In the previous article we analyzed the most commonly used terms related to cryptocurrencies and blockchain. It’s time to talk about mining and trading. Let’s go!
Dear experienced blockchain and cryptocurrency users, forgive us for some simplifications, we want to make life of less experienced colleagues easier, not confuse them even more 🙂
Mining is the process of creating and finding a new block in the blockchain using computing power (or some other way). Miners are rewarded for their work in cryptocurrency.
A mining farm is what buzzes in your neighbor’s garage and suspiciously melts the snow in winter. As a rule, specialized mining devices, video cards or storage systems (SSD/HDD), which, depending on the blockchain and the principles of creating blocks (“consensus”), actually create new blocks or otherwise earn money for their owner.
Hashrate is the computing power of the blockchain, which is provided by the number and power of miners. The more miners and the more productive their equipment, the faster the speed of creating blocks, and therefore the speed of transactions (but, as always, there are exceptions, and the connection between the hashrate and the speed of the blockchain is not always direct)
Volatility is a parameter that shows how much the value of a cryptocurrency (and not only cryptocurrency) fluctuates. The higher it is, the more risky it is to operate with.
Flat a situation when the price of a cryptocurrency remains in a small range for a long time.
Rocket and tothemoon (to the moon!) – a sharp increase in the price of cryptocurrency.
Hodl is a distorted version of the word “hold”. This is the name of the process of buying a cryptocurrency and storing it in the hope of growth.
Short is a ‘short game’. A trader borrows crypto on the stock exchange, sells it, waits for its price to drop, and then buys more at a reduced price than he borrowed, and returns the debt. The rest in profit!
Let’s take a look at the crypto-animals separately:
A bull is a bull trader who expects an increase in the price of an asset (to buy low and sell high).
A bear is a trader who is interested in a fall in the price of an asset in order to go short (see above).
The hamster is a novice who makes rash decisions and always panics. Professional traders “cut” it quite often.
Whales are holders of a large ammount of digital assets. Their actions often lead to various events in the crypto market.
In the final article on this topic, we will finally move on to abbreviations. We remind you that you can suggest your topic for future #stonacademy posts in our STON.fi chat – we are constantly reading the chat and making notes for ourselves.