NFT glossary

NFT glossary

Learn the key terms to become conversant with NFTs & crypto

With interest booming in the world of NFTs (nonfungible tokens) and crypto, the Digital Culture Works team thought it would be helpful to list some of the key terms to know so that you can better understand what’s going on.

Below are some key terms in the NFT field, listed in alphabetical order. Have some additional words or phrases you’d like to see added? Please email them to us — thank you!

Airdrop

An airdrop is a promotional technique by a blockchain startup or project in which cryptocurrency tokens or coins are distributed to members’ wallet addresses — usually for free — as a way to spread awareness about the site or service. The goal of an airdrop is to grow the number of people using or trading the new virtual currency, resulting in a larger user base and a wider disbursement of the tokens or coins.

The physical Bitcoins you see in the media are a novelty and contain no monetary value.
The physical Bitcoins you see in the media are a novelty item and contain no monetary value.

Bitcoin

Bitcoin is the world’s most well-known cryptocurrency. Currently its main utility is as an investment vehicle for stored value, although people and companies are starting to use it as a secure peer-to-peer network to facilitate instant payments. There are no physical bitcoins, only balances kept on a public ledger that anyone can access. Bitcoin bills itself as a new kind of open source P2P money.    

Blockchain

The blockchain is a distributed digital ledger that stores data across a global network, making it publicly verifiable and unchangeable rather than centralized or controlled by a single entity. Blockchain is the technology used by cryptocurrencies to allow secure transactions to take place. Because the Bitcoin blockchain is a public record of all transactions accessible by anyone at any time, it is not truly anonymous. Instead, the transactions in the blockchain are encrypted with public key cryptography that masks the real identities of the individuals behind the transactions. In addition to Ethereum, some popular blockchains include Solana, Tezos and Polygon.  

Coin

A coin is a digital medium of exchange in the form cryptocurrency. It can be held as a form of stored wealth, such as Bitcoin, or can be used to transfer value from one person to another. In contrast, a token (see below) is a cryptocurrency that is primarily used to access services on a specific network or as a record on a blockchain that proves ownership of a digital asset. 

Copyminting

Copyminting, or copy minting, is a relatively new term that refers to the fraudulent act committed when a person downloads someone else’s NFT and mints it as their own.

Cryptocurrency

Cryptocurrency is decentralized digital money that’s usually based on blockchain technology and secured by cryptography, which makes it nearly impossible to counterfeit or steal. Funds are usually kept in a cryptocurrency wallet (see below).

Cryptocurrency exchange

A cryptocurrency exchange (or digital currency exchange) is a business that allows customers to trade cryptocurrencies for other currencies or assets, such as conventional money or other digital currencies. Exchanges often accept credit card payments, wire transfers or other forms of payment. They come in two flavors: a centralized exchange (CEX) or decentralized exchange (DEX) (see below).

Dai

Dai is a digital currency issued by MakerDAO, an Ethereum-based protocol, that anyone can use for trading or transactions. Unlike cryptocurrencies that tend to be more volatile, Dai is a stablecoin cryptocurrency that aims to keep its value as close to one U.S. dollar as possible through an automated system of smart contracts on the Ethereum blockchain. More than 400 apps and services have integrated Dai, including wallets, DeFi platforms and games.

DAO

A DAO, short for decentralized autonomous organization, is an Internet entity owned and managed by its members with no central authority. Decisions are made from the bottom up, governed by a community organized around a specific set of rules enforced on a blockchain through smart contracts.

Dapp icons

 

Dapp

A dapp (or dApp) is any decentralized software application that runs on a peer-to-peer decentralized network or the blockchain.

DeFi

DeFi is shorthand for decentralized finance. It’s a concept in which financial products are available on a public decentralized blockchain network, making them open to anyone to use rather than going through a middleman such as a traditional financial institution. DeFi enables buyers, sellers, lenders and borrowers to interact in a peer-to-peer fashion or via a strictly software-based approach.

Dex

A Dex or DEX, short for decentralized exchange, is a type of exchange where users can trade cryptocurrencies directly with each other. A Dex enables direct peer-to-peer cryptocurrency transactions to take place online securely and without the need for an intermediary. Similar to a stock exchange, a Dex is governed by smart contracts on the Ethereum blockchain that enforces rules and executes trades. 

Drop

An NFT drop refers to the release of a new NFT project to the public, typically in an NFT marketplace. A token drop refers to the release of a new digital token distributed to a project’s stakeholders or made available for sale to investors.

Ethereum

Ethereum is a software platform in the form of a distributed database that keeps records of transactions and lets people build applications on top of it. Ethereum enables ether to be used for secure transactions on the blockchain. It’s is the second most popular cryptocurency after Bitcoin. But where Bitcoin is most useful as an investment vehicle, ether is more widely used as a currency of exchange.

currency

 

Fiat

Fiat is a sports car. No, wait, that’s not right. It’s any form of currency that a government backs as legal tender. This includes money in circulation such as paper money, coins or any currency that’s liquid. You probably don’t need to know this unless you listen to podcasts about crypto. 

