https://pixabay.com/photos/bitcoin-cryptocurrency-digital-2007769/
Money is now digitised and more easily accessible in the digital space
Cryptocurrency is a digital currency in which transactions are verified and records maintained by a decentralised system using cryptography, rather than by a centralised authority.
"decentralised cryptocurrencies such as bitcoin now provide an outlet for personal wealth that is beyond restriction and confiscation" The Cryptocurrency came into existence with the invention of Blockchain Technology.
This digital currency (Crypto) , is an alternative form of payment (other than fiat or paper currencies like Naira or Dollar) created using encryption algorithms. The use of encryption technologies means that cryptocurrencies function both as a currency and as a virtual accounting system. To use cryptocurrencies, you need a cryptocurrency wallet.
WHAT IS A CRYPTO WALLET
A cryptocurrency wallet is an application that functions as a wallet for your cryptocurrency. It is called a wallet because it is used in a similar way as the wallet you put cash and cards in. The difference here is that instead of holding these physical items, it stores the passkeys you use to sign for your cryptocurrency transactions and provides the interface that lets you access your crypto.
Modern cryptocurrency wallets make the blockchain accessible to everyone. When cryptocurrency was first introduced, sending cryptocurrency was a manual task that required entering long keys. Today, the software (wallets) does most of it for you.
Examples of Crypto wallets include Trust wallet, Metamask, Bitkeep etc.
CRYPTOCURRENCY CAN BE TRADED (BOUGHT OR SOLD)
Just like we have in fiat currency where currencies are bought or sold. In Crypto, it is the same thing. Digital Currencies can be bought or sold.
Crypto trading simply involves buying or selling Crypto assets for profits, when the market conditions are favourable for such transactions. The high volatility of cryptocurrencies makes it difficult for people to trade Crypto without a Professional training on market analysis etc. If one takes the risk of trading Crypto without proper analysis he or she may run a great loss. THIS IS THE REASON MANY PEOPLE MAY TELL YOU THAT CRYPTO IS A SCAM OR INVOLVES LOSSES THAN PROFITS They are simply ignorant.
The scope of today's Lecture may not permit Professional crypto trading as I am not in that niche yet. IF YOU WANT TO LEARN THAT, WE CAN RECOMMEND YOU TO WHERE YOU MAY HAVE TO GO AND PAY FOR THAT SKILL.
It is important to state at this point that due to the Technology behind Cryptocurrency, it is not only buying and selling (Trading) of Crypto that happens in the world of digital currency. There are other ways to earn Cryptocurrency. This includes mining, staking, farming, Arbitraging etc.
So, even without being a Professional Crypto trader, you can earn big from the Crypto market via these other avenues.
CRYPTO TRADING CONCEPTS
Crypto Trading: Simply put, crypto trading is the act of buying and selling crypto for short-term profit. The most common method or types of trading are:
DayTrading - also known as intraday trading, involves entering and exiting a market position within the same day. The goal? To generate profits from market movements - which crypto traders consider viable given the volatility of the crypto market.
Scalping - the idea behind scalping is to make small but frequent profits, and then combine them later on with the hope of making a substantial profit by the end of the trading day.
Arbitrage Trading - is a trading method in which a trader purchases cryptocurrency in one market and sells it in another. The goal is to make a profit based on the difference between the buy and sell prices.
High-Frequency Trading - also known as HFT is a strategy that involves the creation of algorithms and trading bots that aid in the speedy entry and exit of a crypto asset.
CryptoFutures Trading - this method involves entering into a contract agreement between two parties to buy and sell a particular amount of an underlying cryptocurrency like BTC at a predetermined future price on a predetermined date and time.
Contract for Difference Trading - also known as #CFD trading is a method that allows investors to trade and invest in a crypto asset through an agreement with a broker, instead of opening a position directly on a certain market.
SOME BASIC CONCEPTS AND DEFINITION OF TERMS IN BLOCKCHAIN, CRYPTO, DeFi and NFTs
The following will aid your Understanding of the Blockchain and cryptocurrency ecosystem.
