Cryptocurrency and Blockchain Dictionary

Terms commonly used in the world of blockchain and cryptocurrency

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ICO

ICO – short for Initial Coin Offering. A way for a cryptocurrency startup to raise money via selling own issued tokens for fiat or a common cryptocurrency, such as Bitcoin or Ether. The money raised is then used to realize the plans described in the startup’s roadmap and whitepaper.

Leverage

Leverage in financial market trading; refers to the use of borrowed capital to increase the size of one’s position to potentially increase profits. Also used as an investment strategy, to increase the potential return of an investment. A common type of leverage trading in crypto is margin trading, which involves putting assets up as collateral to increase purchasing power.

Liquidation

Liquidation – the automatical placement of sell order for the market price.

Long Position

Long position – a state the trader is in when he buys cryptocurrency asset expecting that its price will rise. For example, if a trader bought Bitcoin 2 months ago and still hasn’t sold, he/she is in a long position.

Margin Trading

Margin trading in crypto involves borrowing funds from an exchange and using it to make a trade. Margin trading is a way of using funds provided by a third party to conduct asset trading. Compared with regular trading accounts, margin trading accounts allow traders to obtain more funds and support them in using positions.

Market Cap

Market cap – short for Market capitalization. A total value of all the units of a certain cryptocurrency combined. Changes proportionally to a single unit price change. Can be calculated using this formula: Market cap = Total supply * Price of a unit For example, if a supply of hypothetical cryptocurrency is 100 coins and each coin costs 25 USD, then the market cap is 100 * 25 = 2500 USD.

Metaverse

Metaverse is a digital world. It is a virtual reality and digital representation of the real world, where users can interact, play games and experience things or activities as they would in the real world. In the metaverse, cryptocurrencies serves as means of conducting transactions.

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