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A beginner’s NFT glossary: 30 terms you should know

For the newcomer, the world of NFTs can seem shrouded in opaque terminology. This article outlines 30 common terms to help beginners navigate this new and fast-changing terrain.

29 Jul 2021by Geoffrey Lyons

“If you wish to converse with me,” said Voltaire, “define your terms.” This could have been directed at an NFT enthusiast, who to an outsider may as well be speaking a different language. As a brand new phenomenon, NFTs are difficult enough to comprehend, so it doesn’t help that the terminology surrounding them can seem opaque.

Here are thirty of the most common terms, an understanding of which will help anyone navigate this new and fast-changing terrain.

Beeple - Pseudonym for Mike Winkelmann, perhaps the most well known digital artist. Beeple’s Everydays: the First 5000 Days sold for $69,400,000, the current record for most expensive NFT.

Binance Smart Chain - A blockchain compatible with buying and selling NFTs. While Ethereum is the most popular blockchain for NFTs, prominent competitors include Binance, Flow, and Tron.

CryptoPunk - A unique collectible avatar stored on Ethereum. There are three CryptoPunks listed in the top 10 most expensive NFTs ever sold.

Discord - An instant messaging platform and the go-to place for discussing NFTs.

A picture of fractional ownership
In the words of CoinTelegraph’s Martin Young, when it comes to pricey NFTs, “not everyone has pockets deep enough to bid on such extravagances.” Fractional ownership helps solve this problem ( Image source)

ERC-721 - A token standard that allows for the creation of unique, non-fungible tokens. It differs from ERC-20, for example, which is used to mint fungible tokens.

Ethereum - A blockchain with smart contract functionality. Ethereum is currently the main platform for NFT projects.

Floor price - The lowest NFT price in any given category of NFTs. To “buy the floor” is to buy the cheapest NFT in a project / collection.

Flow - A blockchain created by Dapper Labs that’s custom-made for games and collectibles.

NBA player Derrick Jones goes for a slam dunk
NBA Top Shot is a marketplace for basketball “moments”, which are short highlight clips packaged as NFTs ( Image source)

Fractional ownership - Partial ownership rights over an NFT. Sellers can sell percentages of a work and buyers can buy what they can afford.

Fungibility - Replaceability. Dollars are fungible because a dollar owed can be paid using any dollar in existence. Something that is non-fungible, like a painting, is one-of-a-kind.

Gas fees - Fees that blockchain users pay to compensate for the computational resources used to execute transactions. Gas fees, which are largely specific to Ethereum, ensure that transactions will be genuine and discourages bad actors from spamming the network with a high volume of transactions.

Hashmasks - Digital paintings made by a global team of 70 artists. Hashmasks are unique because consumers have some control over the art. According to the Hashmasks Manifesto, “Each holder has the ability to contribute to the completion of the art piece by giving a name of their preference to the Hashmasks they hold via the Name Change Token (NCT)”.

InterPlanetary File System - A means of storing NFT data that is considered superior to storing on an HTTP gateway URL, since the latter is tied to a specific provider. IPFS addresses allow users to find a piece of content so long as someone on the network is hosting it.

Metadata - The collection of data that defines ownership and differentiates one NFT from another. Metadata can be on-chain or off-chain.  

MetaMask - A wallet used as a gateway to NFT apps like OpenSea, Rarible, and Axie Infinity.

Metaverse - A virtual 3D world where people can interact. Popular blockchain-based environments that comprise the metaverse include Decentraland and The Sandbox, virtual gaming worlds where users can buy and sell land as NFTs.

Minting - The process by which an NFT becomes part of the blockchain. Once an asset is put on the blockchain, it is “minted” as a token and cannot be altered.

NBA Top Shot - A marketplace run on the Flow blockchain for exchanging one of the most unique forms of NFT: virtual basketball “moments.” Users can buy and sell short highlight clips of their favorite plays as if they were trading cards.

Nifty Gateway - A popular NFT marketplace owned by Gemini, a cryptocurrency exchange. A “Nifty” is simply an NFT.

Off-chain metadata - Metadata that is stored outside the blockchain.  

A picture of The Sandbox, a blockchain-based video game.
The Sandbox is a video game on the blockchain that allows users to monetize their creations as NFTs ( Image source)

On-chain metadata - Metadata that is directly incorporated in a smart contract.

OpenSea - Launched in 2018, OpenSea is the first and largest NFT marketplace, boasting four million assets and 135+ DApps.

Polygon - An Ethereum-compatible protocol that provides cheaper, faster, and more secure payment transactions. Polygon is an attractive platform for NFTs because of cheap minting costs and low gas fees.

Rarible - A community-owned NFT marketplace founded in 2020. The Moscow-based platform mostly hosts digital art, and is fuelled by its native ERC-20 token RARI.

Royalties - Money earned by an NFT creator through the token’s resale. Some NFTs automatically pay royalties each time an NFT is sold. An NFT can be hardcoded to pay an artist royalties forever, an interesting use case that has the potential to shake up the music industry.

Smart Contract - A self-executing digital contract. NFTs are composed of code written in smart contract programming language like Solidity.

A picture of Hashmasks
Hashmasks is a collection of 16,384 unique digital portraits ( Image source)

Solidity - A programming language for writing smart contracts. Solidity is a high-level language like Java and Python that is ideal for Ethereum, which hosts most NFTs.

Utility-focused NFTs - NFTs with real-world use cases. For example, NFTs can be used to improve event ticketing. Digital art can also have utility coded into it. E.g., ownership of a Bored Ape grants members-only benefits like access to a collaborative graffiti board.

VeeFriends - An NFT project launched by entrepreneur Gary Vaynerchuk. VeeFriends is a collection of over 10,000 characters that were drawn by Gary. By owning a VeeFriend NFT, users are granted access to VeeCon, his annual conference.

Zed Run - A digital platform where users can race, trade, and even breed NFT racehorses, which Zed Run’s creators call “breathing NFTs.”