25 – Crypto Jargon – The Phrases You Hear but Don’t Understand Explained!

Craig: [00:02:38] Welcome to the crypto curious podcast designed to help you navigate the dynamic world of cryptocurrency. This podcast is here for anyone who is interested in crypto at all. Maybe you've already dipped your toe in the water, or maybe you don't know anything about it, and this is the very beginning. Crypto curious is the place to get soul as we cover up all the basics that you need to know for new listeners, we recommend heading back to the early episodes to get your footing. However, if you think you're ready to dive in, let's crack on. Now you're probably wondering, you know does Tracey have a cold? This is Craig hosting today. Tracey is enjoying her leave. Where is she, Blake? 

Blake: [00:03:19] I think she's in Albany, which is the south southernmost tip of Western Australia. We apologise to anyone that comes here just to listen to Tracey. Unfortunately, just the boys today. 

Craig: [00:03:28] Today we're back with episode 25 and we're going to talk about jargon. So you've got Blake, who's a bit of the professor and myself who love to speak the crypto jargon, and not many people know what we're talking about.

Blake: [00:03:41] It can be super confusing when you're participating in this sector because it has its own language and its own culture, its own humour, and as a result, you know, all these analogies and and jargon that go along with it. And, you know, today, I think it's going to be helpful just to hit some of the more common ones and maybe some of the less common ones. So you can, you know, find yourself navigating through the sector a bit more easily. And one you know that we refer to quite often, Craig is DACA, which stands for dollar cost averaging and dollar cost averaging is an investment strategy of instead of buying a lump sum, just spreading it out over a period of time. So you're, for example, buying, you know, $100 a week instead of, you know, $400 at the start of a month. 

Craig: [00:04:26] Yeah. Another one that you'll probably hear in the chat rooms when the price is down is HODL HODL. A bit of a funny one. So this started out in 2013 in a forum on Bitcoin talk. And you remember this story, Blake? It was this guy, and he was posting about bitcoin. I think it was like, you know, Dollars at the time, it was nowhere near what it is now. And you know, I think you had a few whiskies and he was saying, You know, I'm just going to HODL. And now that sort of stuck in the sector as a way to, you know, for people to say that they're hodling, no matter what the price is. Yeah. 

Blake: [00:05:02] And it was basically a typo from someone trying to type in holding. 

Craig: [00:05:06] I wonder, where is that now? You must be doing well for himself. But you know, we've cut off the main ones that you probably hear, but we'll get stuck into some of the more complicated ones. You know, we've got Dave Fire, which means decentralised finance web three, which we've spoken about in episode 11. What about the ones you might hear in Discord, Blake? What about BTD? 

Blake: [00:05:29] Yeah, BTD often refers to buying the dip. And you know, the thesis there is that, you know, whenever bitcoin dips, it's a good opportunity to buy. But yes, sometimes it will just keep dipping and dipping in. And, you know, it's often a hard decision to make. So yeah, that's saying that you hear and see often in this sector, mainly because it's so volatile and it does, you know, the market does drop in price frequently and also, you know, goes up even more 

Craig: [00:05:58] frequently when the dip keeps dipping. Yeah. Well, I actually know like a few fund managers and they have these bots that all they do is buy the dip. So there's a massive red candle, which is a massive downward spike. The bots just automatically buy. So like, it's not a bad strategy. 

Blake: [00:06:15] Yeah, for sure. I need to get one of those. Yeah, one of my faves from the early days there certainly hadn't heard before was FUD, which stands for fear, uncertainty and doubt. And you know, in the early days when there was misinformation in the market, it would actually move the market. So if there was some, some fake news about your particular coin, it might move like 20 percent cent. And as a result, people could make lots of money from this market manipulation, leverage, trade these coins and make a heap of cash. Now, as the crypto sector has become bigger, it's a lot more difficult to do this. But you know, some pieces of FUD that were, you know, we've seen over the years things like China banning bitcoin, you know, and it felt like every three to six months China was banning bitcoin and the price would drop 20 percent. And then, you know, then of course, they would come out with just some new regulation to to manage it differently. And then the price of return and. You know, it's I was certainly thinking at those points in time, you know, how many how many people are making money off this, that that know that these news articles are going to be coming out, you know, before the public hears it. So yeah, it's definitely something to watch out for in this sector, particularly with smaller cap coins, because you had these pieces of news that that, you know, spread fear, uncertainty and doubt can really affect the price. And, you know, you don't want to be on the wrong side of it. 

Craig: [00:07:48] Yeah, I'm in the back in the day 2017. You're right. Like every six months, China would ban bitcoin. Why do you reckon that was less like the tinfoil hat in me says that China created the funds? They can buy more and the miners could buy more. But like, what do you think? Or do you just think it was just a piece of media that they just continued to run? 

