Some terms you should know before you start trading Altcoins

Altcoins known as Alternative digital currencies, are Cryptocurrencies launched after bitcoin. They are seen as cheaper alteranatives to bitcoin. Trading in Altcoins is a very exciting venture, and also very rewarding. Unlike penny stocks the profit potential is very high, and so is the risk involved.

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So if you are thinking of jumping into Altcoin trading, here are some terms you should be familiar with before taking a dive in the deep end:

ITO/ICO

ICO/ITO stands for initial coin offering or Initial Token Offering, it involves the public sale of certain percentage of the coin’s units, in order to raise money for development. It can be likened to an initial public offering of stocks, but in this case it involves cryptocurrency

Market Capitalization

also Market Cap, is the total value of all the coins. It can be calculated by multiplying the price of the coin by the number of coins released into the market.

Premine

This is when some or all of the coin’s initial supply is generated by the developer before the Initial Coin Offering, as opposed to generating over time through other forms of mining.

Instamine

This involves mining coins for a short period of time, after the initial lunch. The difficulty level is set to increase over time making it difficult to mine more units of the coin.

Ninja mine

Ninja mine involves announcing a coin all of sudden with no prior warnings, and beginning mining immediately the coin is announced. It is a strategy by developers of a coin attract interest to a coin after significant amounts have been mined

FUD

FUD stands for Fear, Uncertainty and Despair, it refers to negative talk surrounding a cryptocurrency, it can sometimes be used by rival coins to crash the price of another coin, or by specculators who want to crash the price of the coin and buy at a bargain then sell later after hyping the coin.

PoD

PoD stands for ‘Proof of Developer’, it’s a way to identify the developer of a cryptocurrency. It’s a measure put in place to curtail scams in the cryptocurrency market. If the identity of the developer is anonymous, it’s very easy for them to disappear after dumping their coins for easy profit.

Emission schedule

this is the rate at which new coins are generated.

Bagholders

These are people holding a coin after it has depreciated in value. They I what I would like to call ‘the last fool’. They often hold on to a cryptocurrency hoping it would appreciate over time.

Bots

Bots are usually an automated trading software

Ponzi scheme

A Ponzi scheme is a scam in which the capital of new investors is used to pay initial investors, it requires an increasing supply of new investors for the system to b sustained

You will find a few examples below (Except bitcoin):

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