If you’re a first time Bitcoin trader or a professional, it is important to know the meaning behind each term you must have seen on different trading platforms. Mentioned below are some important and commonly used Bitcoin terms and their meanings:

51% Attack

This is a situation where a majority of the computing power needed for a functioning cryptocurrency network is handled by either one mine or a bunch of miners. Controlling that much network power basically means they own the network, which also means each and every single client on that cryptocurrency network acknowledges the miner’s hashed transaction Bitcoin block.

This allows the attacker to:

• •Authorize a transaction which conflicts with another client’s transaction
• •Issue the cancellation of a transaction
• •Stopping other miners from harvesting new Bitcoin blocks
• •Stop someone else’s transaction from being confirmed

Altcoin

This is a secondary name given to all other digital currencies which can be substituted for Bitcoin.

AML

AML stands for Anti-Money Laundering strategies that are implemented to put a stop to illegal converting actions to obtain funds. Some people illegally obtain funds by making it look like everything is legitimate.

ASIC

This stands for Application Specific Integrated Circuit and is a tiny silicon chip manufactured solely for accomplishing one objective. And in this case, they are used to process SHA-256 hashing complications.

This is a Bitcoin trust which owned privately and is used for investing only in Bitcoins. It uses high tech protocol for the storage of the Bitcoins invested in on behalf of all the shareholders. This is a good way of investing in Bitcoins without having to worry about storing your cryptocurrency.

Bitcoin Price Index (BPI)

The Bitcoin Price Index indicates the average price of a Bitcoin spread across all the top exchanges in the world that is in par with the criteria mentioned by the BPI.

Bitcoin Whitepaper

The Bitcoin Whitepaper was written and founded by the inventor of the Bitcoin himself or rather themselves, ‘Satoshi Nakamoto’ whose identity is perhaps the biggest mystery in the world. The Bitcoin Whitepaper was a post made by this person to a Cryptograph Mailing list 6 years ago when the Bitcoin was launched. The paper contains all Bitcoin protocol in explicit detail.

BitPay

BitPay is a payment gateway for Bitcoin which functions to enable merchants to use Bitcoins as a form of payment.

BitStamp

BitStamp is another trading exchange for Bitcoins and is the trending platforms these days.

Block Chain

The Block Chain contains an entire list of Bitcoins which have been mined since the launch of the digital currency. The Block Chain was made in order to ensure every block has its own hash drawing so the block mined after it cannot be tampered with.

Block Reward

The Block Rewards is awarded to a successful Bitcoin miner who has managed to hash a transaction block. The rewards can be in the form of Bitcoins or other fees, but it really depends on the policies governed by the digital currency in question.

BTC

It is a short form of Bitcoins.

Buttonwood

Buttonwood is a project that was developed by Bitcoin specialist and trader John Rossi. The project was made as a protest in favour of Bitcoin in New York’s Union Square.

Client

Client is the software which runs on your PC, smartphone, tablet or laptop. The ‘Client’ links up with the Bitcoin network in order to clear Bitcoin transactions and forward them.

Coloured Coins

You can think of Coloured Coins an extra aspect for trading Bitcoin. This allows Bitcoin traders to gain access to the networks add-on features. These features can then be used to determine how you want to mark your Bitcoin. For example, a Bitcoin trader can mark his Bitcoin as a stock share or a tangible asset. This also allows Bitcoin traders to use their Bitcoins to trade for other tangible assets.

CPU

Known as the brains of the computer, the CPU stands for ‘Central Processing Unit’, CPUs were used to hash and mine the entire Bitcoin process, but are no longer used because they are not powerful enough. But you can still use them if you trade with Altcoins.

So, these are some of the most important Bitcoin terms you should know and understand.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.

Mentioned below are some of the most common terms used in the Forex trading market:

Ask Price

Also known as the Offer Price, Ask Prices are market prices for traders interested in purchasing currencies. Ask Prices are displayed on the right side of a quote, for example, EUR/USD 1.1965/68. This means that you can buy €1 Euro for $1.1965.

Aggressive

Traders and/or price action are acting with conviction.

Analyst

An analyst is a financial expert who has the knowledge and evaluative skills to assess investments and in light of his research, diligently pulls together buy, sell and hold recommendations for his clients.

