The structure of this book has a specific order, which we recommend maintaining. In the first part we do not only go through basic concepts such as blockchain or mining but also cover security measures. However, if you already understand the technology and want to learn how to invest in Cryptocurrencies solely feel free to jump straight to the second part of the book. Within the chapters you will find passages in brackets and italic - these sections are examples or more detailed descriptions.
Before we start to answer your questions, we want to emphasise a few points which are very important for us.
All of the coins we mention as examples are not meant to be an investment recommendation. This book aims to provide the ability to evaluate coins based on your expertise. None of the cases here is a paid promotion, and they only serve educational purposes.
Cryptocurrencies are highly volatile and therefore linked to high risk. This book is not a guide on how to make millions overnight; it provides a sound foundation for underlying technology as well as investment analysis.
If you are new to Cryptocurrencies be aware of the people making false recommendations. Because of this, we decided to write this book to help people get a basic understanding of what they are buying, helping them avoid another BitConnect.
Dictionary
In such a modern topic, there are lots of abbreviations and words, which might seem awkward, but in fact are an essential and highly used part of the Cryptoworld. The following abbreviations will help you understand threads, blogs and other sources. You can skip this part and come back to this later, but we would advise you to read through this once before we start.
FOMO - Fear of missing out
(This abbreviation basically describes that a coin is hyped, and investors are eager to buy, willing to pay more than the actual value. They overlook weaknesses or doubts in order not to miss a good opportunity.)
FUD - Fear, Uncertainty, Doubt
(As you probably noticed there are lots of negative articles about Cryptos or Bitcoin in general, FUD describes the outcome of a message. Example: The CEO of JP Morgan said, that Bitcoin is a fraud, therefore he spreads FUD.)
HODL - HOLD
(One of the most used abbreviations in Cryptos is HODL. It is not a mistake at least not anymore. Some say it comes from a spelling mistake on a Bitcoin forum, where the topic was I AM HODLING. Others refer to it as Hold On for Dear Life. Basically, it describes a type of investor who is holding a certain coin through pumps and dumps.)
ATH - All Time High
(The All Time High describes the highest value a Cryptocurrency reached.)
Shill
(To shill a coin means that people promote a coin in order to increase the public interest in that coin. Usually YouTube or Twitter experts are shilling coins due to their wide range of influence.)
BTFD - Buy the F****** Dip
(Buy The F****** Dip - When People are selling for no specific reason (maybe FUD), the value will decrease and this would be the perfect time to buy.)
Long - Short
(Long and Short are vocabularies from share trading, usually done with futures and leverage trading. People who position themselves long, think the price will go up, while people who position themselves short, think the coin will fall in value.)
ICO - Initial Coin Offering
(This abbreviation is based on the IPO (Initial Public Offering), the standard abbreviation for distributing shares. It means that a Cryptocurrency is launched and the first coins/tokens are sold, before being listed on an exchange.)
Whale
(You will probably someday read, that whales start buying, or selling. Huge players/investors, who own large stakes of a certain coin are considered as whales.)
Buy wall - Sell wall
(When you take a look at the order book, most exchanges will as well provide a graph for the market depth. A buy wall is the sum of all the limit orders for buying at the same specific price (green). The sell wall on the other hand is the sum of the selling orders, mostly red.)
Bagholder
(A person holding a high number of coins hoping to make large profits, even through non-profitable times.)
Bear/Bearish - Bullish
(Bear/Bearish means that investors are expecting the stock or coin to fall in value. A bullish movement on the other hand means that investors expect the price to rise.)
Moon
(Or to the moon, describes that a coin has a strong bullish movement. People who expect a coin to moon think that the coin will increase in value. You might have asked yourself, why we selected this cover design and this is the answer to your question. It is an innuendo to the Cryptoworld expecting the Bitcoin to moon.)