spinofflive
crypto for beginners

MoneyMay 12, 2021

A is for altcoin: A beginner’s guide to crypto slang

Contributing writer
crypto for beginners

It’s hard enough to understand the ‘blockchain’ without all the jargon thrown in. But with interest in cryptocurrency exploding, it’s time to get educated so you can stop being such a noob.

All right degens, listen up. Wanna ape into some shitcoins but don’t know the lingo? We’re here to help. 

Bitcoins are mined through solving equations, but a lot of us can’t even solve the riddles these nerds speak in. The world of cryptocurrency sometimes seems hard to understand on purpose. It’s hard to believe anyone really knows what the blockchain is. Throw in a whole lot of new words, and most people are ready to throw in the digital towel.

Still, this new world of cryptocurrency isn’t going anywhere, and the sooner you learn what some of the lingo means the sooner you can start collecting questionable investment advice from your 14-year-old nephew. So use our handy glossary and you’ll know your defi from your degens in no time.

Altcoin

An alternative coin, ie. any coin that’s not bitcoin. The biggest one is Ethereum. 

Ape

What are you apeing? It’s ape szn, baby! “Ape” means buying into a new coin. For example, I’m apeing HBAR this season.

The bear-baboon-bat-bull spectrum

Anyone familiar with investing or stocks more broadly will have heard the terms “bear market” and “bull market”. Someone “bearish” believes the price of a coin is falling, and someone “bullish” thinks it’s on the up. However, the crypto market has a couple of points in between: “baboon” and “bat”.

Feeling “batty” is when you go full nocturnal trying to get in on price dips in the hope a bull season is on the horizon. At the end of a bat season, you either transition to the wealthy bull or go full “baboon” and start flinging shit. Baboons aren’t selling all their wares yet, but they’re close. Bats are about informed tactical plays, and baboons are making irrational, panic-driven decisions.

Bitcoin Pizza Day

In 2010 a man called Laszlo Henyecz paid 10,000 bitcoins for two Papa John’s pizzas. Every year we celebrate Pizza Day (May 22) to commemorate Henyecz’s loss of what is now worth over USD $500 million.

Laszlo Hanyecz and his $500 million pizzas.

Blockchain

Stop me if you’ve heard this before: it’s a “digital ledger” that records “peer-to-peer transactions”. Basically, blockchain technology is the technology cryptocurrency runs on. Every time you make a crypto transaction, e.g. sending 10,000 bitcoin to your local Papa John’s, that transaction is recorded as a “block” of data that is added to a “chain”. Anyone who claims to understand more than that is either a massive nerd or pretending.

Cash is trash

This turn of phrase is credited to American billionaire and avid bow-hunter Ray Dalio. It’s another way of saying, basically, “money printer go brrrr”.

Cypherpunk

Remember the cyberpunk genre? Johnny Mnemonic and RoboCop? This is much less cool. Instead of cybernetics, our real-world web punks are melded with “cryptography”, a word I learned from Dan Brown.

DeFi

Decentralised finance, or “DeFi”, is the ideology underpinning most cryptocurrencies; it’s a way to exchange money without that money going through a central bank. It’s straight from A to B.

Degen

A degenerate, more usually called a “degen”, is someone who pours a lot of time and money into new or unaudited coins, looking for quick gains. Degens don’t buy coins because they believe in the tech – they buy them because they see a get-rich-quick scheme.

Elon Musk

A total degen.

The Flippening

The flippening is the moment a coin becomes more valuable than bitcoin. This has yet to happen, but ethereum’s day will come.

Elon Musk and his beloved dogecoin. (Image: Reddit)

Gas

A fee sent to ethereum miners to incentivise them to process your transaction – the more you spend on gas, the faster sending ether will be.

Genesis block

The first block mined in a cryptocurrency’s blockchain. It’s the crypto equivalent of a birthday. Bitcoin’s genesis block was created on January 3 2009, making it a Capricorn.

Hodl

Someone misspelled “hold” once, years ago, and the internet never let it go. Classic bants. If you really believe in a coin, you hodl it for years.

Fucking legend

Anyone buying or selling cryptocurrency.

