If you are new to the crypto space or want to refresh your memory, here are the essential terms to understand all about NFTs.
Right now, at least 4 million people in the USA own NFTs (or plan to), and it's fantastic. But NFTs are still very new. There are even more people feeling confused and a bit lost around blockchain and non-fungible tokens. If you're one of those (with a big question mark in mind), you'll feel more confident to set foot on the NFTs world after reading this glossary.
We'll explain some basic concepts of non-fungible tokens for newbies, artists, creatives, and people who need to double-check a specific word. You can come back to this article whenever you feel lost as we'll keep it fresh with new terms every month.
Without further introduction, let's start.
What are NFTs?
Let's answer a fundamental question: What are NFTs? Well, dear Jedi, get ready for your first lesson. You can leave your lightsaber aside for a moment.
Non-fungible tokens (NFTs) may sound like fancy buzzwords at first, but it's actually pretty easy to understand. NFTs are unique digital assets on the blockchain, and as the name reveals, these are non-fungible, which means that you can not alter them in any way. An NFT can be any piece of digital art, video, image, or even music!
Holding NFTs is also a unique way of proving ownership. Let's picture the Mona Lisa: The original work of art by da Vinci is in The Louvre Museum, in Paris, France; and you can maybe have a copy or a photo of it, or the digital painting. But you still don't have THE ONE. You don't have the original piece of the Mona Lisa. That's similar to how NFTs work. NFTs are unique and authentic digital assets that you can trade like baseball cards, but only the person with the original card gets the credit.
Plus, NFTs, as part of the Ethereum blockchain, provide transparency in the information held. It is decentralized, which means that you can follow the link of the owner and see what digital goods they have. But again, you cannot alter that information.
NFT A to Z: The terms you need to know
This market is rapidly growing and changing. New terms are coming up every day, so let's learn the basic terminology to understand a bit more of what's going on—Whether directly on marketplaces like OpenSea and Rarible or just around Discord and Twitter.
Sending coins or tokens to specific wallets, sometimes for free. Projects airdrop NFTs to existing holders to build a stronger community and add more value and utility to the existing NFTs. For example: You'll only receive an airdrop as long as you hold an asset.
When someone shares not publicly available info about an NFT project with someone else and it leads to a higher return on investment in a short period.
Buying into a new NFT project. For example: "Send me some projects to ape in."
A system where transactions are registered, as transactions of cryptocurrencies like Bitcoin or Ethereum.
Stable, strong, and well-recognized projects. An example of what we can consider a blue chip can be CryptoPunks by Larva Labs. This is one of the most relevant and earliest NFT projects with prices ranging from 80 to 159 ETH.
Digital currency for an online transaction using blockchain technology, a decentralized system that holds the records and registration. Decentralized means it is not controlled by a single person or the government.
Short for all related to cryptocurrencies.
A Decentralized Autonomous Organization (DAO) has no central leadership; it's transparent and encoded on the blockchain. As described by Ethereum DAOs are:
- Member-owned communities without centralized leadership.
- A safe way to collaborate with internet strangers.
- A safe place to commit funds to a specific cause.
The transfer of control from a single entity to a distributed network. For example: "NFTs are part of a decentralized economy."
When you take down your NFT listing. This can mean many things. Someone can take down their token because they believe in the project in the long term. They don't want to sell it at the moment, or they'll wait until the price goes up to list again and get higher earnings.
The creation of an NFT derivative from the original art, like an art reproduction by another artist. For example like this adapted version of Bored Ape #1934:
People who decide not to sell or hold their assets even under pressure or high volatility of the market.
Common way of saying a new digital collectible is out or will soon be available.
DO YOUR OWN RESEARCH! Yes, in uppercase letters, because DYOR is very important.Investing or selling your NFTs is not the get-rich-quick kind of environment, and there's a lot of misinformation around the topic. So, like Anakin said, "sometimes we must let go of our pride and do what is requested of us," and that is DYOR. It's essential to do your research, read, ask, and do whatever you need before aping in, to avoid scams.
Think of ERC as a set of rules and guidelines that tokens in the Ethereum blockchain must follow. It's a more technical term, so if you want to get the details and more examples, check out this article by Investopedia.
