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New Kids on the Block(chain) Crypto Lingo and Debunking Myths

14 August 2023


As the markets experience a lull and development takes a breather during the summer months, it's an opportune time to reflect on the journey thus far. While we contemplate the essential elements for global adoption of crypto, Web3, and DeFi, we realize that it's not just about the technology and user-friendliness; it's also about fostering social inclusivity. While significant progress has been made in this regard over recent years, it often feels like we're residing in a social bubble, struggling to bridge the gap between traditional and blockchain realms. The underlying simplicity of Bitcoin's technology contrasts with the complexity of newer projects, such as layer-1's and layer-2's, which can be baffling to newcomers. This complexity doesn't merely hinder the introduction of fresh minds; it often discourages them entirely. As we will see, it is not just the technology that has become more complex, but also the social environment. This article aims to close the divide and clarify some of the confusion that has accumulated over time.

In the midst of the Web3 revolution, a distinct lexicon has emerged. The landscape of new terms is evolving so rapidly that even I, a seasoned crypto enthusiast, come across 2-3 new words almost every week. Here, we unveil some of the most commonly used terms in the cryptocurrency sphere, enabling you to partake in conversations and stay updated as VanEck guides you through the latest trends. Here are some of the most commonly used slang terms in the cryptocurrency world, so you can understand the conversation and stay up to date while VanEck takes you on a journey on the latest trends. This is a side some crypto native folks may not be proud of but it is an inherent part of the ecosystem that we should not ignore.

Explaining Crypto Lingo:

  • WAGMI (We Are Gonna Make It): WAGMI is an acronym expressing optimism within the crypto community that a particular investment will be successful.
  • NGMI (Not Gonna Make It): NGMI is used humorously to acknowledge that something might not turn out as expected, often referring to an investment.
  • CT (Crypto Twitter): CT refers to the crypto community on Twitter, where enthusiasts, investors, and experts share news, opinions, and insights about cryptocurrencies.
  • Shill: To "shill" means to promote or endorse a cryptocurrency or project, sometimes excessively or insincerely, often with the intention of persuading others to invest.
  • FUD: “FUD” stand for “Fear, Uncertainty and Doubt”, a short term to describe a complex set of emotions to describe any form of communication of which its sole purpose is to induce pessimism towards a particular asset or market.
  • Rekt: "Rekt" is a playful variation of the word "wrecked." It's used to describe significant financial losses due to bad investment decisions or market downturns.
  • Whale: A "whale" refers to an individual or entity that holds a large amount of a particular cryptocurrency, potentially influencing the market due to their holdings.
  • Rugpull: A "rugpull" occurs when the creators of a cryptocurrency project suddenly exit, taking investors' funds with them, indicating a scam.
  • Moon: "To the moon" is a phrase expressing the belief that a cryptocurrency's value will significantly increase.
  • Flippening: The "flippening" refers to the event of one cryptocurrency overtaking another in terms of market capitalization or other metrics, such as Ethereum surpassing Bitcoin.
  • Paper/Diamond Hands: "Paper hands" are investors who sell quickly under pressure, while "diamond hands" refers to those who hold onto their investments despite volatility.
  • Probably Nothing: A term used humorously to downplay potential significant market events such as a partnership or upgrades
  • Degen: Short for "degenerate," it's used to describe an investor showing risky or speculative behavior.
  • Few: Short for "few people understand." Refers to a perspective an individual thinks is important but not enough people are aware of.
  • Based: A term of approval or agreement within the community. Although more common in online political slang, it is often used in the cryptocurrency ecosystem.
  • Fren/Ser: "Fren" is a playful term for "friend," and "ser" is a playful variation of "sir," both used to address others within the crypto community.
  • Copium/Hopium: These terms playfully describe irrational optimism about the future of an investment, often despite evidence to the contrary.
  • Aping: To invest without much research or due diligence, often following others' decisions.
  • Exit Scam/Exit Liquidity: An "exit scam" refers to a cryptocurrency project shutting down and disappearing with investors' funds, while using someone or something as "exit liquidity" refers to selling a significant portion of one's holdings by leveraging an open position or often irrational demand from other market

Now, armed with this crypto lexicon, you can confidently engage in native crypto discussions without feeling excluded, enabling you to join the conversation shaping the evolution of the financial world. Now on a more serious note, let’s talk about myths. From my personal journey, I've observed that the distinction between a crypto advocate and a skeptic doesn't solely stem from misconceptions about crypto’s social system, but also from the persistence of common crypto myths. So, if you find yourself or a fellow ‘’fren” teetering on the edge of entering into the crypto realm but remain hesitant due to "FUD," it's likely due to one of these myths. Note that there may always be some truth in myths, results are easy to misinterpret or misunderstand.

