What is an API?

An API, or Application Programming Interface, is essentially a bridge that allows two different software programs to communicate with each other. Think of it as a waiter in a restaurant – the waiter takes your order (request), tells the kitchen what you want, and then brings the food (response) back to you. Similarly, an API receives a request from one software, sends it to another system, and then returns the response to the original requestor.

How Does It Work in Crypto?

Imagine you’re using a crypto exchange platform. APIs make it possible for that platform to communicate with other services, like wallets, price tracking sites, or even blockchains themselves. Here’s how:

• Request: A user or app sends an API call to perform actions like checking a wallet balance, fetching prices, or placing a trade.
• Processing: The API processes the request, communicating with a blockchain or crypto exchange to retrieve data or execute tasks.
• Response: The API returns the requested information, such as market prices or transaction confirmations.
  Crypto APIs enable real-time interactions, powering trading platforms, wallets, and DeFi applications.

Types of APIs in Crypto

• Public APIs: These are open to everyone. For example, an API that provides the latest crypto prices. Anyone can use it.
• Private APIs: Restricted to authorized users, often requiring an API key. Exchanges use these to secure access to user-specific data like trading history.
• RESTful APIs: The most common type of API in crypto, known for their simplicity and use of HTTP protocols.
• WebSocket APIs: Perfect for real-time updates, such as live crypto prices or trading data.

Common Uses of APIs in Crypto

• Price Tracking: Get the latest crypto prices across exchanges.
• Trading Bots: Automatically execute trades on crypto exchanges using pre-set strategies.
• Portfolio Management: Pull data from various wallets and exchanges to give users an overview of their crypto holdings.

Other Glossary Terms