Key Things You Must Know Before Investing in Cryptocurrency as a Beginner

Staking in Cryptocurrency - How it Works


It is very easy to get lost, confused, and frustrated with cryptocurrency and its technical terminologies. It gets even worse if one as a newbie is trying to invest in cryptocurrency or participate in its activities such as airdrops, staking, and mining, etc. It is very important to get acquainted with the key concepts of cryptocurrency, this article will judiciously explain the key concepts in the simplest of times.


A blockchain is an open system that keeps the records of transactions of cryptocurrencies carried out within a network. Imagine the blockchain as a very big ledger (digital ledger), so big that it has to be stored across different computers. So, when each transaction is made, a block is created (in other words, a record is kept). The record-keeping is unalterable and publicly accessible at the same time.

Crypto Asset

An asset generally means anything that has value. The same thing applies in crypto; a crypto asset is a term for anything that has value in the blockchain network. Think of anything that has value or can be traded or exchanged in crypto as a crypto asset.


This is a native coin of a particular blockchain network. Different types of blockchain we have include Bitcoin Blockchain which is the first, Ethereum Blockchain, Smart Chain, Tron, Algorand, Solana, etc.

The native coin of the Bitcoin blockchain is BTC itself. ETH is the native coin of the Ethereum blockchain. SOL is the native coin of the Solana blockchain, BNB is the native coin of the Binance Smart Chain. ALGO is the native coin of the Algorand network while TRX is the native coin of the Tron network and so on.

Crypto Token

This is a crypto asset that does not have its primary blockchain network i.e., it is created on another blockchain. For instance, there are hundreds of tokens built on the other blockchains.


This is the first cryptocurrency created by Satoshi Nakamoto. It is also the most valuable cryptocurrency. The price movement of Bitcoin (BTC) generally affects the price movement of the other alternative coins or tokens. Ideally, it is the most reliable crypto to invest in.


Bitcoin is the most popular cryptocurrency. Any other crypto coin or token that is not BTC is an altcoin.

Wallet in Cryptocurrency

This is personalized storage for cryptocurrencies. There are hot or cold wallets. Hot wallets are online while cold wallets are offline.

Exchange in Cryptocurrency

An online avenue where cryptos are being exchanged.

Peer to Peer (P2P) in Cryptocurrency

This is a term that defines the communication between two crypto users.


A term that denotes the presence of a third party or middleman in a crypto transaction between two people. This middleman collects, holds, and transfers the crypto until the payment is completed by the buyer.

Public Key

This is your wallet’s address. This is what you send to receive cryptos. It is just like an account number but with random numbers and letters instead.

Private Key

This is some sort of security protocol that protects your crypto.  Similar to a bank password or an ATM card pin, it should never be sent to a person.

FOMO in Cryptocurrency

This is an abbreviation for ‘Fear of Missing Out. It denotes the psychological thought process that surrounds a potential investor’s mindset on a currently pumping coin. Simply put, this is when you buy a coin that is currently doing well in the market just because you don’t want to miss the opportunity of making profits from it. This can be a risky move as it mostly results in losses because price tends to fall when the big whales have taken their profit.


This term means “Hold on For Dear Life”. It means holding on to an asset even after the price movements are significantly changing. It can be a very good strategy while at the same time very damaging. It is subjected to the individual and the token itself.

Sh*t coins

Oh! From the word sh*t, one could tell that this relates to coins that have little or no value. The reality is that these are coins that pumped at outrageous percentages at some point before becoming worthless. It all depends on the timing that one gets into it. Shit coins have the potentials to turn a few dollars into hundreds of thousands and vice versa


This means ‘Do Your Own Research’. This has proven to be one of the most important things to do before putting money into a coin. One needs to research crypto coins, especially new projects.

Studying their charts, checking the team behind the project, use cases, design can help to determine the credibility of a project. All crypto investors must possess and use this skill.

Whitepaper in Cryptocurrency

This is a document that explains the solution to a particular problem and the mechanisms behind the solution. It is the best document to help one decide on a particular project. A credible crypto project would have a well-written whitepaper drafted.

Other Important Tips

Join a crypto group

It is a good idea to join a group or channel of fellow crypto people. This is the best place to get direct opinions about projects, market trends, and trending crypto topics. While there are plenty of WhatsApp groups, Telegram groups and channels, Discord channels, and popular social media communities such as Facebook, Reddit, Medium, Twitter, etc.

It is however important to be wary of scammers and phishing groups that are set up to take advantage of one’s strategy.

Investment Strategy

This is equally a very important concept. There are various ways in which a person can make money from cryptocurrency. One method is buying coins at very low prices and holding them for the long term until they pump.

Another strategy is exploiting the volatility of the crypto market. Buying coins and steadily taking profits between each pumped window. This strategy requires time and dedication.

Participating in airdrops, ICO offerings, staking, and mining are other ways to make earnings in cryptocurrency. The key is determining what works best for you.


Getting familiar with these terms is very important. Becoming a pro-crypto trader or investor would be an easier process. To manage and maximize funds in crypto, a trader must learn how to manage his time, research skills, patience, dedication, and lust for money. Pick an investment or trading goal and stick with it.

The Author

Awoyele Olanrewaju

Lanre is a professional writer with over eight (8) years of experience. He has created various content across multiple niches such as business, academic, grant research, and cryptocurrency.

His research and writing skills have helped start-ups and non-profit organizations secure grants. He has also worked with different De-Fi organizations such as Algorand, Bluezelle, and EasyFi, and Status to create amazing cryptocurrency content.