FUD

FUD is shorthand for “Fear, Uncertainty and Doubt.” The term is used by those who don’t like a project or want to lower the price of a digital asset or, more generally, to dismiss concerns raised by critics about crypto.

Gas fee

A gas fee refers to the amount you pay to conduct any transaction on the Ethereum network, including purchases and minting of NFTs. Gas fees are indicated in a denomination of ether called gwei, which is the smallest unit of ether. The fees are determined based on the amount of computational effort it will take to execute certain operations. 

Hash

A hash is a fixed-length alphanumeric string of randomized letters and numbers used to represent words, messages and data of any length. In the blockchain world, any data stored on a blockchain may be called a hash. Hashing refers to the process of running cryptocurrency transactions of varying lengths through an algorithm to obtain a fixed-length output. 

HODL

HODL is a term that originated from a misspelling of “hold” that refers to buy-and-hold strategies with regard to Bitcoin and other cryptocurrencies. Some folks have adopted HODL as shorthand for “hold on for dear life.” Don’t worry about using it unless you’re a true believer.

metaverse
Image via William Burns III, who defined the modern Metaverse.

 

Metaverse

The Metaverse is a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality and the Internet. More colloquially, metaverses are immersive virtual universes that offer users a set of unique experiences. The characters in Ready Play One were interacting within a Metaverse. Some people have begun buying NFTs with an eye toward tricking out their space within a virtual world or carrying it with them within a virtual experience. In the metaverse of Decentraland, you can order Dominos pizza and get it delivered to you in real life. The term was coined by author Neal Stephenson in his 1992 science fiction book Snow Crash.

Minting

Minting refers to creating an NFT and having it hosted in a smart contract on the blockchain.

CryptoKitties
The Ethereum-based game CryptoKitties helped popularize the idea of NFTs.

NFT

A non-fungible token (NFT) is a unique digital certificate, registered in a blockchain, that is used to record ownership of an asset such as an artwork or a collectible. Every NFT contains distinguishing information distinct from any other NFT, making ownership easily verifiable. Think of an NFT as proof of ownership in the digital economy. 

NFT marketplace

An NFT marketplace is a website where you can buy, sell and trade anything that may be considered an NFT, that is, any file that’s tied to a cryptocurrency token.

Nonfungible

Non-fungible refers to stuff that’s not being mutually interchangeable. While one U.S. dollar can be exchanged for any other dollar (and is thus fungible), assets such as paintings or rare books are non-fungible because each unit is a distinctive work with inherently different qualities. 

Oracle

An oracle is a bit of code that provides smart contracts with external information by serving as a bridge between blockchains and external information that resides on outside networks. Developers need to know this, but regular folks don’t.

Sharding

Sharding in the context of NFTs refers to the practice of breaking NFTs into smaller subsets, or shards, generally for the purpose of allowing groups of individuals to purchase an expensive NFT so that it can be owned collectively. However, the practice is still evolving and can contain more friction than an individual purchase of an NFT.

Smart contract

A smart contract refers to a self-executing software program or transaction protocol that runs autonomously and aims to automatically execute, enforce or document legally relevant events and actions according to the terms of an agreement between buyer and seller. Smart contracts help you exchange money, property, shares or anything of value in a transparent, conflict-free way while avoiding the services of a middleman or external legal system.

Staking

In crypto, staking is the process of locking up or depositing a certain amount of your crypto and agreeing not to withdraw it from an exchange or wallet for a specified amount of time in return for interest rewards. It’s similar to the interest earned by purchasing an old-fashioned CD (certificate of deposit) or savings bond … only your returns aren’t protected by the government.

Token

In the context of the cryptocurrency industry and NFTs, a token is a record on a blockchain that gives its owner the right to a certain amount of digital currency or the right to do certain things with the asset. Think of it as a digital certificate of authenticity. Often a token is used to faciliate or represent a transaction. There are different types of tokens, including social tokens, utility tokens and governance tokens, and each affords a different set of rights or assets. On the blockchain, tokens are typically represented as long lines of randomized letters and numbers called hash. The value of a token rises or falls based on the demand for the services that the token grants or the asset that it represents.

Wallet

A wallet, or cryptocurrency wallet, is a software application that serves as a blockchain-secured bank account for your cryptocurrencies and, increasingly, as a safe encrypted place to access your NFT assets, such as digital art.

Web3

Web3 (or Web 3, web3) refers to a vision of the Web that is user-centric and decentralized without any single authority or group of tech companies in control and in which individuals reap the benefits of their creations and users have more control over their data, identity, security and transactions.

Whale

A whale is someone who owns a lot of Bitcoin or another cryptocurrency. 

