[Feature] Cryptocurrencies for Noobs Explained by a Noob Part II

If you are a crypto noob like me, you will often ask yourself: “When will I be able to upgrade my status to Crypto Pro?” Not anytime soon but maybe Crypto Noob 2.0 at least (gradually like how iPhone is always upgrading then branching into XR, Pro, mini, XS, and so forth)? It is so much more than knowing what various crypto terms/slang/lingo means; it means setting up your first crypto wallet, purchasing your first crypto (buh bye money), minting your first NFT, getting involved in topics centering around crypto, and more. To know the game, you got to play the game!

I still see stars at times when terms I do not know pop up during conversations, videos, or news; it is a long road. I belong to the Web 2.0 generation so Web 3.0 is not as easy as it looks. Now I fully comprehend (and deeply empathised with) what and how my parents feel — like a dinosaur. Prior to this, I penned an article defining some basic crypto terms (https://www.coinlive.com/news/detail/?id=7470) so I will focus on others in this. Everything is based on my subjective understanding as well as research done on the cryptocurrency realm.

Whether you’re juggling kids, work, and family life, or pursuing lifelong education, you’d know of the web. Even my grandfather, God bless his soul, had some kind of understanding of it and called it a place where you can type in something to find anything. The digital age was not all that much in the past compared to what we have now, which we sometimes do take for granted. Imagine a world without the internet, without the web; the HORROR! Before I dive into what Web2.0 and Web 3.0 is, what number comes before two? One, of course. Web 1.0, the first generation of the World Wide Web, was originally coined by Tim Berners-Lee in 1989 and is considered a read-only web. Web 2.0 or also called the “Social Web”, is simply the web as we know it today, which is completely interaction-based and conquered by internet giants like Google, Facebook, you name it. Unlike Web 2.0’s centralisation, surveillance, dupable advertising, and lack of transparency, Web 3.0 or simply just Web3, centres around ‘decentralisation’. In Web3, we get rid of intermediaries and become hands-on on everything ourselves. Bear in mind if you accidentally execute something wrongly, there are no customer service officers to let you complain to. Everyone is responsible for their own actions in Web3 as there is no reverse option in blockchain. So that’s the pros and cons of being decentralised. Now you finally have a chance to prevent Apple, Google, and even Facebook from collecting your precious data, but are you willing to make a change?

The differences between Web 1.0, Web 2.0, and Web 3.0

Now that we have established the basic underlying features of Web 2.0 and Web 3.0, let us continue to another two related terms that we see more often in the investing world, “bull” and “bear”, which are frequently used to refer to market conditions. When I first heard these terms, I thought I heard wrong. When I saw them being used in articles, I thought they were typos. How are these two very specific animals related to stocks, crypto, or even the market conditions? Did an actual bear or bull attack the market hence those terms? I had an “enlightenment-unlocked-under-a-waterfall” moment after doing some digging. “Bear” because it is thought to get its name from the way a bear attacks — by swiping its paw downward. While the bull attacks by shoving its horns up into the air, hence “bull market”. Then how would you define these two terms? A bear market is typically defined as a 20% drop from recent highs while a bull market is basically the opposite — defined as a 20% rise from the lows reached in a bear market.

Glassnode, a blockchain data and intelligence platform, talks about the 2022 bear market on their Twitter

When you see bear markets like the above, maybe you will feel some fear, uneasiness, doubt, and the likes. Congrats then, because that is the next term I am jumping into: fear, uncertainty, and doubt (FUD). FUD is not to be confused with its cousin, FOMO (fear of missing out), although in most cases, both are not your go-to buddies. In the world of crypto, FUD often refers to general scepticism. FUD starts brewing within you if you are easily influenced by what you see or hear about the technology; it is a strategy to influence the perception of certain crypto or the crypto market in general by spreading negative, misleading or inaccurate information. Where does FUD spread most commonly? On social media or mass media.

Let me give you two examples; one using cryptocurrency, and the other a daily example. A famous person states something on their Twitter account about Bitcoin being a bubble, then somehow a friend retweeted it and tagged you in it so you saw. FUD starts brewing within you if you are easily influenced by what you see or hear. However, this usually is not substantiated or based on fundamentals, just someone’s opinion or point-of-view. Another example, which is very common is our parents and their tendency to share “news” that someone shared on their group chat, with their children. I vividly remember receiving a huge chunk of forwarded text in the family group chat from my mum about someone saying that vaccines are bad for our bodies and such. It was baseless as it was someone’s point-of-view but it made her worry (A LOT). And believe me, that was just the cherry on top of the cake.

Lina Seiche, the Managing Director and part of the editorial board at BTC Times, depicted the cycle of FUD on her Twitter

Next, we come to FOMO. It’s the fear of missing out on something that others are enjoying and is generally most intense when markets are rising fast — you feel anxious if delaying your decision-making will result in you missing out on a potential opportunity. It usually stems from a negative viewpoint: to avoid missing out on something, you act on impulse which is no longer rational but emotional. Maybe you see all your friends making a killing off Bitcoin and you do not want to be left out, so you blindly jumped onto the bandwagon as well. Each time I read on the news that someone strikes the lottery and is going to retire in luxury, I do feel FOMO but rationality kicks in because I am going to be playing with probability: I DO NOT run down to the nearest Pools Betting Centre to buy a lottery ticket! More often than not, you will end up regretting everything after making your decisions.

FOMO as explained on Xuanling11.eth’s Twitter

To conclude this brief guide for crypto noobs, again what I have listed is just barely scraping the surface. So let us slowly but surely uncover more crypto jargon and terms in the cryptocurrency world. Take a moment to digest these terms then meditate with me before we forge ahead once more!

Written by: [Coinlive] Catherine