Crypto Myths

  • Crypto is Used only for Speculation and Crime: While speculation exists, cryptocurrencies have broader applications, including decentralized finance, supply chain management, and identity verification. While some illicit activity occurs, it's not representative of the entire crypto space.

Illicit Share of All CrytoCurrency Transaction Volume

Source: Chainanalyis, Crime report 2023. It should be noted that this only accounts for crimes that were discovered leading to some uncertainty about the actual values.

  • Crypto Does not have Intrinsic Value: Cryptocurrencies hold value as a medium of exchange, store of value, and for powering decentralized applications. While it is true that cryptocurrencies often do no have material value similar to gold, their scarcity and utility provide intrinsic value. For example, the native currencies on smart contract platforms have intrinsic value because they play a vital role in enabling and incentivizing various types of users such as validators, DApp users and developers.
  • Crypto is like a Gateway Drug to Illicit Activity: Due to the potential immutable nature of the blockchain, crypto's transparency and traceability may aid law enforcement in reducing illicit activities which could lead to the identification of the ultimate beneficiaries of illegal activities. It's also known as a gateway to innovation, financial inclusion, and efficiency. The technology of Web3 and DeFi has opened the doors for a plethora of use-cases that were previously thought to be impossible or impractical. However, investors should be aware of the risks of investing if digital assets such as market risks (volatility risk, risk of total loss), technology risk and regulatory risks.
  • Crypto is used for Tax Evasion: Cryptocurrency transactions are increasingly subject to taxation. Many jurisdictions require reporting of crypto gains, and legitimate tools exist for managing taxes. The important thing to mention is the lack of clarity and regulation regarding holding and trading cryptocurrencies in many jurisdictions creating possibilities for regulatory arbitrage.

Europe Tax Rates for Crypto

Source: VanEck Research, Coincub, 2023. Your personal situation might be different and might not allow you to make use of an advantageous tax rate. This information is not meant as tax advice, please contact your tax advisor to understand what tax applies to your specific situation.

  • Crypto is a Bubble waiting to Burst: Blockchain technology has transformative potential, and many projects are solving real-world problems. While markets can be volatile, not all projects are driven solely by speculation. A better way to describe Bitcoin and other cryptocurrencies in terms of their price performance is using market cycles. Clear patterns seem to emerge, strongly correlated with halving time (the algorithmically defined time at which mining rewards decrease). Please note that past performance is not an indicator of future results.

Bitcoin Market Cycles (Centered at ATH and percentage of ATH)

Source: Messari, data as of August 2023. Past performance is not a guarantee for future result.

Bitcoin is increasingly being used as part of a broader investment strategy to hedge against inflation and global political instability akin to gold. That is why VanEck often refers to Bitcoin as a form of digital gold, a store of value and unlike gold, also a convenient payment method and common unit of account in the cryptocurrency ecosystem.

  • Crypto will become Illegal: Many countries recognize the benefits of blockchain technology. While regulations may evolve, outright bans are possible, but unlikely due to the technology's potential. Actually quite the opposite, crypto is being embraced as innovative technology on a global level by governments, organizations and individuals. Users and investors of digital assets should be aware that there are countries where crypto generally prohibited.Take for example PayPal’s PYUSD stablecoin, launched on Ethereum recently, contributing to Ethereum’s network revenue and therefore creating demand for the native token Ethereum.

Crypto Regulation in 2023

Source: VanEck Research, Elliptic, data as of 2023. This data may be inaccurate and should not be used as advice.

  • All Crypto are the Same: Cryptocurrencies have diverse use cases, from digital payments to smart contracts and privacy-focused transactions. They differ in design, technology, and purpose. Visit our Crypto Academy to learn more about the differences between the various cryptocurrencies, their use-cases and underlying technologies.

VanEck Identified 8 Primary Categories

Source: MarketVector, data as of August 2023.

To conclude, for our readers who feel left out of this fast moving space because its hard to keep up with vast collection of crypto lingo or due to misunderstanding of common myths, I hope this article has been of great value and may have changed your view on crypto in a positive way. Now is a great moment to take some time and learn more about the technology through our Crypto Academy.

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