Blockchain Technology
A blockchain is a distributed database or ledger that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems.
Decentralisation
In blockchain, decentralisation refers to the transfer of control and decision-making rights from a centralised entity (individual, organisation, or group thereof) to a distributed network of people or computers. Decentralised networks strive to reduce the level of trust that participants must place in one another, and deter their ability to exert authority or control over one another in ways that degrade the functionality of the network.
In a decentralised blockchain network, no one has to know or trust anyone else. Each member in the network has a copy of the exact same data in the form of a distributed ledger. If a member’s ledger is altered or corrupted in any way, it will be rejected by the majority of the members in the network as it will be clearly visible to everyone.
De-Fi
DeFi(Decentralised Finance). It’s an umbrella term for an all-new financial infrastructure revolving around the idea of decentralisation. In other words, DeFi eliminates the traditional middleman in finance. Hence, the concept, just like the blockchain technology underpinning it, is disruptive and revolutionary. You will read more in the next Lecture.
CEFI - (Centralised Finance) had always been the standard for trading Crypto before DEFI. CEFI involves the use of companies operating exchange platforms like Binance, FTX etc
WEB 3.0
Web3 embraces decentralisation and is being built, operated, and owned by its users. Web3 puts power in the hands of individuals rather than corporations. Web3 is the answer to this dilemma that centralised systems put us into.
Instead of a Web monopolised by large technology companies, Web3 embraces decentralisation and is being built, operated, and owned by its users.( Power is in the hands of users).
Web3 has set out to break up the market power of these centralised players by replacing the centralised server-client infrastructure with distributed ledgers, the most common type being the blockchain. So instead of all data being stored on a centralised server, it will be scattered across a decentralised computer network. Centralised entities, which previously acted as intermediaries, will thus become obsolete.
DApps
Decentralised applications (dApps) are digital applications or programs that exist and run on a blockchain or peer-to-peer (P2P) network of computers instead of a single computer. DApps (also called "dapps") are outside the purview and control of a single authority. DApps can be developed for a variety of purposes including gaming, finance, and social media.
Because dApps are decentralised, they are free from the control and interference of a single authority. Benefits of dApps include the safeguarding of user privacy, the lack of censorship, and the flexibility of development which are not found in centralised applications like Google chrome for example.
WHITE PAPER - A white paper is a document that outlines what a cryptocurrency is created to do and how it will achieve it. More like a detailed road map. Put more succinctly, what the Project is about and how it aims to achieve it.
TOKENOMICS - This is a combination of Token & Economics. It helps understand the supply and demand characteristics of a cryptocurrency
COIN - There is a difference between Coins and Tokens. A coin is an asset that is native to its own blockchain. E.g Bitcoin, Ethereum, Solana, TRX etc
TOKENS - Tokens are created on existing blockchains. I.e Every cryptocurrency created under BSC, SOL, ETH or any other blockchain is not a coin but a Token. E.g $cake (Bsc), $rope (Sol), $UNI (Eth). Tokens are the backbones of DEFI & exist to be used with DEX.
MARKET CAPITAL - The total trading value of a cryptocurrency. Calculated by (Current Price x Circulating Supply= Mcap)
STABLECOIN - A cryptocurrency that is tied to the value of the US dollar to make it more stable and less volatile. E.g USDt, Busd
PUMP AND DUMP - This is kind of like a scam where people who own a large share of a Coin encourage others to buy to artificially pump the price. Once the price reaches a high point, they sell off all that they own and the price falls drastically.
GAS FEE - A fee for validating a transaction on an exchange or a DeFi wallet.
ICO - Stands for ‘Initial Coin Offering’, which is where a new cryptocurrency gives away some coins at a discounted rate usually to finance the project.
IDO - Stands for ‘Initial DEX Offering’ refers to the launching of a cryptocurrency on a decentralised exchange (DEX) usually at a price lower than the listing price in order to raise funds.
