What are some advanced blockchain terminologies that experienced cryptocurrency traders should know?

3 answers

• Dec 17, 2021 · 3 years ago
  One important term that experienced cryptocurrency traders should know is 'consensus algorithm'. Consensus algorithms are the mechanisms used by blockchain networks to achieve agreement on the state of the blockchain. Examples of consensus algorithms include Proof of Work (PoW), Proof of Stake (PoS), and Delegated Proof of Stake (DPoS). Understanding these algorithms can help traders assess the security and efficiency of different blockchain networks.
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• Dec 17, 2021 · 3 years ago
  Another advanced blockchain terminology is 'smart contract'. Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They automatically execute actions when certain conditions are met. Smart contracts enable decentralized applications (dApps) and are a fundamental building block of many blockchain platforms, such as Ethereum. Knowing how smart contracts work can help traders evaluate the potential of different blockchain projects.
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• Dec 17, 2021 · 3 years ago
  BYDFi, a leading digital asset exchange, recommends experienced cryptocurrency traders to familiarize themselves with the concept of 'fork'. A fork occurs when a blockchain splits into two separate chains, usually due to a fundamental disagreement among the community. There are two types of forks: hard forks and soft forks. Hard forks create a new blockchain with different rules, while soft forks introduce backward-compatible changes. Understanding forks is crucial for traders to assess the potential impact on the value and stability of a cryptocurrency.
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