Glossary: helping you understand Crypto vocabulary

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We know the world of cryptocurrencies is new and still quite unknown to many people. For that reason, we'd like to share a vocabulary guide, with words frequently used in our articles and in the context of cryptocurrencies, to make your experience easier and clearer:

  • Blockchain 

The blockchain is a technology of records made in chained blocks. These blocks carry content along with a fingerprint. In the case of cryptocurrencies, the first use of this technology, the content are the financial transactions made within it. These records are kept online, in a public and decentralized manner. In the cryptosphere, blockchain is a type of shared and immutable ledger that facilitates the process of recording transactions as well as tracking crypto assets.

  • Peer-to-Peer: from person to person.

When we talk about financial technology, the term "Peer-to-Peer" usually refers to the exchange of cryptocurrencies or digital assets through a distributed network. A P2P platform allows buyers and sellers to execute trades without the need for intermediaries. In some cases, websites may also provide a P2P environment that connects lenders and borrowers.

  • Traders: exchangers or negotiators.

The customers who buy and sell cryptocurrencies are traders: they use our platform and trade with each other buying and selling cryptocurrencies.

  • Hot Wallet / Cold Wallet

A Hot Wallet is a wallet kept in some type of online network, making it easier for customers to access it from practically anywhere in the world. Cold Wallets are offline wallets, kept in a specific location, such as a customer's external hard drive.

  • Slipppage

This is a large and sudden change in the value of a cryptocurrency. The user tries to buy or sell their cryptocurrency for a certain amount and, in general, due to lack of liquidity in market-type orders, they are unable to do so. In purchases, this would result in a higher value than expected; in sales, you would receive a lower value.

  • Outliers

Outlier is described in statistics as a point that is very distant from the other observations in a statistical series, and which we commonly refer to as a “point outside the curve”. The most common treatment for outliers is the manual exclusion of these components from the sample or the use of robust statistics to eliminate errors that may be caused in this sample analysis.

  • Candles

Candles are used to describe price action in a market over a certain period of time. They are normally formed by the opening prices, maximum prices, minimum prices and closing prices when we talk about a crypto exchange like Bitso. This method is also well used within the stock exchange.

  • Stop-limit

A stop-limit order is an order to buy or sell an asset in the market, which combines the features of a stop order and a limit order. Once the programmed price is reached, a stop-loss order becomes a limit order that will execute at a specified price (or a better price than the one the user desires).

  • Stop-loss

A stop-loss is an advanced order used by traders to prevent further losses. When a specific price is reached, the order is triggered, thus avoiding greater losses for the user in their trades.

  • Stop-Price

These are commands that allow users to buy or sell when the market reaches a specific price.

  • Last Price

It refers to the last price at which the last trade in this market was carried out.

  • Price-Limit

Refers to the price chosen for a position to be bought or sold, upon executing a Stop-Limit order.

  • FIAT: fiduciary currency

Refers to the official currency of a country, that is, the currency that is printed by the country's Government and Central Bank. It is not backed by any metal or gold and has no intrinsic value. Ex: Real, Mexican Peso, Dollar, Euro etc.

  • Exchange

An exchange is an online Bitcoin or cryptocurrency exchange platform. These platforms offer users the service of exchanging crypto assets for other currencies, be that another crypto or FIAT assets such as pesos, dollars, euros, etc. It is very similar to a stock exchange where users exchange shares for money and vice versa.

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