatively stable in the digital market, compared to Altcoins, which depend minute by minute on commercial fluctuations. How do they do it? In my readings I was able to understand that these cryptocurrencies are associated or are linked to FIAT currencies, that is to say, physical currencies that we all know as Dollar, Euro, among others. In this way, stablecoins represent a Fiat currency within a blockchain, seeking with this support to maintain and guarantee a stable price. Taking as a counterproductive point to depend on a centralized entity such as Fiat currencies, a characteristic contrary to Altcoins, being these decentralized.



What is a Trading Pair?

It is a trading or investment strategy that dates back to the 80's and that not many know. From a simple and easy explanation, if we note its translation into Spanish is called trading pairs, so this strategy is based on taking into account two or even more than two assets that are correlated, this means that they act similarly, but are not the same. And in turn monitor their development in an estimated time, which can be long or short term. The main idea is not to expect them to behave in a similar way, on the contrary, so if one of these assets varies in a bullish, bearish or sideways market, the other asset will also be modified and it is at this point where we proceed to make buying and selling actions at a commercial level. Therefore, it is a strategy that should be monitored frequently in relation to the current state of the market.




Resist or desist? This phrase came to my mind when I documented myself on this term, and is that a BagHolder is nothing more than an investor who retains in a prolonged and stubborn manner an asset that is declining in value and has little chance of returning to a higher or similar value. I like to associate new knowledge with examples or curious data and in this case the term originates from the Great Depression where people kept protected with their lives bags of food, so a Bagholder has interesting psychological characteristics in which they blindly cling to something that has no future and ignoring other possibilities of generating profits.



Like the previous term, Hodl or make Hodl in the world of cryptocurrencies is based on decisions. In this case the decision to obtain a certain amount of cryptocurrencies and hold them for a long period of time, in the hope that this first investment will increase in value over a certain period of time, giving way to the action called Holding.


Bear / Bearish || Bull / Bullish.

Animals in the cryptocurrency world? No, they are just terms coined to the type of attitudes or actions that are performed in this world. So the first one Bear/ Bearish refers to that investor who trusts more in the bear market, so he decides to bet on these declining assets expecting an increase over time.Why a bear? Simply because of its downward attack style with its paws. On the other hand, Bull/ Bullish reflects the profile of an investor who bets on the bull market and aims to buy into it expecting to make the best profits. Why a Bull? Contrary to the bear, its attack style is upward or from top to bottom. I must point out that these are some of the most interesting terms to learn and very easy to remember.



What is the role of a technical chart?

A technical graph It allows to identify the rising and falling patterns and represent the reference point to predict when a currency rises or falls in price, which is why it plays a fundamental role when making a decision about when to invest in a currency.


Why is technical knowledge important?

This knowledge involves certain specific knowledge, abilities or skills that allow making a decision at a specific time. In the crypto area, it allows you to have a guide when investing due to the continuous fluctuations in the prices of the currencies, and already with this, we can quickly know when and in which currency to invest, in order to maximize profit and minimize losses. We can also predict when we should exit to avoid further losses or to reserve profits.


Bullish or bearish trend, which is good to buy a coin?

The upward or downward trend allows to identify the price trend of the crypto, in order to make transactions according to them. The uptrend seems to indicate the best time to invest, since if it is done in the downtrend there is no confidence about the lower price level, it would not be known with certainty when the price will stop falling.



Posted Using LeoFinance Beta


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