Paper hands

The opposite of a hodler. These hands are weak like wet paper, letting the coins slip through back into the market the minute fear or despair sits in. You are a soggy paper bear and you will never see gains.

Pump and dump

Usually done by degens. This is pumping up the price of a coin and then selling massive amounts of it for profit, causing the price to drop and bankrupt anyone stupid enough to buy into this scheme. Dogecoin is pumped and dumped pretty regularly.

Mining

Look, no-one’s wearing hard hats and shining torches into the data abyss. “Mining” is performed by computers. This is oversimplifying it, but basically: your computer is a pick hacking away at a maths equation. When it’s solved, you get the gem: a bitcoin block (or block of your crypto of choice). There’s some variation in how different crypto networks set up their mining, but a computer is always involved, and that means power is always being used. It’s not good for the environment.

Mooning

Shoot for the moon, and you will land among the stars. When a coin is on a sharp rise in price, we say it’s going to the moon, or “mooning”.

NFT

Non-fungible tokens were hot property back in March, but they seem to be dropping in value. It’s digital art (a song, a picture, a video loop of LeBron James dunking) that you can buy with cryptocurrency and have your wallet address attached to forever. Very special.

Satoshi

A Satoshi is the smallest unit of a bitcoin. It’s equivalent to 100 millionth of a bitcoin, or less than half a cent. Named for the person (or persons) who founded bitcoin; they went by the name Satoshi Nakamoto.

Shitcoin

Any coin you don’t like. They’re generally bad investments and hyped up by degens. There’s a lot of overlap with meme coins, coins created as little more than a joke – some of which are now unexpectedly mooning, like dogecoin and shiba inu. Other shitcoins include cumrocket and poocoin. You get the idea.

Stablecoin

These are coins that attempt to be stable in an extremely volatile world by attaching themselves to something else. For example, Tether is pegged to the US dollar and Digix is pegged to gold. These aren’t necessarily safe options.

Wallet

More Reading
The curious role of crypto in the war against Ukraine Are Putin's pals using crypto as a lifeboat?
Maybe don’t check your Kiwisaver right now Or if you do, prepare yourself a stiff drink first.

You need to put your money in a wallet, right? You can put your coins on a “cold wallet” (a fancy USB), then lose it in a rubbish dump. You could keep it in an online wallet, and forget your password. If you’d prefer to buy your coins with cold, hard gold in an undisclosed location, you can also buy a paper wallet filled with coins, which is a printed piece of paper detailing your online wallet address and password.

Whale

Someone who owns a large percentage of a coin. When they make moves, we all feel it.

Keep going!
Image: The Spinoff/Getty Images
Image: The Spinoff/Getty Images

MoneyMay 11, 2021

A beginner’s guide to the financial aspects of buying a house

Contributing writer
Image: The Spinoff/Getty Images
Image: The Spinoff/Getty Images

Our beginner’s guides are quick and simple explainers on everyday money topics hitting headlines right now. This week, we look at what it takes to finance your first home. 

With the average house in New Zealand now worth more than $900,000, the reality for most New Zealanders is it’s getting harder and harder to get on the property ladder. But for those lucky enough to be in a position to even consider homeownership, there are plenty of costs to take into account which could save or add thousands of dollars. Here are just a few things to consider before deciding to take the plunge.

What, where and why

Whether you’re single, a couple, or a family with three kids, the first step is figuring out what you actually want in a home, not just in that moment but also in the long term. How much space do you need? Are you planning to have children or adopt pets? What city or town do you want to live in? These are all crucial aspects of figuring out how much you should be prepared to spend – a newly built four-bedroom house with a backyard and pool in Auckland’s inner city is going to be in a significantly different price bracket to a two-bedroom townhouse on the West Coast.

Mortgages and deposits

As this will likely be the single biggest purchase of your life, you’ll probably need to take out a mortgage (aka a home loan) from a bank or financial institution to be able to afford to purchase your home. Taking out a mortgage means you’ll be lent a set amount of money that you’ll have to pay back – with interest – over a period of time. 

Mortgages often require a deposit of 10% to 20% of the value of the home, and while that doesn’t sound like much on paper, 20% on an $900,000 home is $180,000 which, frankly, is a lot for the average person.

