13 Essential Terms You Must Know to Get Yourself Familiar with Web3
Web3 is making huge waves in the world right now with its ever-growing popularity. It influences many facets of our lives, particularly how we conduct business, and how businesses interact with their customers. To adapt to a future world powered by this trending technology, you can start by getting yourself familiarized with basic concepts, and learning their terminologies and glossary. Through understanding them, you will form a better picture of the whole idea behind web3.
Here are the 13 essential terms you need to know before venturing into the world of web3:
Airdrop means a distribution of cryptocurrencies, tokens and NFTs to wallet addresses for free by any web3 or crypto projects as a form of reward or incentive to their users who for example use, invest, or join their projects. It is regularly utilized as a marketing strategy to generate more interest and encourage more support towards a launch of a project.
Blockchain is a type of digital distributed ledger that is open for public access. It stores all the transactions and records which are shared on a network of computers, without being managed by a centralized authority. Each block contains a list of verified transactions. When all the blocks, which consist of previous transactions link together, it forms something identical to a chain.
Cryptocurrency is a form of digital asset that is meant to be used as virtual currency or a medium of exchange, and can only exist on blockchains. All the cryptocurrency payments are secured by cryptography, which enables them to take place without the need for a bank. The transactions can happen at any time between anyone.
DAO stands for “decentralized autonomous organization”, which is controlled by all of its members and has no centralized leadership to spearhead, or any conventional hierarchical structure of a company. The transactions or financial records of the organization, along with its rules as program codes, are kept on the blockchain and are open to all members for access and viewing. This creates a safe, transparent, and collaborative space for the members to contribute and build with, and exercise their rights together. There are various categories of DAOs including social, investment, or entertainment types.
FOMO is short for “Fear Of Missing Out”. It originated as a common term to describe a psychological state or a phenomenon that emerged during the age of social media. In the world of cryptocurrency and investment, it describes a situation where an investor decides to buy a digital asset when its price has gone up significantly, as they fear they may not be able to capitalize on the increase before a pullback happens, missing the opportune time to invest.
FUD is an acronym for the term “Fear, Uncertainty, and Doubt”. Considered to have the opposite meaning of FOMO, FUD refers to the exaggeratedly negative and pessimistic mindset about a certain digital asset or the market in general, which usually turns out to be unjustified. FUD can be used as a tactic or method to spread fear and uncertainty about a digital asset, preventing the investors from further buying, keeping the asset at a lower price.
HODL is a misspelling of the word “Hold”, and now it is frequently meant as an abbreviation of “Hold On for Dear Life”. The slang term originated as a typo of the word “Hold” on the Bitcointalk forum, which was explained to have a meaning of holding one’s bitcoin when the price has dropped.
Rug is short for “Rug Pull”. Rug pull refers to a fraudulent act or scam in which a developer or founder promotes their crypto project to drive up its price rapidly on purpose, but has the project abandoned or canceled abruptly as soon as they collect enough money from the investors for their own gain. This type of scam happens usually in the decentralized finance (DeFi) world.
A metaverse is a digital space that theoretically exists on a blockchain network. Connecting multiple shared virtual worlds and elements such as online game consoles, computers, mobile devices, social media and augmented realities together. People can join in and live as their own avatars in this virtual environment. The goal of a metaverse is to make social interactions and bonding between people from all over the world possible without physical constraints, and to link the real world with the virtual world.
Mining denotes the process of verifying cryptocurrency transactions on a blockchain network, storing the record on a block which will be then added to the whole blockchain. The validation process can avoid double-spending of a coin or the virtual money, usually due to it being run by verified and trusted miners from the network, and using a Proof of Work consensus. Normally, they will be rewarded coins for adding a block or mining successfully.
NFT is an acronym for “non-fungible token”. Each of the NFTs is a token that represents the ownership of a unique digital asset recorded on the blockchain, and is not interchangeable with any other token and cannot be replicated. Unlike cryptocurrencies which are fungible, NFTs can represent various items such as digital artwork, a limited edition product, a game item, a domain name, a collectible, a voucher, or even a property. Most NFTs can be found on the Ethereum blockchain.
To The Moon
“To The Moon” is a phrase regularly used by cryptocurrency investors when they see the price or valuation of a cryptocurrency or an asset go up remarkably, indicating a big return. The phrase is a figure of speech to say that the price spikes so much that it almost reaches the height of the moon.
A holder who has a large amount of a particular cryptocurrency is called a whale. The amount of cryptocurrency they hold allows them to potentially manipulate or influence the market price.
If you have any questions about launching or promoting your web3 products or NFT, feel free to contact us for professional advice!