Trading platforms are where much of the wealth-generating action is taking place in the crypto world today, and navigating these different exchanges is no easy feat. From spot to derivatives, centralized to decentralized exchanges, even seasoned traders are likely to come across a new term or two on the platforms they use.
In this week’s Crypto Terminology A to Z, let us start off with three cardinal exchange-centric terms beginning with the letter ‘K’.
Public and private keys, or key pairs, were created due to the need for secure and encrypted crypto transactions that are safe from vulnerabilities on the digital plane. Keys are a string of randomly generated letters and numbers that essentially aid in proving that a particular transaction has been digitally signed by the owner of these keys, rather than an impersonator or malicious actor online.
Similar to how an email address and its corresponding password work, public keys can be viewed by others in public depositories such as blockchain explorers while private keys are unique and known only to their individual owners. As its name suggests, private keys should not be shared with others as it provides access to the key owner’s crypto assets. Unlike how email systems work, however, there is no “forget password” option with cryptographic keys. Once you lose your private key, you lose it forever.
Killing or canceling an order using the FOK command is particularly useful in crypto trading, where traders are facing time constraints and do not wish to see their orders being executed partially over an extended period of time. These are typically carried out when traders are looking to profit from small price differences within a small time window.
KYC procedures involve a prospective trader providing proof of their identity and other personal information such as passport and identification numbers, residential address, and even pictorial evidence that this trader is who they claim to be. The extent of stringency varies from one exchange to another, with some requiring KYC when traders create an account and others only when they are intending to make transactions or withdrawals that go beyond a specific threshold.