By NFTs, or non-fungible tokens, have been all over the news and social media lately, and it’s hard to ignore the buzz. And if you are like me, you might be asking, does it have a future? Is the way we should go? NFTs revolutionizing the way we think about ownership and value in the digital world. It is something special, something new. Bringing new creative possibilities. And these are not the only reasons why we should care about NFTs. In this article, I’ll give you a beginner’s guide to some of the key terms and acronyms you need to know to understand this emerging phenomenon. Let’s dive into NFT Glossary.
If you didn’t read my first article, check it out as I introduce what are NFTs – NFTs – The Digital Mona Lisas for Dummies (and everybody else too)
What is an NFT and why are they popular?
For those who didn’t read my first article, let’s do just a quick introduction. An NFT is a one-of-a-kind digital item that’s stored on a blockchain. Non-fungible means that something is unique and cannot be exchanged for other things of the same type. Unlike traditional digital files that can be copied and shared endlessly, an NFT cannot be duplicated or replaced. It has a unique identifier and a digital signature that prove its ownership and authenticity. No worries, if you don’t understand some of the terms we already had in this article, we will get to the NFT glossary soon. But please definitely check my first article about NFT, where I am trying to explain the NFT in deep, so you would understand what it is – NFTs – The Digital Mona Lisas for Dummies (and everybody else too)
These cool digital collectibles can be anything that’s either already digital or can be digitized. We’re talking about anything from artwork, music, videos, and games to memes, tweets, domain names, and even virtual real estate. And let’s not forget about some of the famous NFTs out there, like the first tweet by Twitter founder Jack Dorsey that sold for a whopping $2.9 million! Or a collage of digital artworks by Beeple, which sold for $69 million at Christie’s auction house.
How can NFT benefit you?
The beauty of NFTs is that they offer tons of benefits for both creators and collectors. Creators can monetize their work directly without any pesky middlemen. And believe me (or maybe you already have an experience), some of them are pretty greedy. Plus, they retain ownership rights and can earn royalties from their work even after it’s been sold. For collectors, NFTs offer a way to own and display rare and valuable digital items that are verified to be unique and scarce.
So, there you have it! NFTs are the coolest new way to own and display digital treasures. And if you’re ready to jump on the NFT bandwagon, there are tons of platforms and marketplaces out there where you can buy, sell, and trade these unique digital goodies. But NFTs can also be confusing and intimidating for newcomers. There is a lot of jargon and slang involved in the NFT space, which can make it hard to understand what is going on. That’s why we created this article with NFT Glossary to help you learn the basics of NFTs and navigate the alphabet soup of non-fungible tokens.
NFT Glossary – Key terms and acronyms
OK, and here we are! To understand how NFTs work and what makes them different from other digital assets, you need to know some of the key terms and acronyms that are used in the NFT space. Let’s see what terms are in this NFT Glossary, here are some of the basic and the most common ones:
Blockchain
Imagine a bunch of computers that are connected to each other and share information. Now imagine that they keep track of every transaction that happens online, like who sends money to whom, who buys what, who owns what, etc. And they do it in a way that no one can cheat or change history. That’s basically what a blockchain is. It’s like a giant ledger that everyone can see and trust, but no one can mess with it. There are different kinds of blockchains that have different rules and features, like Bitcoin, Ethereum, Binance Smart Chain, etc. They are like different flavors of ice cream: some are more popular, some are more expensive, some have more toppings, etc.
Cryptocurrency
A cryptocurrency is a type of money that only exists online. It’s like digital cash that you can use to buy things or save for later. But unlike regular cash, it’s based on math and code and it runs on blockchains. There are thousands of cryptocurrencies that have different names and values, like Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), etc. They are like different kinds of stickers: some are rare, some are shinier, some have more memes, etc.
Ethereum
Ethereum is one of the coolest and most popular blockchains for making and collecting NFTs. It’s also a place where you can create and use smart contracts, which are like magic spells that do things automatically on the blockchain without anyone telling them what to do. Ethereum has its own cryptocurrency called ether (ETH), which is like the fuel that powers everything on the network. Most NFTs are made and traded on Ethereum, although other blockchains also have NFTs.
Smart contract
A smart contract is like a robot that follows instructions on the blockchain. For example, a smart contract can send an NFT from one person to another once they pay a certain amount of money, without needing anyone else to help or approve. Smart contracts can also decide how an NFT looks and acts, like its name, description, picture, features, etc.
Minting
Minting is how you make an NFT and put it on the blockchain. It involves uploading a digital file to a website or an app that helps you turn it into an NFT. You can mint anything you want: a picture, a video, a song, a drawing, a meme, etc. But be careful: once you mint something, you can’t change it or delete it. It’s like making a permanent tattoo on the blockchain.
