Crypto Terminology and Concepts for Noobs

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New to #crypto? Here's some basic terminology and concepts to get you started... + some pro tips for navigating Crypto Twitter at the end. 👇 🧵

Basic Terminology: • Wallet: A wallet is your gateway to crypto. Wallets can store and send crypto, and can connect with and interact with decentralized apps. • Dapps or Decentralized apps - these are apps built on a decentralized blockchain.

Web2 vs Web3 • web2: Centralized web (most of the internet): Facebook, Twitter, etc • web3: Decentralized web, apps are built on decentralized blockchains. Typically, web3 apps will not require an email login, but will just ask you to connect with your wallet.

• Fiat: Regular government-issued currency that is not backed by a commodity like Gold. USD, CAD, GBP, EUR, INR, etc are all examples of fiat currency. Here's the problem with fiat currency right now according to BTC bulls: twitter.com/momentum_6/status/1504782731821019140?s=21&t=EjxZKWqOTWfxTWP4finVsg

• Stablecoins: Coins that are pegged to a fiat currency like USD, (or to an asset like Gold). Some popular stablecoins include $USDC, $USDT, $UST, $DAI, $FRAX Here's a video I made about stablecoins: youtube.com/watch?v=knKaEfyZZAM

• Fungible Tokens: My BTC coins are the same as anyone else's BTC coins. i.e - Cryptos like BTC, ETH, etc are fungible. So are fiat currencies like USD. • Non-Fungible: The Mona Lisa is perfectly unique. It is a one-of-a-kind asset. The Mona Lisa is non-fungible.

• NFTs or Non-Fungible Tokens: They are most commonly used for digital art and collectibles right now, but they can also be used to represent other one-of-a-kind assets like property, ownership rights, identity, memberships, etc. youtube.com/watch?v=RAQx-2BrrAk

• Centralized Exchange (CEX): Exchanges like @Binance, @coinbase, @kucoincom, etc. Typically they use an order-book model to facilitate exchange of assets.

• Decentralized Exchange (DEX): Exchanges like @Uniswap, @SushiSwap, @SpookySwap, @traderjoe_xyz. Typically they use an Automated Market Maker (AMM) to facilitate exchanges

• Airdrops: New crypto projects may send tokens to wallets that have used their dapp when they launch a token. This is meant to encourage adoption + help with marketing. Famously, @Uniswap airdrop holders received 400 $UNI tokens which would have been worth ~$18k at ATH.

• ATH: All-Time High • CT: Crypto Twitter • Pump: Coin price go up • Dump: Coin price go down • Rekt: Get wrecked (destroyed)

• Ape: Invest into a project ASAP (typically without doing DD) • DD: Due Diligence • FUD: Fear, uncertainty & Doubt (bearish) • FOMO: Fear of missing out (bullish) • Bridging: Transferring assets from one chain to another.

• Pump & Dump: A scam where a group (on telegram usually) will make coordinated buys on a coin to pump up the price, and then sell it very soon after. The chart for a pump and dump might look something like this over a very short time frame (a few mins or hours)

• Ponzi: A common scam where current investors are paid dividends from new investors only (with no plan or path for long term sustainability) en.wikipedia.org/wiki/Ponzi_scheme

• Shill: Shillers will try to promote a coin by spamming about it all over crypto twitter. Typically, this is either because they were paid to do so, or because they are trying to pump their own bags.

• Phishing: Hackers may try to "phish" sensitive information from you by sending you fake links that look like real links.

• Maxi: A Bitcoin Maximalist or Maxi believes that Bitcoin is the only cryptocurrency worth holding, and that everything else is a scam or shitcoin. You'll find maxis for other altcoins as well.

• TA (Technical Analysis): Analysis based on looking at chart patterns, technical indicators, support and resistance levels, moving averages, etc.

• FA (Fundamental Analysis): Analysis based on the fundamentals of a project such as use cases, adoption & growth, protocol revenue, tokenomics, supply & demand drivers, etc.

• Miners / Validators: They sign the transaction and verify that it is correct. • Consensus Mechanism: The mechanism by which all miners or validators come to an agreement about the state of the network. Different blockchains may use different consensus mechanisms.

• Proof-of-Work (PoW): The consensus mechanism used by the Bitcoin blockchain (and some others) to come to an agreement. In this, miners compete to solve a complicated math problem to verify the block, and win the block reward.

• Proof-of-Stake (PoS): A consensus mechanism used by many other blockchains, where a validator must "stake" some of their own crypto in order to incentivize them to validate transactions correctly. Good validator = interest on crypto 💰 Bad validator = crypto slashed 🗡️

Now for some DeFi terms: • APR: Annualized Percentage Rate (for loan, interest, or yield typically) • APY: Annualized Percentage Yield (for loan, interest, or yield typically) twitter.com/magikinvestxyz/status/1512164430544470016?s=20&t=dzyrGKnz6ZB2edk76j8ZBg

Liquidity Pools twitter.com/momentum_6/status/1482006875373723652?s=21&t=EjxZKWqOTWfxTWP4finVsg

Impermanent Loss twitter.com/momentum_6/status/1494376714063028225?s=21&t=EjxZKWqOTWfxTWP4finVsg

Navigating Crypto Twitter: • Symbols for #cryptos are denominated with $ tags. Example: $BTC, $ETH, ... • Click on these to read top posts about the coin. Note: with so many coins in the space, many coins might be using the same symbols so use common sense.

• Bonus: no one uses these terms accurately (not even us), but here's the difference between a Coin and a Token twitter.com/momentum_6/status/1494376714063028225?s=21&t=EjxZKWqOTWfxTWP4finVsg

Here are some DeFi concepts we want to write an overview of and expand on in future threads: • L0 / L1 / L2 • Interoperability • Bridges (🧵) • Yield Farming (🧵) • Nodes • Launchpads • Different types of stablecoins (🧵) • DeFi 2.0 • FaaS • Boosting ...

Pro Tips for CT: Now that you're a pro user, try this • Search "from:@momentum_6 min_retweets:50" in the twitter search bar. You can do this to find popular posts by a creator.

Here's an awesome guide by @buffer for advanced Twitter search features: buffer.com/library/twitter-advanced-search/

You can read the unrolled version of this thread here: typefully.com/Momentum_6/1IxFJjo