Blake: [00:08:07] I reckon there isn't one reason, you know, there was different reasons for different announcements at certain points in time. You know, they did put a pause on buying and selling crypto so that they could spend some time regulating it. When I was in China in 2016, trading bitcoins through a hobby, which is a Chinese based exchange, I was buying bitcoins in Europe and selling them on a hobby. And China banned bitcoin, and I say, Gosh, what's going to happen to my crypto is going to get stuck in a Chinese exchange. I'm not going to be able to get it out. I'm going to lose all my money. So, yeah, scary times. But I certainly think that there are all different reasons, you know, it would have been for policy, but it could have also been for other reasons as well. 

Craig: [00:08:50] Yeah, cool. Let's let's crack on. You might say this as well with a token a h all time high. You remember maybe one of the most iconic all time highs was Dogecoin, when Elon Musk was on Remember this Saturday Night Live? Elon Musk was on Saturday Night Live and Dogecoin hit like 70 cents US day. That's like the most iconic all time high that I can remember. What what some stick out in your mind like. 

Blake: [00:09:15] What's really interesting about here are all time highs that you know bitcoin is often, you know, close to all time high and it's a bit nerve racking, buying it all the time high prices, you know, knowing that it hasn't been at a higher price. But yeah, if bitcoin continues to do what it has done over the last 10 years and continues to grow higher than, you know, lots of people will be buying at those prices. 

Craig: [00:09:40] And just a sort of stellar day black. If you bought bitcoin at the all time high, you'd be down think it was around 30 percent. But if you start a dollar cost averaging per week since its all time high, you'd actually be up by like a percent or something. So that's why that we talk about dollar cost averaging, because you do reduce the risk of, you know, the price you're getting in at. 

Blake: [00:10:05] Yeah, for sure. It mitigates the entry price. 

Craig: [00:10:08] You know, or both around in 2017, when a lot of projects either went to zero or stopped existing in one of these people that you call when they get into a project and it doesn't move is called a bag holder. So that's a person who holds a particular crypto. While it literally just keeps going down only on the back holder and a fair few coins. I must say I won't say his name, but your friend, our friend, who had like 20 percent supply of this coin and then it just became worthless. 

Blake: [00:10:37] Yeah, he became part of the community. 

Craig: [00:10:41] Okay. Well, this is probably around the financial markets, but bullish or bearish. Can you give us some insight as to why it's called bear and bull? And you know what these mean? 

Blake: [00:10:51] Yeah. The reason that we refer to bullish and bearish, you know, sentiment or movement in the markets is because you're a bull attacks with its head up, which means that the market's moving in, you know, positive price direction and a bear attacks with its head down, which you know, suggests that it's moving in a negative price direction. What about a bull trap in a bear trap, Craig? 

Craig: [00:11:15] So a bull trap in a bear trap, so a bull trappers Ren. The price is continuously going down, and then it reverses upwards just for a moment. And then people are like, Oh, you know, the bulls are back. The price is going to become bullish again, and then it just goes down again. So it's just it's a way to just trap bulls. And, you know, I've been caught in a few bull traps in my time. One of them is the 2017 top of bitcoin. You'll see that after the all time high, it decreased sharply and then it bounced and that bounced. There was a biggest bull trap. And then the bear trap is when, you know, sometimes I can bitcoin is it all time high and again it goes down sharply. The bears are like, Oh, this is it, let's show it. But in reality, it's, you know, not the right time to show up because the price would just rebound. So, I mean, all these terms, they should put you off trading because like, no one knows what's going to happen. And there's all these pieces of jargon and everyone's just really guessing what's going on.

Blake: [00:12:18] Yeah, that's. Right, and that probably leads us into what we often see and here is, you know, markets dumping or coins dumping. What's that, Craig? 

Craig: [00:12:27] Well, when you know a big wallet holder dumps coins, you can tell the price movement is just subtle decrease. I remember when I was with you, like, actually, I was in Perth and I was holding this low cap Binance Smart Chain like for lack of a better word ship coin. You remember this and I sold, and you could literally see the sell on the chart. I was just had no volume. And that's an example of me dumping and creating a sharp price movement downwards. Yeah, for sure. One thing that I still don't understand, I've been in this space for five years. What's forking? And I swear forking was a thing back in 2017, like bitcoin forked moment didn't afford to Bitcoin Cash. Yeah. What is forking? Yeah, it's

Blake: [00:13:18] pretty unique to software, and it kind of refers to the code base of saying being split into two. Now what's interesting about cryptocurrency many of the big cryptocurrencies is that the code base is open source, which means anyone can see it, copy it and use it for their own purposes. And a fork is essentially when you know there's a fight between people using one blockchain, and then they split the code base and they they create two blockchains from one. Now this is pretty, pretty abstract and pretty unique to crypto. However, you know, it is saying that that happens, and as a result, there was, you know, a big fork. Back in 2018, there was a fork of bitcoin. There was ideological differences between the different, you know, community members within bitcoin. And they ended up splitting bitcoin, one called bitcoin and one called Bitcoin Cash. And those communities are still strong and they're developing in their own directions now. But it turns out that bitcoin has remained king regardless of, you know, their community being split. So, yeah, pretty interesting here. Folks can also happen as a result of attacks as well. People that can put resources into forking a crypto, particularly a proof of work blockchain like bitcoin for their own gain. So it's an interesting aspect to the sector. 

