Everyone is new to something at one point, if you are entering the Bitcoin world today because the recent price crash caught your attention the way it did mine years ago, then first off welcome! You'll have a lot to learn and understand before throwing your money around cause you see, when it comes to Bitcoin and particularly those thousands of other cryptos out there, many people I know who have been holding certain coins/tokens for years are somehow still not aware of even the most basic terms. I often hear them ask questions that make me stop for a moment and wonder if they are trolling me or if they are actually sincerely asking😂. Yes it has really come to that, I mean you'd expect someone who the past two years held a portfolio that for 75% was made up of ERC20 tokens, to at least know the difference between a coin and a token, but no. So on that note, it begins:
Coin: Runs on it's standalone independent blockchain. Bitcoin is thus a coin and has it's very own chain where it's native coin can be transacted on, but not all cryptos that are coins have the term "coin" in their name. Some popular names you might be familiar with such as Waves or Cardano are also coins, while the recently trending Apecoin is actually a token that runs on the Ethereum chain.
Token: Runs on a host blockchain based on smart contracts e.g. NEP5 of Neo or in Apecoin's case on the ERC20 of Ethereum. A token can thus never have an own blockchain.
"I don't care, where can I buy them coins and tokens" you ask? Well how wise of you to throw your money in something "you do not care" to know more about, let me show you what your future looks like:
Are we coming back to our senses now? "Yes, sorry, the FOMO just sometimes really gets a hold of me". That's alright, it happens to all of us but remember, slow and steady wins the race. So, on ranking sites such as Coingecko or Coinmarketcap, first you click on the coin or token you want and then scroll down to find the tab "market" right next to the price overview chart. Here you'll find (almost) all the exchanges you can get that particular coin or token at. Also note the available pairs, it can save you some unnecessary double trading.
Public keys: This is directly linked to the Bitcoin address(es) your wallet has, as a matter of fact the public key is basically used to create a shortened version which is the address. This address is comparable to your IBAN or bank account number, you share this info with the outside world so they can send you funds. When you send out funds your public key will be known but that's not a big deal as the hint is in the name, these keys are "public" and can be known to the outside world. But beware that unlike with your bank account info such as SWIFT and BIC code where no one can see your transaction details and how much value your account has, with your address or public keys they can view all of that. Well for most cryptos anyway, certain others like Monero are specifically designed against that.
Private keys: This is comparable to your password for your online banking with which you can login and send out funds. You logically never share your password right? So you never share your private keys! Be aware though that you have safe backup plans in case you yourself ever lose your keys, like an offline safe place where you've stored your seed phrase aka mnemonic recovery. This is the random 12-24 words you get when you first create your wallet.
"I have a Binance wallet and never got any keys or phrases" you say? Well then behold:
Wallet: Your very own bank to which you solely control the public and private keys aka complete control. Here you can manage, send and receive cryptos, and nowadays some wallets offer third-party/defi exchange options so you can also trade directly via your wallet, which can be a bit confusing to newcomers as to what the difference is between your exchange account and your wallet, but do not despair:
Exchange: Not your very own bank but a place where if centralized you actually have less security and guarantees than you would with banks in most countries. Coinbase is thus a centralized exchange and one where many have lost their funds to due to weird and often unjustified account freezing. But this isn't always the case as there are different types of exchanges as well:
Centralized: It can get complicated but let's keep it simple; Whenever there's authority over you and some jagoff from hundreds of kilometers away from your home and PC can meddle in your affairs, you are dealing with centralization. When you go to login to your Coinbase account and see "account restricted" that's the power of centralization at work. In some countries exchanges are obligated by law to keep track of all the crypto addresses you use, every time you want to send even 1 Luna (yes, even at 0.0001 cent value) to a new address, you first need to send this address to the exchange who'll by law needs to check, store and verify it before they'll process it. These examples are the centralized authorities that restricted you from your own property and stored your info in a centralized database. These are thus centralized exchanges aka CEXes.
Decentralized: Unlike the centralized exchange that needs to verify and approve your ID, transaction, limitations etc. decentralized exchanges and wallets know no such thing, even if you are in one of those 💩🕳️ countries that obligated it. There simply is no central authority that can/needs to verify anything as you yourself need to connect your wallet to the exchange and the transactions are on-chain. Some of the most used DEXes are UniSwap, 1Inch and 0x. Then there are some semi-decentralized exchanges where you can connect your own wallet to but that use their own servers and off-chain order books to store data such as IDEX.
PoW: Again one of those things that can get complicated but to keep it as simple as possible, Proof of Work relates to one of the two consensus mechanisms being used to validate transactions on the blockchain. With PoW it's the computer (GPU/CPU) power that does the mining by solving complex mathematical equations which is a basic part of cryptography hence the name "cryptocurrency".
PoS: Proof of Stake is where holders/miners use their crypto stack instead of computing power and was developed as a proclaimed "improvement" to PoW which indeed uses more energy but has over the years also passed the test of time and is considerably more secure, so don't let any political misleader or fake news employee convince you Bitcoin's PoW is the core cause of "energy consumption and pollution", they can look much closer at home for that:
Last but not least, the total number of supplies.
Circulating supply: The total amount of coins in public circulation i.e. available at exchanges or already bought at exchanges and stored in (offline) wallets.
Total supply: Total number of coins that have been created to date. If you'd put this into a formula you'd get something like: Circulating supply + coins locked or held by creators/early adapters without sale - already burned coins. So very, very basically speaking, if the circulating supply is 10.000 and the total supply 100.000 you might want to research where that other 90.000 is before loading up on these coins🧐. Translation: Don't trust them to be your bro. NFY can tell you all about it.
Max supply: The total number of coins that can/will ever be created. The number 21 million should tell you something here😉.
