Did you know that gas fees in the NFT world are not the fee you pay for gas consumption? It is the cost of transferring NFTs. Just like that, there are plenty of terms – Blockchain, NFT, Staking, Minting, DAO, P2E. There are so many new words and phrases associated with the NFT world. It can get confusing.
Therefore, we have decided to curate a list of all the terms in the NFT or blockchain world. We hope to make things easier for people to understand. It is aimed at getting everyone up to speed. The objective is to ensure that nobody ever gets confused and learns everything there is to know about the NFTs before conducting their research.
So, let’s have a look:
Getting Up To Speed – The Major Terms
First, we will get you up to speed with some of the grand NFT terms:
Also known as Crypto, it is the term used for digital currencies. But not for all digital currencies. It is for Decentralized Digital Currencies, like Bitcoin, Ethereum, and other similar options.
Decentralized currencies are not owned by any particular organization or government. These are run by the people, for the people. So, you are responsible for owning and storing them. Therefore, their value also varies.
Blockchain is the technology on which Cryptocurrencies and NFTs exist.
blockchain is a collection of blocks of data. Think about the Excel Sheets or Spreadsheets. They consist of block-like cells, right?
Blockchain works similarly. It creates a new block for any action taken for anything that exists on blockchains like Solana or Ethereum. New data is recorded and you can’t edit or delete older blocks.
That’s why we see many things related to blockchain like Proof-of-Work, Proof-of-Staking, etc. You will learn more about these below.
In short, any action you take on the blockchain is recorded.
3- NFTs & FTs
Non-Fungible Tokens are one-of-a-kind digital assets available on Blockchain. There aren’t two of the same type. Each user that owns NFT can decide what to do with them. They work with the transfer of ownership protocol.
On the contrary, fungible tokens are more fluid and easier to transfer around. They have a fixed value for the same token that you can exchange them for. Cryptocurrencies are fungible tokens. These are blockchain assets that are different from NFTs because usually, they are just up for collection. They can’t be traded or are usually the first generation of NFTs.
4- Genesis NFTs
Genesis NFTs are usually the first generation or first-in-line NFTs from any brand, creator, or company. For example, Nike has Genesis NFTs known as CryptoKicks. Genesis NFTs have a fixed supply and finite numbers. They are irreplaceable.
5- Noncustodial Wallets
In short, these are the wallets that allow you to store blockchain assets and transfer them around. MetaMask is one example.
An address from which users can transfer NFTs or receive NFTs. There are Private Keys, Public Keys, etc. Think of this as an email address or ID that is permanent for each wallet and other assets on the blockchain.
Things You Will Mostly Come Across – Common NFT Terms
There are many other terms that are related to the above-given stuff. You will find these commonly used in NFT-related posts, conversations, and more. So, let’s get you up to speed:
A direct or free transfer of NFTs, Cryptocurrency, and other blockchain assets to your wallet. It doesn’t cost Gas and Airdrops conducted by the NFT Projects as a giveaway. There are different requirements for each.
You might have heard of the NFT term ‘burn mechanism.’ It is when a user deletes a digital asset on the blockchain (NFTs, cryptos, etc.). They link to a ‘void wallet,’ and nobody owns them. The burning mechanism is usually to reduce the influx of tokens.
9- DAO & Dapp
Decentralized Autonomous Organization is the way most things on Block-chain work. DAO is where no single person is the owner. Anyone who holds the power of DAO has equal authority as others. You could call it something similar to a ‘community-driven’ approach.
Dapp are actually apps that work on the blockchain AKA Decentralized Apps.
Decentralized exchanges (DEX) are tubes that provide users an opportunity to conduct exchanges. Like Forex.
Farm or Farming is when people don’t invest in NFTs or buy them but use resources to create or discover new NFTs. It is similar to Mining.
Fiat represents real-world currencies like AUD, EUROS, and USD.
13- Gas Fee
Each transaction on blockchain costs a fraction of cryptocurrency. This fraction is known as Gas Fees. Each action could cost Gas Fees.
Mining is similar to Farming, but users employ ways to solve crypto problems and discover new tokens.
The process of turning an asset into an NFT is known as Minting. It is often exchanged with ‘selling’ NFTs.
16- P2E & P2P
Play-2-Earn is a famous concept in NFT game projects. It allows users to play the game and earn tokens that have real-life value in money.
On the other hand, P2pP or Peer-to-peer is when there isn’t any central exchange or hub. You directly conduct an exchange of information, assets, or NFTs with another person.
17- Reward Pool
Primarily used in NFT Games and NFT Staking. It is a collection of rewards in tokens, NFTs, drops, etc., that players can gain from a specific NFT project. Reward Pool can increase or decrease, depending on the participants.
18- Secondary Market
Each NFT Project will have a primary market. It will mostly be a built-in marketplace, like the one found in NFT games. Apart from the native market, there are marketplaces on blockchains like OpenSea, Sweet, etc.
These are all secondary markets available for use to trade NFTs.
The process in which you lock away a certain amount of tokens for a fixed amount of time. In return, you receive better rewards when they get unlocked for the users.
20- Tokens & Tokenomics
Every digital asset like Cryptocurrencies and NFTs, or digital arts, are all tokens on the blockchain.
So this one is self-explanatory. Tokenomics is economics but for tokens. The tokenomics of any NFT project shows you how the project plans on handling the inflation, flow, and regulation of the tokens in their infrastructure.
Conclusion – There Is More To Learn
So these are some of the most common NFT terms and phrases used in this space. Knowing these will help you acquire basic blockchain knowledge, fast. However, there are many concepts and abbreviations like Proof-of-Stake (PoS), MetaData, Bridge, etc, that are crucial to learn to level up in this game.
As long as the NFT space is booming, you’ll need to keep learning and adding concepts and NFT terms to your mental database. And we’ll be here to help every step of the way!