Having a solid amount of money for a deposit (as well as other factors such as your income level) can make a huge difference in the long term since the higher your deposit as a percentage of your house price, the better the mortgage deal you can get.

The average house in Auckland is worth just over $1.3​ million as of April 2021 (Photo: Getty Images)

KiwiSaver

Luckily for first home buyers, there’s the option of withdrawing from your KiwiSaver and, in some cases, applying for the KiwiSaver HomeStart Grant. For a first-home withdrawal, you can apply to withdraw most of your savings as long as you: a) have been a KiwiSaver member for at least three years, b) intend to live in the property yourself, and c) leave at least $1,000 in your account. 

To apply, you’ll need to complete the first home withdrawal application form provided to you by your KiwiSaver scheme provider. You’ll also need to get a solicitor to confirm that the funds will be used for the deposit or final settlement of your home and whose bank account the funds will initially be paid into, usually your solicitor’s trust account.

Finding the best deal

Choosing the lowest-cost home loan and repaying it quickly can save thousands of dollars in the long run, which means whittling down your options from the dozens on offer. Things to consider include the interest rate (which can be fixed, floating, or both) and the establishment fee (which is designed to cover the paperwork involved in setting up a mortgage). 

In order to get the best deal, it’s also recommended you shop around (there’s no obligation to go with your regular bank), negotiate (for example, another bank may offer a better rate on the condition that you switch your accounts to them) and only borrow what you need (some lenders may try and tempt you into borrowing more). 

Typically, a lender will require evidence of your income through three months of bank statements, and your current financial position based on your savings, expenses and assets. The loan amount you’re approved for will depend on all these factors as they indicate the level of debt you’re able to service.

If you’re overwhelmed by the process and prefer to have some help along the way, using a mortgage broker is a helpful option. Mortgage brokers not only work to find you the best deal on the market, but also advise you on everything you need to know about the house-buying process. Most mortgage brokers don’t charge for their services as they’re paid a commission by the lender, but make sure you confirm that before engaging with them. 

Lawyers

If you haven’t already hired a solicitor or conveyancer, you’ll definitely need to at some point in the house buying process. As well as helping you apply for any KiwiSaver withdrawals or grants, lawyers can also review other vague legal or technical information in the buying process, such as the sale and purchase agreement which will specify the terms and conditions of the purchase set by the vendor. They’ll also make sure that all legal processes are followed and check over property reports, such as the Land Information Memorandums (LIM) which is a summary of any information held by the local council about the property.

House hunting and additional fees

Once you’ve been pre-approved for a home loan (which helps put you in a better negotiating position, helps speed up the mortgage documentation process, and enables you to bid with confidence at auctions), it’s time to ramp up the property search process. Around this time, there are various additional costs you may also want or need to consider. Some of these outlined and estimated by MoneyHub include:

  • Valuation fees: A valuation can help you get a more accurate picture of a property’s value than those on websites like QV.co.nz or homes.co.nz. A valuation can cost between $500 to $1,000 depending on the home size and specs.
  • Building inspection fees: To avoid buying a problem home, it can make sense to invest in a property inspection report or LIM report, which can check for things like moisture, leaks, and plumbing or electrical issues. Building inspections can cost between $500 to $2,000 depending on the location or size of the property and the number of optional tests you agree to.
  • Body corporate fees: If you’re buying into a body corporate (which is pretty common for apartments), there’ll be annual fees for maintaining the property, running the lifts, common space repairs, building insurance, and a host of other things. It’s super important to get any annual charges in writing before buying.
  • Repairs and removals: This will depend on the state of the home, but if you know the lights need fixing or the backyard needs clearing, get estimates before you commit so you don’t find yourself stuck with unexpected or ongoing bills.

Making an offer

There are two types of offers you can make for a prospective home: conditional and unconditional. A conditional offer is an offer to buy with conditions attached (for example, arranging finance or being satisfied with a building report you arrange). An unconditional offer is a straightforward offer to buy according to the terms set out in the contract.

If you’re buying at auction or making a pre-auction offer, you can only make an unconditional offer. Because you’ll be liable for financial penalties if you decide to back out, it’s highly recommended you only make an unconditional offer once the property’s been sufficiently looked over by a lawyer, a building inspector and other parties that can help ensure you make the right decision.