What Are the Top 3 Terms That People Get Wrong in Crypto?

#1. FUD (Fear, Uncertainty, Doubt)

FUD is a term thrown around pretty loosely in the crypto community and among cryptocurrency speculators. However, more often than not, it is misused as a root of causation for a particular event occurring in the world of cryptocurrency.

Terms that get thrown around too loosely tend to lose their meaning and in the case of FUD, it sometimes translates into projection of personal ignorance onto others.

While it can be said uncertainty has many different meanings, in many cases FUD translates to “gap in knowledge” rather than uncertainty. For example, someone might lay the blame of a dip in the price of Bitcoin on FUD in markets, but if one were to look more closely at the data and transactions, you might find that two weeks ago a whale dumped a lot of their currency.

This is an important distinction to make since gaps in knowledge can be filled and this filling of knowledge gaps proves to be an important experience for people in the crypto space, as those experiences prove to be valuable lessons which improve their skills as investors.

Uncertainty, however, is a different animal. Uncertainty comes from issues outside of the control of an investor and implies a lack of trust about a particular issue. A lack of trust is not the same as a lack of knowledge. Generally speaking, it is easier to fill a knowledge gap than it is to fill a trust gap.

#2. Satoshi (The Unit, Not the Person)

Satoshi Nakamoto is the founder of Bitcoin and seen as an influential figure in the cryptocurrency community. In this particular case, however, we’re talking about the smallest unit of a bitcoin.

Named after the first name of the founder of Bitcoin, a satoshi is 100 millionth of 1 BTC. Also referred to as ‘sats’ when talking about several satoshis.

It is a common enough mistake to assume that a ‘sat’ is similar to a cent, i.e. 0.01 BTC at the time of writing. In truth one sat is 0.00000001 BTC. There are those who doubt the importance or potential value of Sats in Bitcoin. If some of the Bitcoin maximalists are correct in their speculation about the value of Bitcoin reaching ridiculous heights, this might make the value of Satoshis worth considering more than they currently are. For example, you may want to reach a benchmark accumulation of 0.50 BTC. This would be 50,000,000 sats, not 50 Satoshis (or Sats).

One myth that people misunderstand about Bitcoin more than other tokens, is the idea that you have to buy Bitcoin in traditional units of money to two decimal places (10 or 25 cents for example).

Some investors, especially new ones, might find success in stacking Sats which is very affordable and adds up over time. Stack Sats and HODLing is an entirely doable investment strategy and even if you are not a Bitcoin maximalist, it may open a way to further diversify an investment portfolio. Don’t sleep on Sats.

#3. Web3

The NFT craze which started in 2021 was the real kickoff for discussions about the possibility of web3 and what that would look like. NFTs are non-fungible tokens which are frequently associated with putting images on a blockchain, which is not necessarily the case.

An NFT is a signature of receipt which proves ownership of a particular digital asset which is not exchangeable (or fungible) with another digital asset.

Web3, as a term, was first used in 2014, just like NFTs, but did not hit the mainstream until 2021. The two seem tied together in a way. In its original definition, Gavin Wood, the founder of Polkadot, referred to web3 as a “decentralized online ecosystem based on blockchain”.

This is the definition to keep in mind when reading about web3 promises.

These days however, web3 is thrown around so loosely that one might mistake it for something that it is not.

Web3 is not centralization of web platforms. Such a position is deterministic and assumes that there will not be holdovers of web2 which persist alongside web3, just as there are holdovers from web1 which persist on web2.

An important distinction is that Web3 might be based on blockchain, but not all blockchains are a part of web3.

One can observe that we are still very much operating in a web2 environment and this is still where most of the blockchain technology happens and functions. The position that web3 is a full replacement for web2 is sometimes used as a marketing tactic and the term web3 itself has been levied by developers and marketing teams to drum up hype about future projects.

While there’s nothing inherently wrong about wanting to associate a product with future developments, the buzzword-ification of web3 is something to watch out for. Especially since buzzwords create hype, and hype creates FOMO which, most often than not, leads a hasty investor to find value in an overpriced market.