The world of crypto moves at a breakneck speed with constant evolutions and new terminologies being added on a constant basis. While you may understand the basics, its important to go beyond and understand some of the more advanced crypto terms. This will not only enhance your knowledge but also help you make better investing decisions going forward.
With that in mind, here are 10 advanced crypto assets you need to know in 2022.
1 – Scalping
At its most basic, scalping is to crypto what day trading is to stock market investors. The basic idea of scalping is that gathering small but consistent profits on a daily basis is better than waiting for a big payout on your crypto investment. Also, crypto scalpers as they’re called, rely primarily on technical analysis of coins and companies rather than fundamental techniques as used by day traders. Be prepared to get deeper and learn about candlestick chart patterns, read charts and understand support and resistance levels if you want to profit off being a crypto scalper.
2 – High-Frequency Trading
High-Frequency Trading, or HFT as it is called, is a form of trading that leverages the power of advanced computer systems to transact large orders in a matter of seconds. These systems use programs with complex algorithms that analyse multiple markets and execute orders based on market conditions. There are pros and cons to using this method of trading that you can learn more about once you deep dive into this subject.
3 – Nonce
Nonce is short for “number only used once.” A nonce is a single-use number used for specific cryptographic processes. Going deeper, you will also come across terms like ‘header hash’ and ‘golden nonce’ that have got to do with mining a block and adding it to the blockchain. Indeed, understanding nonce and its workings are a basic requirement if you want to become a crypto miner.
4 – Hard Fork and Soft Fork
In programming terms, a fork refers to an open-source code modification. In the crypto world, a hard fork is usually used to define a fundamental change in the blockchain system. The change also renders older versions invalid so as to avoid confusion and errors. A soft fork, on the other hand, is used to denote changes to the blockchain that also remain compatible with older versions. These are mostly related to adding a small function or cosmetic changes in the blockchain.
5 – DEX
DEX refers to Decentralised Exchanges that allow users to exchange coins and tokens by leveraging smart contracts and blockchain technologies without a centralised intermediary. This allows you as a crypto assets owner to maintain custody of your funds and private keys in the way that you decide is best for your investment goals. DEXs are also considered less prone to hacking than centralised intermediaries.
6 – Average True Range
Average True Range (ATR) attempts to solve one of the biggest challenges facing crypto owners by helping them to measure volatility and assist in finding the right markets to maximize profits. ATR does not reflect buy or sell signals and is simply measures volatility for crypto trading in much the same way it is used for forex and stock trading. Essentially, an ATR provides information about how much an asset can move in a specific period. This information can be used to manage open positions as well as initiate stop-loss, depending on the crypto asset in question.
7 – Scalability Trilemma
Scalability Trilemma was coined by Ethereum’s creator Vitalik Buterin and it refers to the tradeoffs developers have to make while maximising certain blockchain features. The trilemma refers to a triangle with three main blockchain attributes at each point – scalability, decentralization and security and the tradeoffs needed to make each component work as crypto assets undergo more and more complex changes.
8 – FUD
FUD is an acronym for ‘fear, uncertainty, and doubt’ that are considered the underlying emotions that sway investors and traders. Certain parties are known to manipulate behaviour in such individuals and taking advantage of their biases to make a quick buck. For crypto users, FUD is usually spoken about when malicious individuals depreciate specific cryptocurrencies or even an entire crypto market for a quick buck by manipulating FUD responses of genuine investors.
9 – Mempool
A group of blockchain transactions, each of which is waiting to be added to a block is referred to as Mempool. The word is essentially a shortening of the term Memory Pool and refers to the validation and checking process of nodes before it is successfully added to a blockchain.
10 – Tokenomics
Move over economics, there’s now Tokenomics, a portmanteau of ‘token’ and ‘economics’ that refers to the study of digital assets, especially cryptocurrencies and their value. This vast field includes the study of creators of tokens, allocation and distribution methods, market capitalisation, business models, legal status, and various ways in which different tokens function in the broader economic ecosystem as crypto gains more and more acceptance.
All of these terms would be difficult to follow if you don’t already utilise crypto tokens and assets. It’s better to get in the game by learning the basics of this new investment category and choose a reliable and secure crypto assets exchange like ZebPay to get started. We recommend ZebPay for its vast list of crypto assets, long history in the crypto space and robust security mechanisms. Open your account here.
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