Metadata
Metadata is the stuff that tells you more about an NFT and what makes it special. It can include the name, description, picture, features, edition number, creator name, etc. of an NFT. Metadata can also include links to other websites or apps that give you more info or background about an NFT. Metadata is stored on the blockchain as part of the smart contract that makes an NFT and can be seen by anyone who owns or looks at an NFT.
Wallet
A wallet is like a normal wallet, but in a digital form where you keep your cryptocurrencies and NFTs. It’s also like a digital key that lets you access your cryptocurrencies and NFTs on the blockchain network. You need a wallet to mint, buy, sell, or trade your NFTs. There are different kinds of wallets that have different features and security levels, like MetaMask, Trust Wallet, Coinbase Wallet, etc. They are like different brands of jeans: some are comfier, some are more stylish, some have more pockets, etc.
Token
A token is like a digital certificate that proves that you own something on the blockchain network. It can be a cryptocurrency or an NFT. A token has a unique code that identifies it and shows its value and features. There are different kinds of tokens that have different purposes and standards, like ERC-20, ERC-721, ERC-1155, etc. They are like different types of cards: some are for playing games, some are for collecting, some are for trading, etc.
Marketplace
A marketplace is like a digital mall where you can buy, sell, or trade your NFTs. It’s also like a digital gallery where you can browse, view, or admire other people’s NFTs. You need a wallet and some cryptocurrency to use a marketplace. There are different kinds of marketplaces that have different categories and fees, like OpenSea, Rarible, Nifty Gateway, etc. They are like different stores in a mall: some are more popular, some are more expensive, some have more variety, etc.
Rarity
Rarity is how rare or unique an NFT is compared to other NFTs. It can depend on many factors, like the edition number, the attributes, the quality, the demand, etc. Rarity can affect the value and popularity of an NFT. For example, an NFT that is one of a kind or has a special feature can be rare and more valuable than an NFT that is one of many or has a common feature.
Collection
A collection is a group of NFTs that belong to the same project or series. It can have a theme, a style, a story, or a message that connects the NFTs together. A collection can also have a community of fans or collectors who support and promote the project or series. Some of the most famous collections are CryptoPunks, Bored Ape Yacht Club, Art Blocks, etc. They are like different bands or movies: some have more fans, some have more awards, some have more impact, etc.
More NFT glossary slang
Fungible vs non-fungible
Fungible means something that can be swapped for something else of the same value. Non-fungible means something that cannot be swapped for something else of the same value. For example, a dollar bill is fungible because you can swap it for another dollar bill of the same value. A painting is non-fungible because you cannot swap it for another painting of the same value.
Minting, burning, and wrapping
Minting means making a new NFT on a blockchain network. Burning means getting rid of an existing NFT on a blockchain network. Wrapping means changing an existing NFT from one blockchain network to another. For example, you can mint a new NFT on Ethereum, burn it if you don’t like it anymore, or wrap it to Binance Smart Chain if you want to use it there.
Gas fees and gas wars
Gas fees are the fees that users have to pay to the blockchain network for doing their transactions. And Gas wars are situations where users fight with each other by raising their gas fees to get their transactions done faster. For example, if you want to mint or buy a hot NFT, you may have to pay a high gas fee or join a gas war with other users who want the same NFT.
Conclusion of NFT Glossary
Congratulations! You’ve made it to the end of our beginner’s guide to NFTs and NFT Glossary. Now that you have a basic understanding of what NFTs are and why they’re so popular, it’s time to start exploring the world of digital collectibles. As an artist, NFTs offer a new way to monetize your creations directly and build a stronger connection with your fans. By using blockchain technology, NFTs ensure that your work is authentic and unique, giving collectors the chance to own something truly special.
Remember, with NFTs, you’re not just selling a digital file – you’re selling a piece of your creativity and your story. So, take the time to explore the NFT platforms and marketplaces, create your own unique digital collectibles, and be sure to familiarize yourself with the NFT Glossary. With a little bit of knowledge and creativity, the possibilities are endless.
About the author:
My pursuit of artistic perfection extends beyond the stage and into the world of film. Represented by agent Jill Kabush at Dorothy S. Management, I am actively seeking opportunities to make my mark in the industry. Though my creative interests are diverse - including DJing and illustrating - my primary passion lies in acting. I received rigorous training at the Vancouver Academy of Dramatic Arts and have since performed in prestigious theaters such as Theater Around The Corner, Moravian Theater Olomouc, Theater DiGoknu, and Mlada Scena II. Through unwavering dedication and hard work, I continue to hone my craft and push myself to new heights in pursuit of artistic excellence.
