Crypto Jargon Buster (Part 2)

To read part 1, click here now.

As with any new skill or interest, it’s important that you first learn how to walk before attempting to run. In fact, with crypto, it’s perhaps even more important than most, given this is still quite a volatile space, which means lots of opportunities but also lots of risks.

With that in mind, I’ve put together a comprehensive guide on all things cryptocurrency and today we’ll get started but do so at the ‘ground floor’. There’s a lot of jargon to get to grips with, and so in this section of our report we’ll be defining those key terms for you.

As with all of our content, if there’s anything you’re unsure of or would like to explore further, you can drop us a line at hello@marketprospectors.com and one of our experts will be more than happy to help.

So, without further ado, let’s get stuck into part two of our Crypto Jargon Buster…

Decentralised Market

The cryptocurrency market is decentralised, which means records of its transactions are stored across many computers across the world, and controlled by many different individuals and groups, rather than in one place and controlled by one group. Blockchain technology also allows cryptocurrency traders and investors to trade directly with one another instead of having to use a centralised exchange (e.g. bank) as a go between (although there still are many centralised crypto exchanges that people use, like Coinbase and Binance, largely out of convenience).

Other examples of decentralised exchanges are real estate, and forex markets.

Centralised Market

Centralised markets are structured so that all orders (buy/sell) are funnelled through one central exchange, which has no (or limited) other competing markets. The prices of different securities quoted by the exchange (or market) represent the only prices which are available to investors wishing to buy or sell on the exchange.

Global stock markets such as the London Stock Exchange are considered to be centralised markets as all bids (buy orders) go through the exchange where they are then matched with an ask (sell orders).

Decentralised Finance (DeFi)

DeFi is the new kid on the block in the world of cryptocurrencies. You can think of it as a niche of cryptos taking on the areas of traditional finance that Bitcoin hasn’t touched like lending, borrowing, and even decentralised betting and trading exchanges (think of the trading exchange RobinHood, only with this no one can stop you making money like when they blocked people buying shares of GameStop (GME) in early 2021!).

The DeFi crypto market is packed with smaller, cheaper cryptos, churning out gains similar to Bitcoin back in 2017. Most DeFi cryptos are built on and powered by the Ethereum platform.

That’s all for now but, if you click here, you can get parts two, three and the rest of my crypto guide today.

Plus, it won’t cost you a penny!

Click here to download your free guide today.

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