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What Is a Cold Wallet? A Guide to Popular Crypto Terms


The cryptocurrency community has a lexicon of buzzwords and slang that may seem foreign to newcomers. When digital assets collapsed in 2022 and euphoria gave way to despondency, so did the terminology. Here’s a guide to new and old terms you should know.

This reference to the long-term decline of the crypto market was used during the 2018 recession that reduced the market value of all crypto assets by up to 88%. Digital tokens will collapse again in 2022, with Bitcoin falling 76% from its peak in November 2021 to mid-November 2022.

●Cold storage/hot wallet

Cautious cryptocurrency users keep their coins in so-called cold storage, usually hard drives that are not connected to the internet, making them harder for hackers to steal. A hot wallet is where funds are stored online or on an exchange and are ready to be traded. When cryptocurrency exchange FTX filed for bankruptcy in November, the company moved some customers’ digital assets into cold storage to protect their accounts.

Decentralized financial platforms allow people to lend and borrow, bet on changes in value, and trade crypto assets. Unlike crypto exchanges run by companies with offices and paid employees, DeFi typically works through user-designed automated contracts. The collapse of the TerraUSD stablecoin and its associated DeFi platform, Anchor, in May raised widespread skepticism that some crypto products are fraudulent schemes to lure investors with unsustainable returns. has arisen.

Risk-taking cryptocurrency investors put coins into yield farming platforms for profit. A typical strategy involves lending a token, borrowing another token, and acquiring yet another token. At one point, the investor said he was earning triple-digit returns from such complex combinations. Lending and borrowing different tokens means that if one yield farming contract has a problem and depositors start withdrawing funds, they may need several other tokens. To do.

These are software platforms that connect cryptographic services that cannot otherwise communicate with each other. This allows users to move tokens from one blockchain to another. These links make it easy for crypto users to invest in various projects. It also strengthens the interconnectedness of the ecosystem, making it more vulnerable when vulnerable entities encounter problems.

These crypto investors believe the original digital coin is the only thing the world needs. They stick to that vision and dismiss concerns about its volatility and enormous energy consumption .

Some crypto tokens aim to peg their value to another asset to make them more stable than highly volatile currencies like Bitcoin. It maintains stability by buying safe assets like However, the largest stablecoin project, Tether, will be criticized by the U.S. Commodity Futures Trading Commission in 2021 for misleading customers when it claims the token’s value is “fully backed” by fiat assets. I was fined. Interest in another category, algorithmic stablecoins, plummeted when the system used by TerraUSD tokens to manage supply and demand failed.

Non-fungible tokens confirm unique ownership of digital assets. NFTs are most widely used for digital art and collections such as video clips, memes, and items used in online games. During the heyday of crypto enthusiasts in early 2022, his NFT series such as Bored Ape Yacht Club and CryptoPunks earned millions of dollars with celebrity endorsements such as Paris Hilton and Snoop Dogg. I was out. By June, the price of many of his NFT collections had plummeted.

A vision of a more decentralized World Wide Web built on cryptographic technology that gives power back to Internet users from tech giants. Proponents say the current model, known as Web 2.0, gives too much control to the few platforms that track online activity and monetize that information through advertising. Web 1.0 refers to the early days of the Internet, when it was just a way to remotely access static pages of text and images.

Trading slang for “crypto winter”

HODL: This meme goes back to a typo urging traders to keep their nerves “knocked down” through vigorous spinning motions. Today, too, it is “to save one’s life”.

WAGMI: “We’ll do it together” Used by Cryptofans to show support for each other or to inspire confidence in the project. You can guess what NGMI stands for.

Rekt: Abbreviation for “wreck”, the term describes a large loss or liquidation caused by improper investments or improper trading.

Applying for McDonald’s: During a period of cryptocurrency decline, traders lament their fortunes being wrecked while joking about working at hamburger chains instead.

――With the help of Shen Muyao.

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