Craig: [00:14:44] So you just snuck in another bit of jargon there, proof of work now. I've been in this space for years and I have no idea what proof of work is, and I have no idea what proof of stake is. I hear people go, Oh, Ethereum's going to proof of work. That's so bullish. But like, I have no clue what that means, but can you give us an overview? What is proof of work and what is proof of stake? 

Blake: [00:15:06] Yeah, for sure, sir. Proof of work is a way of different blockchains arriving to consensus or to a point of truth. And they do this by using computing power to validate transactions on the network. Now, proof of work uses massive data centres out in the desert in Texas and in you're running from hydro plants in British Columbia. All these computers working to validate transactions on the network 

Craig: [00:15:37] and to be clear, are they miners? 

Blake: [00:15:39] Yeah, these are miners. So we call we call these computers that do this work, miners, because essentially they're mining bitcoin, which is an analogy of mining and in the real world. So proof of work blockchains use a lot of energy, and that's a big criticism about how they function. But they need to input and output a lot of energy to be able to for the blockchain to operate with this consensus mechanism. Now, proof of stake blockchain is very different where it uses validators that don't necessarily need to use large amounts of electricity to to validate transactions on the network and bitcoin's a proof of work. Blockchain and Ethereum is a proof of stake blockchain. And it's called proof of stake because you need to stake your theory and will lock you Ethereum up, kind of like in a term deposit to be able to become a validator on the network. And you need to do this basically to show that you have an economic incentive to ensure that the transactions that you're validating, that there's alignment between, you know, yourself who's made this investment to stake and the network itself. 

Craig: [00:16:52] ACORN, you mentioned they're about miners where 

Blake: [00:16:55] miners are basically computers that look like they look like shoeboxes and they're specifically designed to mine cryptocurrencies. And you know, there's even like speciality ones for different coins. So you'd buy one type of miner for bitcoin, a different type of miner for saying collect dogecoin. And you know, these often. Can be used at home for hobbyists that primarily it's they're being used by, you know, corporates who are building massive data centres filled with these miners to mine bitcoin or other cryptocurrencies. And we did an episode on Bitcoin Mining with Daniel Roberts from Iris Energy, which is the world's largest sustainable bitcoin miners. So definitely jump back and have a listen to that to hear. Hear more about crypto mining. 

Craig: [00:17:47] Do you reckon like remember the 90s you had like a, you know, a two megabyte floppy disk and you can get like a terabyte and a USB drive joke or get to the stage where these miners aren't going to be massive shoe boxes that contain heaps of energy into something a lot more compact and better.

Blake: [00:18:04] Not really, because the way that the bitcoin hashing rate works is that if there's more people on the network mining bitcoins, then it actually makes it harder to mine bitcoin, so you need more power. Gotcha. And this is to make it more competitive. So, yeah, I'm not sure if I think it's always going to take, you know, lots of computing power to be able to mine bitcoin. Interesting.

Craig: [00:18:28] Well, we've got some more things to get through. So we've just gone into bitcoin, proof of stake, proof of work, miners, a bunch of complicated stuff that you know, can be a bit hard to understand, but you will. You'll also hear the term Bitcoin wallet mentioned a bit soft wallet, cold wallet, warm wallet. But can you give an overview of what is a cold wallet? You know what is a warm, well, what does a hot wallet? 

Blake: [00:21:33] Yeah, there's different types of cryptocurrency wallets where you can store your crypto and the different levels on the spectrum of, you know, cold to hot represent your security level. And with security, there's always trade offs. So, you know, those that you know want their cryptocurrency to be more secure often have to have additional processes in place to make it secure. And you know, those that, you know, don't necessarily care too much about how secure their crypto is. For example, if you just have know $100 in a wallet, you don't need to have arduous processes. Now, these kind of wallets that you would use day to day are called hot wallets, and it means you can put little bits in and out very quickly without too much hassle. Now, warm wallet generally refers to a wallet that sits on your desktop or on your laptop. And this has a reasonable level of security, but it's not the safest and the safest type of cryptocurrency. Wallet is a cold wallet. And that's saying that you keep completely offline and they call it a cold wallet is because it's disconnected from the internet, which makes it very difficult for hackers to to hack up because, you know, they can't actually access it because it's offline. So, yeah, they're the three kind of categories of wallets. There are more, but they're primarily the ones that you'll see day to day to store and manage your crypto.