Appreciation

A product will ‘appreciate’ when it gains strength in terms of price correlating with the total demand in the market.

Arbitrage

The concurrent buying or selling of a financial product to enjoy the benefits of small price differentials in between different markets is known as arbitrage.

Bar Chart

Bar charts are used in the technical analysis of trading in a market. Bar charts consist of time divisions which are shown vertically with the following information: the top of the bar is the price high, the bottom is low price and the horizontal line, which is on the left, indicates the opening price and the horizontal line on the right side indicates the closing price.

Base Currency

Refers to the first currency when you look at a currency pair, a trade quote indicates how much the base currency is worth. For example, in the quote USD/JPY 112.13, the base currency is US dollars with $1 having a worth of 112.13 Japanese Yen.

Bid Price

Bid price is the price at which traders can sell their currencies. The bid price is always indicated on the left side of each quote, for example, EUR/USD 1.1965/68. This means that €1 can be sold for $1.1965.

Bid/Ask Spread

This refers to the difference between the bid price and the ask price pertaining to a currency quotation. The spread indicates the broker’s fee and differs from broker to broker.

Broker

A broker is an intermediary representing both buyers and sellers. Most brokers in the Forex market are linked with well-known financial institutions and make a commission by placing a spread between bid and ask prices.

Big Figure

A big figure refers to the beginning 3 digits of a currency quote, for example 117 USD/JPY or 1.26 in EUR/USD. So, if the price alters by 1.5 big figures it has moved 150 pips.

Candlestick Chart

A candlestick chart is also used for the technical analysis of a trade. Every time the division on the chart is shown as a candlestick, which is basically a red or green vertical bar with extensions which run above and below the body of the candlestick body, the highest point of the extension indicates the highest price for the chart and the bottom extension indicates the lowest price. Red candlesticks indicate a reduced closing price in comparison to the opening price while the green candlestick indicates a rise in the price.

Cross Currency

It is a currency pair which does not have US dollars, for example EUR/GBP.

Currency Pair

Two currencies involved in a FOREX transaction, for example, EUR/USD.

Capitulation

Refers to the point at the end of an intense trade where traders are holding losing positions and exiting. Capitulation is usually a sign that traders expect a reversal soon.

Economic Indicator

An economical indicator is a statistical report published by the government or by the academic institutions, indicating various economic changes, factors and conditions in the economy.

First In, First Out (FIFO)

Refers to open orders liquidated in sequence, for example, the first order liquidated is the first one which will be opened in the market.

Foreign Exchange (Forex, FX)

FX refers to the concurrent buying of one currency and the selling of another.

Fundamental Analysis

It is an analysis of the political and economic conditions of a country which can, in turn, affect the price(s) of different currencies.

Leverage or Margin

The ratio which represents the value of a trading transaction, taking into account the required deposit, the common margin for Forex trading is 100:1, which means you can trade a currency which is worth 100 times more than your deposit.

Limit Order

An order to buy or sell when the price reaches a specified level is known as a limit order.

LOT

The size of a Forex transaction, standard lots are worth about $100,000.

Major Currency

The Euro, German Mark, Swiss Franc, British Pound, and the Japanese Yen are all major currencies.

Minor Currency

The Canadian dollar, the Australian dollar, and the New Zealand dollar are all minor currencies.

One Cancels the Other (OCO)

Two orders placed simultaneously with instructions to cancel the second order upon execution of the first.

Open Position

An active trade which has not been closed is referred to as an ‘Open Position’.

Pips or Points

The smallest unit a currency can be traded in.

Quote Currency

The second currency in a currency pair, for example, in the currency pair USD/EUR, the Euro is the quote currency.

Rollover

Lengthening the settlement time of spot deals to the existing delivery date, rollover costs are calculated using swap points based on interest rate differentials.

Technical Analysis

Analysis of historical market data to predict future movements in the market is referred to as technical analysis.

Tick

The minimum change in price is called a tick.

Transaction Cost 

The cost of a Forex transaction, typically the spread between bid and ask prices.

Volatility

A statistical measure indicating the tendency of sharp price movements within a period of time is known as market volatility.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.