This should've been the first term, huh? But we preferred to do this alphabetically, so, keep calm, you're doing fine. Ethereum is a blockchain platform and a cryptocurrency itself. Their cryptocurrency is called Ether (Eth).
Fiat money is the traditional money as we know it. Cash with a specific value that has been established by the government or by a particular regulation. An example of fiat currencies is the euro.
The lowest price available to buy an NFT.
We're on this mission together. "Fren" means friend, pal, or buddy. It's just slang, but you'll see NFT degens using it a lot!
Nope, not gas for your car. When talking about NFTs, it's an analogy, like the gas you need to go somewhere, but in this case, to complete a transaction on the Ethereum blockchain. You have to pay this fee for the computational effort performed by Ethereum miners (computers running software). The gas fee is determined by supply and demand. It depends on how many people are trying to make a transaction, and how much are they willing to pay to complete it. When lots of people are using Ethereum, you can pay miners more to do your work first. Gas price is like a bribe used to jump to the front of the line.
When the gas fee goes higher and higher, there's your gas war. Gas wars occur when many people try to make a transaction quickly at the same time, and the gas fee increases ridiculously.
The process in which the artist designs a system or set of rules and then creates new aesthetics and possibilities with the help of an algorithm.
If you're already entering the NFTs market, then you've probably seen different abbreviations and acronyms such as "GM," and it means good morning. As easy as that.
Short for "going to make it" and "we're going to make it." Because in the community, we support each other, and that's part of what makes NFTs so cool This acronym is mostly used when people are trying to be optimistic. For example during a sell, or a new collection drop.
Owners—people who own an NFT.
This one can be tricky. If you're into video games, you've probably seen it as "looking for a group," but in the NFT space, it's "let's f#cking go."
How easily an asset can become another asset without affecting its price. If your NFT has high liquidity, then you'll likely find a buyer.
The metaverse is a digital world in which people can interact.
When an NFT has been created, and it's now part of a smart contract in the blockchain.
Similar to DYOR, NFA stands for: Not financial advice.
Someone who doesn't know much about the NFT market.
People who sell too early because the value of their assets is too low or the market is too risky.
Profile picture; this type of NFT is gaining popularity, and holders are now using these on their social media profiles.
One of the critical factors to determine the value of an NFT. Each NFT has unique and different properties or traits. Rarity helps rank how successful or attractive an NFT can be. These properties have different scores, that help calculate the final rarity ranking. Just like most things in life. And when an NFT is rare, its value increases. You can use different tools to check the rarity of an NFT, like Rarity.tools or Rarity Sniper.
Explains and shares future actions for the NFT project and allows the community to see what's coming.
Rug = scam; Rug or rug pulled it's also referred to when devs abandon a project and take their investors' money.
When you buy or sell different assets with other investors or traders. Sometimes it's only referred to as "secondary."
To keep it simple, ser = sir.
It's a self-executing software program. It has the transaction information between buyer and seller and all the relevant details, with no intermediates or external parties involved.
A snapshot records the information in the blockchain ledger at a specific time. For example, the record includes fees and transactions.
Sweep the floor
When someone sweeps the floor, they'll buy all the NFTs at the floor price of the moment.
A record on the blockchain that will allow you to make transactions, like receiving an amount of cryptocurrency for a specific asset, for example, selling your NFTs.
NFTs now can have some utility or application. It's not only about holding the asset but the possibility of using it too. Like gamified NFTs for fantasy sports, access NFTs for exclusive content or experiences, or engagement NFTs for fan communities.
It's your bank account for cryptocurrencies. But just like in the real world, there are a lot of wallets in the crypto world too, for example Metamask. Don't forget to do a little research before making any transactions.
When will the price or value increase? That's "wen moon." It's a reference to value skyrocketing.
Someone who has a significant amount of NFTs, Bitcoin, Ethereum, or any other cryptocurrency. And when they make a move, we all see it.
Feeling inspired to create your NFTs?
Maybe you're not Yoda yet, but we're here to help you in your journey. Don't be afraid to start exploring NFTs and the crypto space, or if you're already working on something, drop us a line @buenonft and let us know.