Digital Assets Jargon and Terminology

Mike Halper, CFP®, MPAS®, SE-AWMA®, CDAA, CBDA

04/15/2022 08:30 AM Comment(s)

Like many new things in technology and the social world, a new language seems to get created, presenting new slang and jargon for new users to learn to figure out what everyone else is saying. Here are some of the most common terms, phrases, and jargon used in the digital assets and cryptocurrency space.

Altcoin

Cryptocurrencies that aren’t Bitcoin, and in some contexts, Ether. The phrase is used matter-of-factly to describe various other cryptocurrencies.

Bagholder

Someone who is in a very unfortunate position of holding crypto who's price has collapsed so they're stuck with it. They aren’t able to sell it, at least not without making a loss.

Bitcoin Maximalist

A person who believes that Bitcoin is the only cryptocurrency of value.

BTD

Buy the dip, meaning to buy crypto when it is at its lowest, so you will make a profit if the market rallies.

CeFi

Centralized Finance. Think of it as the traditional banking system where all transactions are controlled by a centralized banking system.

CEX

Centralized Exchange. These are the exchanges where you can on-ramp and off-ramp fiat currently, purchase and sell cryptocurrency, and transfer cryptocurrency on and off the exchange. The exchange has custody of your crypto and you do not possess the keys to the crypto you keep on the exchange.

dApp

dApp is short for decentralized app, meaning any practical application that runs on a blockchain. dApps can take the form of mobile games, communications platforms, social media sites, and financial services.

DeFi

Short for Decentralized Finance. This is the idea behind cryptocurrency as a whole; the concept that people can use financial services without needing a bank account.

Degen

Degen is shorthand for degenerate. Degen trading, or being in degen mode is when a trader does trading without due diligence and research, and the term is often used to refer to yield chasers in the DeFi community who support unaudited projects.

DEX

An abbreviation for decentralized exchange. In other words, it’s a crypto exchange that allows people to trade cryptocurrencies without the need for a third party. This is typically done with digital wallets and smart contracts.

DYDD and DYOR

Due You Due Diligence and Do You Own Research. There are a lot of different digital assets and crypto projects, and many of them could be scams or ideas that are either not great or aren't executed effectively. As with any investment, it's important to do enough research and due diligence on any potential digital asset or crypto purchase before actually making the purchase.

Exit Scam

When the creators of a new coin have an initial coin offering and then disappear with all the money.

FOMO

Fear of missing out is when someone invests in a crypto project with the hopes of maximizing their profits, even if it may not be a good investment.

Fork

A fork is when a cryptocurrency or blockchain-based network splits off into two distinct projects with their own code and set of governing principles. In the event of a “soft” fork, only one blockchain will remain operational, whereas “hard” forks result in two new brand chains. For example, Bitcoin Classic is a hard fork of Bitcoin, since both cryptocurrencies run on standalone blockchains, with their own sets of miners, nodes and network participants.

FUD

Short for fear, uncertainty and doubt, when a person is concerned that a particular crypto project may decline.

HODL

Now short for hold on for deal life, it may have actually originally been a typo for the work hold. It essentially means to hold on to an investment and not sell, even during extreme volatility.

ICO

Short for, Initial Coin Offering, this is when a new coin is being offered for sale.

Pump and Dump

A scam in which a trader or group of traders buy up a coin at a low price, causing the price to go up. Once it hits a certain level, they sell all of their coins, which may cause the price to collapse. If you get caught by a pump and dump, there’s a good chance you will be a bagholder and end up rekt.

Rekt

Crypto slang to describe someone who finds themselves in the unenviable position of being a bagholder. At that point they've been rekt because they lost a lot of money when the value of their coins have collapsed.

Rug Pull

Another term for an exit scam, where the founders of a crypto artificially inflate the price by one means or another, luring in crypto investors, then pull the rug by cashing in all their own holdings, causing the price to crash.

Sats

A sat is short for a satoshi, which is the smallest amount of bitcoin that can be sent. It gets its name from the mysterious founder of Bitcoin, Satoshi Nakamoto.

To The Moon

The moon is probably the most important place in crypto. If holders of a particular cryptocurrency feel confident, or want to generate confidence, in the coin, then they will quite often talk of it going “to the moon” when it, they hope, explodes in price and, theoretically, makes them wealthy. Of course, this often doesn’t happen. If a currency gets a sudden price spike, then that is sometimes called ‘mooning’.

TradFi

Short for Traditional Finance, and very similar to CeFi. This is the traditional banking system that you're used to where it takes days for transactions to settle, merchants pay roughly 3% fees to accept payments, you hold your cash at a bank and your investment assets at some kind of broker-dealer, and it takes at least 45 minutes to open a new bank account, among other characteristics.

Wei

The minimum amount of ether that can be sent is a wei, worth one-quintillionth of one ETH.

Whale

Someone who owns a lot of a particular cryptocurrency. They have the power to influence the price of a coin. If one individual buys up enough of a coin, then the price of that coin will probably go up. That individual would then be a whale. On the other hand, if a whale sells a lot of their coins, then that could send the price down.

Working with digital assets and cryptocurrency can be complex and confusing. If you need or would like more guidance, Escient Financial does offer and provide advice, education, and guidance on using digital assets and crypto. Feel free to...

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This content is developed from sources believed to be providing accurate information. The information in this material is not intended as investment, tax, or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Digital assets and cryptocurrencies are highly volatile and could present an increased risk to an investors portfolio. The future of digital assets and cryptocurrencies is uncertain and highly speculative and should be considered only by investors willing and able to take on the risk and potentially endure substantial loss. Nothing in this content is to be considered advice to purchase or invest in digital assets or cryptocurrencies.