Resources

NFT Glossary: 50 Key Terms You Need to Know

February 20, 2023
NFT Glossary: 50 Key Terms You Need to Know
Non-fungible tokens (NFTs) have been making waves in the world of blockchain and crypto, with some NFTs selling for millions of dollars. However, for those who are new to the world of NFTs, the terminology can be overwhelming. To help you navigate this complex world, we have put together a glossary of 50 key terms you need to know.
  • NFT - Non-fungible token is a type of digital asset that represents ownership of a unique item or piece of content.
  • Blockchain - A decentralized digital ledger that records transactions and ownership of digital assets.
  • Smart Contract - A self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.
  • Ethereum - A decentralized blockchain platform that enables the creation of smart contracts and decentralized applications.
  • ERC-721 - A technical standard used for NFTs on the Ethereum blockchain.
  • ERC-1155 - A technical standard used for creating fungible and non-fungible tokens on the Ethereum blockchain.
  • IPFS - InterPlanetary File System is a protocol and network designed to create a permanent and decentralized method of storing and sharing files.
  • Wallet - A software program that stores private keys and enables users to send, receive and manage digital assets.
  • Gas - The cost of performing a transaction on a blockchain network.
  • Metamask - A browser extension that enables users to interact with Ethereum decentralized applications and NFT marketplaces.
  • CryptoKitties - One of the first NFTs, CryptoKitties is a game where players collect and breed virtual cats.
  • DAO - Decentralized Autonomous Organization is a type of organization that is run through rules encoded as computer programs called smart contracts.
  • Yield Farming - The process of staking or lending crypto assets to earn rewards and increase returns.
  • Liquidity Pool - A pool of assets held in a smart contract that provides liquidity for decentralized exchanges.
  • Decentralized Exchange - An exchange that operates on a decentralized network, allowing users to trade digital assets without the need for a central authority.
  • FOMO - Fear of Missing Out is a feeling of anxiety or insecurity caused by the possibility of missing out on something valuable.
  • FUD - Fear, Uncertainty and Doubt is a marketing tactic used to create negative emotions and spread misinformation about a competitor or technology.
  • Airdrop - A marketing campaign where digital assets are distributed for free to a large number of people.
  • Initial Coin Offering (ICO) - A fundraising method for crypto startups where tokens are sold to investors in exchange for funding.
  • Proof of Work (PoW) - A consensus algorithm used in many blockchains that requires computational work to validate transactions and mine new blocks.
  • Proof of Stake (PoS) - A consensus algorithm that allows users to validate transactions and earn rewards based on their stake in the network.
  • Centralized - A system or organization that is controlled by a central authority.
  • Decentralized - A system or organization that operates without a central authority.
  • Web 3.0 - The next generation of the internet, which is expected to be more decentralized, open and user-centric.
  • NFT Marketplace - A platform for buying and selling NFTs.
  • Digital Collectibles - A type of NFT that represents a unique digital item, such as artwork or music.
  • Tokenomics - The study of the design and economics of a token, including its use case, supply, and distribution.
  • ERC-20 - A technical standard used for creating fungible tokens on the Ethereum blockchain.
  • Gas Fee - The fee required to be paid to perform a transaction on the blockchain.
  • Immutable - A characteristic of a blockchain network that refers to the inability to modify or alter transactions that have been recorded on the blockchain.
  • Permissionless - A characteristic of a blockchain network that refers to the ability for anyone to participate in the network and perform transactions.
  • Private Key - A secret code that enables the owner to access and control their digital assets.
  • Public Key - A publicly available code that enables other users to send digital assets to the owner's wallet.
  • Layer 2 - A secondary layer built on top of a blockchain network to increase its scalability and efficiency.
  • Scalability - The ability of a blockchain network to handle a large number of transactions.
  • Interoperability - The ability of different blockchain networks to communicate and exchange data with each other.
  • DApp - Decentralized application is an application built on top of a blockchain network that operates without a central authority.
  • Web3 - A term used to refer to the third generation of the web, which is expected to be more decentralized and open.
  • Gaming NFTs - NFTs that represent in-game items, characters, or collectibles.
  • Digital Identity - A way to represent and verify a person's identity on the blockchain.
  • DAO Token - A type of token that represents ownership in a decentralized autonomous organization.
  • Governance Token - A type of token that enables holders to participate in the decision-making process of a blockchain network or a decentralized organization.
  • NFT Art - Artwork that is created as an NFT and sold on NFT marketplaces.
  • Royalties - A percentage of the sale price that is paid to the original creator every time an NFT is resold.
  • OpenSea - One of the largest NFT marketplaces, where users can buy and sell NFTs.
  • Minting - The process of creating and issuing new NFTs.
  • Proof of Authenticity - A way to verify the authenticity and ownership of an NFT.
  • ERC-998 - A technical standard used for creating composable NFTs on the Ethereum blockchain.
  • Staking - The process of locking up digital assets to earn rewards or to participate in the decision-making process of a blockchain network.
  • Virtual Land - NFTs that represent virtual real estate in virtual worlds or metaverses.

As the NFT market continues to grow, it is essential to keep learning about the latest developments and terminology. This glossary provides a starting point for understanding key NFT terms, but it is important to continue learning and exploring this exciting new field. We encourage you to check out our other resources to stay up-to-date and informed about the world of blockchain and NFTs.