Craig: [00:23:02] And you might hear as well the private key and the public key. You want to give us no view of what they are. 

Blake: [00:23:08] Yeah, for sure. So private keys saying that you should never give anybody and a private key basically gives you access to the blockchain to move your cryptocurrency around. And it's kind of like your password for your bank account. Now your public key is saying, like your bank account number, your BSB and account number, and this is what you can give to people for them to send you crypto and your public private key encryption is, you know, used all over the internet. But with crypto, we actively manage it with a little bit more detail. You see these things come up and just make sure you never share your private keys with anyone and make sure you never take a photo of your private key or keep it anywhere online. 

Craig: [00:23:55] Yeah. You know, your public key is mostly just a random combination of letters and numbers. But have you seen any sort of theorem? Blake Yeah, I have.

Blake: [00:24:05] I actually bought a couple of AMC as they called instantaneous domains. 

Craig: [00:24:10] So pretty much what E.A. Domain is, is, is if you have an Etherium wallet, you can actually buy a domain that will represent your wallet. So, for example, you know, you can't interfere. And while it would be like, oh, x w z two four six abont like 20 random characters, but with anus domains black you can have like black dot f. 

Blake: [00:24:33] Right? I tried to get Blake Dollars, but taken, of course, wasn't. It was taken. Yeah, but yeah. So what's interesting about this is that, you know, you can attach an identity and like, you're a shorthand, your routeing number to your wallet address, which makes it easier for businesses or people to do things instead of using kind of long, complicated phrases and keys. Hmm. 

Craig: [00:24:58] So we've probably heard a bit more fun terminology bitcoin whales. Now what would you call a whale? Maybe I'll maybe I'll take this one. Yeah, go for a whale refers to a person or entity that holds an absurd amount of a crypto currency. So we mentioned about our mate that owned 20 percent of something. If he's sold, he would make a giant splash because the market would be completely overexposed to his trade. Like, for example, Satoshi is Satoshi the biggest bitcoin wallet? He is, isn't he? If he somehow miraculously came back and unlocked his wallet and dumped it on Coinbase, we would see a significant splash. But in saying that, you've also got these whales who when they buy the cryptocurrency like Michael Saylor, I think lost a few days ago, he bought. I don't know how many bitcoins that he bought. The other day is 

Blake: [00:25:52] one hundred and ninety million dollars worth of bitcoin. 

Craig: [00:25:56] Bitcoin? Yeah. And you can actually see, like after he announced it, you can actually see the green candles go up from him, his buy orders. So yeah, these whales, you know, people say they can. All the market, but yeah, they definitely make a splash when they make a trade.

Blake: [00:26:13] What about FOMO, Craig?

Craig: [00:26:15] FOMO stands for fear of missing out. And the way I would describe FOMO is like if your mate tells you about something and you don't even care about the price, just like, Oh, I need to get in because you know, he's making money and I'm not. It's a rookie mistake because when a coin is skyrocketing, you know, people FOMO when people don't want to miss out on the pump. And people have a fear of missing out. And you know, that's what I was saying. You know, in bitcoin, is it all time high? In November last year, people were fumbling in where if they just Dollars solid dollar cost averaging at that point, they'd be in a much better position. So FOMO is the emotion. 

Blake: [00:26:53] Mm yeah, for sure. And you know, I think we're really just scratching the surface here. You know, if you get into, you know, Discord's and you're reading different publications, there's all sorts of your terminology that know we haven't covered off today, but you'll see you, for example, in discord in some of the chats for for DeFi projects. I can barely figure out what's going on half the time just because they've developed their own culture. So, yeah, it's a continued journey. You know, learning how to navigate the sector. And yeah, we hope that, you know, we've helped you on your way if you've been hearing some of these things and you haven't been sure what they mean. 

Craig: [00:27:31] On that note, we hope you've learnt a thing or two. You know, when you're scouring through Discord and Telegram chats, we hope that this podcast has helped you decide for at least a little bit of what's going on in there. But as you know, you know, this space moves so quick has its own culture, especially on Twitter. Like, I feel bad for the people that are just starting out because, you know, it's it's own language at times, but let's finish up. So we still want to know what you want to know about crypto, so please send us an email at podcast. They get Bambu to Io and follow us on social media. All these details are in your show notes below, and don't forget to write and review us and your podcast. Five Stars Only, Though play. Thanks, Craig. I'll catch you later. Next time Tracey will be on, so you won't have to hear hear me attempt at hosting again. So let's let's leave it there.