 

Bonus definitions: More terms you may come across

1/1

A one-of-one artwork or NFT is a one-of-a-kind work. A limited-edition work, on the other hand, refers to works that may have multiple versions (and thus owners).

address

A crypto address or wallet address is a unique string of numerals and letters similar to an ip address. The address points to a wallet whose contents and transactions are publicly viewable, including amounts of crypto and the NFTs it contains. Cryptocurrency wallets enable you to send and receive digital assets securely. Think of your wallet addresses as your bank account numbers and routing numbers/SWIFT codes all rolled into one long string of characters. It’s fine to share your wallet address – but never share your secret phrase. Example of a wallet address:

0x98D7157ER9ab66b084dfgB7i790302V5n6e933bq

apeing

We don’t use the term, but apeing refers to buying into an NFT project without bothering to research it thoroughly.

burn

Burning is the process by which tokens (also called coins) are removed from circulation or NFTs are removed from a collection. By reducing supply, burning supports or props up the underlying price of the remaining assets. Different blockchains handle burning in different ways.

degen

degen, short for degenerate, is often used as a term of endearment for confident true believers who back a crypto project no matter what. More broadly, degens can refer to crypto diehards.

diamond hands

A person with diamond hands is someone who holds on to a crypto asset through price volatility, negative news and poor market performance, come what may.

Discord

Discord is a text, voice, and video instant messaging platform that’s popular with gamers and widely used in the crypto community. Most NFT projects host a dedicated Discord where creatives, NFT collectors and the public can interact. Users need an invite link to enter each Discord.

dox

To dox is to reveal the identity of someone. Its original meaning was to publicly identify or publish private information about someone, especially as a form of cyberbullying, but it has taken on a more benign meaning that equates to being transparent about a person or team’s identity.

floor

The floor or floor price of an NFT project is the lowest price at which an NFT from that project can be bought on a secondary market such as OpenSea. It’s considered the most popular metric for tracking the value of a collection (though that’s a dubious proposition).

fren

Fren is an intentional misspelling of friend and is used in some informal conversations online. Don’t feel the need to use it unless you are deep down the crypto rabbit hole.

FUD

FUD stands for Fear, Uncertainty and Doubt. You’ll see the term brandished in crypto and NFT circles alike to describe news stories, messages or attitudes that cast a negative slant on crypto or Web3.

generative art

Generative art has become a leading feature of major NFT projects. In a generative art collection, all of the NFTs share certain traits—clothes, headwear, skin color—and each NFT contains enough differences in colors, patterns, etc. to make it distinctive. Typically, while initial traits are hand-crafted, each NFT is automatically created by a computer with a random combination of all the available traits.

genesis drop

A genesis drop refers to the first NFT drop or collection released by an artist or project.

gm

gm is a friendly greeting crypto natives use to start off the day. It stands for “good morning” and you’ll often see the term used on Twitter and Discord.

gwei

gwei is the denomination used in defining the cost of gas in transactions involving ether.

limited edition

A limited edition is an NFT collection in which there are a specific number of NFTs available to be minted as opposed to a 1/1, which refers to a single original work.

maxi

A maxi or maximalist believes that one particular cryptocurrency or approach is the one that will or should win out.

PFP

PFP refers to a profile picture within an NFT project that is designed to be displayed as a person’s social media profile picture or avatar. Many of the top NFT collections, such as Bored Apes or Doodles, are PFPs.

private key/secrecy key

A private key or secret key is a string of letters and numerals, similar to a password, that lets you access and manage your crypto funds. Private keys are also used to sign transactions and prove ownership of a blockchain address. Do not—ever—reveal your private key to anyone. It’s even a bad idea to store it on your computer or phone.

rug pull

A rug pull is a type of scam in which developers abandon a project and take their investors’ money not long after launch. To get “rugged” is to get ripped off by an unscrupulous group of con artists.

satoshi

Satoshi Nakamoto is the individual or group of individuals who created Bitcoin.

seed phrase

A seed phrase is a series of words generated by your cryptocurrency wallet that gives you access to the crypto within that wallet. Your seed phrase gives you access to your wallet and all the private keys in the wallet. Don’t share your seed phrase with anyone or store it on your computer or phone.

ser

Some crypto enthusiasts use ser, an intentional misspelling of sir, as a lighthearted or ironic greeting. Others use it as a polite way of disagreeing with someone.

sweep

To sweep the floor means to buy up a large number of the most inexpensive NFTs in a collection on the secondary market.

unlockable content

Unlockable content is content accessible only to those who hold a specific NFT. Such content can range from high-fidelity recordings or photos to access to private groups or an invitation to a sit-down dinner.

WAGMI

A common saying of the Web3 crowd is that we’re all gonna make it — WAGMI.

wei

Wei represents the smallest fraction of an ether, with each ether pegged to 1,000,000,000,000,000,000 wei.