If you’re new to the crypto world, the lingo can be a little…. well…. confusing.
There are acronyms, abbreviations and even animals make an appearance (hello Bull and Bear market). And while it can be tempting to bury our heads in the sand or delay our crypto education until later, remember this:
An investment in your education will always pay dividends in the future.
In my experience, being familiar with the terms will open up a whole new world of understanding. And if you believe crypto is the way of the future (and I know you do), then education is inevitable.
So we might as well start today, right?
Exchange: An Exchange is an online platform or website where you buy, sell or trade crypto. Coinspot and Binance are both examples of popular exchanges.
Wallet: Just like in the real world, you hold your crypto money in a wallet, and there are generally two types:
Alt Coins: Short for Alternative Coins and refers to any type of cryptocurrency other than Bitcoin.
Bull Market & Bear Market: These terms refer to prices either rising (Bull) or falling (Bear). An easy way to remember which is which, is to think of the Horns of a Bull going up (prices rising), and the claws of a Bear swiping down (prices falling).
CeFi: Centralized Finance means that all crypto trading is channelled through a central Exchange, which means being subject to the rules of that Exchange, plus any limitations they want to impose. CeFi used to be the standard way of trading before DeFi came along.
DeFi: In our opinion, Decentralized Finance is where the big opportunity is. Everything you can do in CeFi, you can also do in DeFi, but without the middle man or banks taking a clip along the way. Transacting through DeFi is fast, flexible and fully transparent. Not to mention, it gives us complete control over our finances. Hooray for that!
ICO: Initial Coin Offerings are a form of capital raising that helps companies launch new coins – similar to crowd funding. ICO’s offers the potential to invest early and at a great price. If the coin is successful – you’re already ahead of the game.
IEO: Initial Exchange Offering is similar to an ICO but conducted by an online Exchange, rather than the creator of the coin. This gives the Exchange control over who invests and they can screen or vet potential investors.
NFT’s: Non Fundable Tokens are digital collectors’ items. They exist only in the digital universe and can be anything from artwork to music to memes. NFTs are completely unique and, just like with any other collector’s item, their value comes from the proof that you own the original copy.
Correction: Corrections refer to a rapid drop in price after a long upward trajectory. E.g. we were in the longest Bull Market in Bitcoin history until earlier this year, so we were due for this current correction.
Staking: A way of earning interest on your crypto by depositing it for a fixed period of time (like term deposits at a bank but with a much better interest rate). The longer your staking period, the better returns you’ll get.
FOMO: I’m sure we’re all familiar with Fear Of Missing Out! In crypto land, FOMO can cause you to jump on a bandwagon simply because everyone else is doing the same (which isn’t always the strongest play).
FUD: Fear, Uncertainty and Doubt. Unfortunately, FUD is rife in the Crypto world! It’s often used by the mainstream media to drive a certain crypto narrative (whether pro or against). That’s why we recommend switching off the mainstream media and focusing on the bigger picture. Because, as we all know, we’re in it for the long haul.
Airdrops: A marketing strategy where crypto is distributed to wallet addresses completely unsolicited, usually to promote a new platform or service. (Kind of like when U2 dropped their album into everyone’s iTunes back in 2014…).
Crypto Winter: A long period of time in a bear market is often referred to as crypto winter. It’s also a good time to be loading up on crypto!
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