Understanding cryptocurrency means taking a few vocabulary lessons

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Tracking the ups and downs of digital currencies is only possible if you understand the language of the market.

The fortunes of cryptocurrency have soared and fallen several times this year due in part to Elon Musk's running commentary and new rules from the Chinese government. The entrepreneur's Tweets and public statements have been mostly good for the digital currency while no good news has come from China's leaders.

SEE: Cryptocurrency glossary: From Bitcoin and Dogecoin to hot wallets and whales (TechRepublic Premium)

According to CNET, financial analysts watching the price of Bitcoin have been using $29,026 as a baseline measure of the health of the market. The currency ended 2020 at that price and briefly dropped lower in late June. CNET's Daniel Van Boon wrote in "Bitcoin, Dogecoin and Ethereum are crashing. Here's why" that Dogecoin has dropped more than 17.6 cents down from a high of 70 cents back in April. Also, Bitcoin slumped to around $29,500, a fall of more than 10%, while Ethereum has crumbled 15%. The drop in Ether's value affects thousands of altcoins also because many of those coins are built off the Ethereum blockchain and have a chunk of their value weighted in Ether coins.

SEE: Cryptocurrency glossary: From Bitcoin and Dogecoin to hot wallets and whales (TechRepublic Premium)

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Tracking the changes in the market is one challenge of buying and selling cryptocurrency. Before you get to that point, you have to understand the vocabulary of the market. If you can't explain how hot wallets work or what happens if you get goxxed, you're probably not ready to make any investments just yet. 

 If you want to know more about cryptocurrency than cryptography, check out TechRepublic Premium's cryptocurrency glossary. This collection includes definitions for 50 common cryptocurrency terms. You'll be able to tell the difference between a blind signature scheme and formal verification and explain how hard forks and hashing work.  

Mastering the language of cryptocurrency will help you understand how to navigate the market as well as how much weight to put in comments from cryptocurrency traders and the government leaders trying to regulate the markets. 

SEE: Cryptocurrency glossary: From Bitcoin and Dogecoin to hot wallets and whales (TechRepublic Premium)

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