HODL - A drunken misspelling of the word ‘hold’ which is now a slang people use when they say they are going to wait and hold onto a cryptocurrency. It means to hold Crypto for a long time.
STAKING - the act of locking up your cryptocurrency in a liquidity pool to help secure the network and validate transactions. Then you earn a share of profit made from the pool. ( Explained more in the next Lecture).
FARMING - mostly the same as staking, just that in farming you need two different tokens.
NFT - (Non Fungible Tokens) NFTs enable people to buy and sell collectibles like art, music and trading cards using smart contracts. NFTs can work like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit. ( more elaborate in next Lecture).
. DYOR - (Do Your Own Research) often aims to reduce the number of uninformed investors in cryptocurrency. It encourages them to research and understand a cryptocurrency before investing.
BAGHOLDER - This term is for someone left with a cryptocurrency after a pump and dump. E.g Everyone holding Shitcoins after they fall.
NFA - (Not a Financial Advise) The term is also often used as a disclaimer when cryptocurrency traders and enthusiasts make public posts or share their market analyses on social media platforms.
The market cannot be 100% predictable and even a “Correct” analysis can fail so it’s important that users apply discretion while investing.
. WHALE - A crypto whale is a wealthy individual or a company that can move large amounts of cryptocurrency in one go. This can have a big impact on the market.
REKT Slang for ‘wrecked’. It implies that the user lost a lot of money on cryptocurrency.
MOON - A belief that a Cryptocurrency will rise exponentially in price.
FUD - (Fear, Uncertainty and Doubt) Events and news that create a negative effect on the market.
BULLISH - The upward movement of a market
BEARISH - The downward movement of a market.
FIAT - Government-issued currencies i.e Naira, Dollar
ABBREVIATIONS
HH (Higher High)
HL (Higher Low)
LH (Lower High)
LL (Lower Low)
Fib (Fibonacci)
TF (TF)
MN (Monthly)
W (Weekly)
D (Daily)
H4 (4 hour)
H1 (1 hour)
M15 (15 minute)
M1 (1 minute)
MS (Market Structure)
BOS (Break of Structure)
MOM (Momentum
HTF (Higher Time Frame)
LTF (Lower Time Frame)
RSP (Real Structure Point)
PRZ (Price Reversal Zone)
CPB (Complex Pullback)
M (Momentum)
RR (Risk: Reward)
TGT (Target)
SL (Stop loss)
BE (Breakeven)
PA (Price Action)
Liq (Liquidity)
EQH (Equal Highs)
EQL (Equal Lows)
SMC (Smart Money Concepts)
DD (Drawdown)
HNS (Head and Shoulders)
IT (Institutional Traders)
CO (Composite Operators)
HNS (Head and Shoulders)
IT (Institutional Traders)
CO (Composite Operators)
WHB (Weak Handed Buyers)
WHS (Weak Handed Sellers)
DP or POI (Decision Point) or (Point of Interest)
IMB (Imbalance)
SHC (Stop Hunt Candle)
OB (Order Block)
OBIM (Order Block with Imbalance)
OBOB (Lower timeframe Order Block within a higher timeframe Order Block)
WKF (Wyckoff)
PS (Preliminary Support)
PSY (Preliminary Supply)
SC (Selling Climax)
AR (Automatic Rally)
ST (Secondary Test)
SPR (Spring)
Test (Test)
SOS (Sign of Strength)
SOW (Sign of Weakness)
LPS (Last Point of Support/Supply)
LPSY (Last Point of Supply)
BU (Back-up)
JAC (Jump across the creek)
UT (Upthrust)
UTAD (Upthrust After Distribution)
TR (Trading Range)
WAS (Wyckoff Accumulation Schematic)
WDS (Wyckoff Distribution Schematic)
IT (Institutional Traders)
CO (Composite Operators
LP (Liquidity Providers)
POC (Point of Control)
VAH (Value area high)
VAL (Value Area Low)
