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Published: Dec 28, 2021 7 min read

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A teacher is writing  Cryptocurrency  on the board.
Kiersten Essenpreis for Money

This article is part of Money's January 2022 digital cover, which features 22 ways to make 2022 the best money year of your life. Browse all 22 articles here.

In 2021, people couldn’t stop talking about cryptocurrency. 2022 won’t be any different.

Interest in crypto has boomed, with trading apps like Robinhood and Webull and payment platforms like Venmo and Cash App allowing basically anyone with a smartphone to buy and sell Bitcoin, Ethereum and more. The internet is full of chatter about the volatile prices — especially the record highs — and more and more companies are starting to accept crypto as payment.

Money has a full guide on what cryptocurrency is and how it works. But the crypto world moves fast.

Here are 5 crypto buzzwords you’ll likely hear in 2022, and what they mean.

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Altcoin

Bitcoin, the first cryptocurrency, was created in 2009. Since then, it has amassed a $925 billion market value, paving the way for alternative cryptocurrencies, or altcoins, to pop up. Today, some experts say that altcoins like Ethereum, Cardano and Solana actually have more functionality than Bitcoin (like running DeFi applications — we’ll get to that later) which could make them more valuable in the future.

Stablecoins, another kind of altcoin, have value that’s tied to an outside asset like gold or the U.S. dollar. Then there are meme coins, which serve little purpose, but skyrocket in popularity because people think they’re funny or cute.

“People love to gamble, so as long the market is hot, I think there will always be a place for that,” Daniel Polotsky, founder and chief advisor of Bitcoin ATM company CoinFlip, says of meme coins.

There are more than 15,000 cryptos in circulation, according to CoinMarketCap, and more are being developed every day.

Web 3.0

Explaining what Web 3.0 is is hard, because the definition is being worked and reworked in real-time. But since people can’t stop talking about it, here goes nothing.

The general idea is that Web 3.0 is a version of the internet where people have ownership over their digital property, and control over their data, without having to go through middlemen like Facebook and Google.

First there was Web 1.0, which was the original version of the internet with static sites (remember GeoCities?). Then Web 2.0 emerged, with the entrance of Amazon, Twitter and all those other sites that came on board to make the internet more user-friendly. Web 3.0 is about taking back some of the power from those tech behemoths.

2022 will be an important year for Web 3.0, as new products emerge that support crypto-enabled web interactions, says Nick Casares, head of product at Polyient, an investment group that focuses on virtual economies. Products like Compound and Aave, which enable crypto access to financial products via DeFi or property ownership via NFTs, are poised to become the leaders of the march towards the so-called new internet, Casares says. (Don’t worry, we’ll get into some of those buzzwords below.)

Crypto wallet

Crypto wallets allow you to store the secure digital codes required to interact with the blockchain — a ledger that records all of a cryptocurrency’s account balances and transactions across the world. In other words, you need one if you want to buy and sell crypto.

Some crypto wallets are called “hot wallets,” which are connected to the internet and can easily be accessed with your phone or computer. “Cold wallets,” on the other hand, are offline, and live on a piece of hardware (similar to a thumb drive) or even a piece of paper. The crypto wallet that will work best for you depends on a few factors, including whether you’re a beginner and whether you want to trade Bitcoin or other cryptocurrencies.

Still with us? Money has a guide to the best crypto wallets, with tons of additional info on exactly how these things work.

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DeFi

Decentralized finance, or DeFi for short, refers to a variety of financial products that can be accessed directly via a blockchain network so that users don’t need to go through brokerage firms or other middlemen.

DeFi advocates argue that creating a direct line between a consumer and those products — instead of making them go to a big bank when they need a loan, for example — can cut costs and make the transactions faster and more secure.

There are certainly risks. DeFi mimics highly-regulated services in the traditional financial ecosystem, but does so without the same regulation, says Ben Cruikshank, head of Flourish, a fintech platform that recently launched its own cryptocurrency offering. And fraud runs rampant: In November, the blockchain analytics firm Elliptic found that losses on DeFi platforms due to theft and crime hit $10.5 billion in 2021.

NFT

You’ve probably heard of non-fungible tokens (NFTs) by now. In 2021, the NFT frenzy had buyers forking over thousands of dollars for digital art of Lebron James dunking a basketball and an animated cat with a Pop-Tart for a body.

So what exactly is an NFT? It’s a cryptocurrency innovation that allows someone to own digital property. In addition to art, “NFT” can be used to describe a wide range of assets like music, games, ownership titles (for real-world items like property deeds) and credentials like diplomas and certifications, Casares says.

The craze will most certainly bleed into the new year, especially now that celebrities like Martha Stewart, and companies like Coca-Cola, are getting in on the fun. Like with most things crypto, it’s impossible to tell if the NFT mania is fad or a lasting trend, but the appeal is certainly heating up.

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