You’ve definitely heard of Non-fungible Tokens, or NFTs – a whole world of that includes a new technology (blockchain), new artists (crypto artists), a new audience (crypto holders), and a new set of actors (NFT marketplaces, wallets, exchanges).
Bought and sold online, frequently with cryptocurrency, an NFT is a digital asset representing real-world objects like art, music, in-game items, and videos. They’re generally encoded with the same underlying software as many cryptocurrencies, and most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency (it’s the second largest after Bitcoin), but its blockchain can store extra information to support NFTs (other blockchains can also implement their own versions of NFTs).
However, most NFTs aren’t original artwork that’s stored on the blockchain, it’s the link to it.
Although they’ve been around since 2014, NFTs are gaining notoriety now as an increasingly popular way to buy and sell digital artwork because they’re generally one of a kind, or at least one of a very limited run, and have unique identifying codes.
The basics
Naturally, there’s a new vocabulary attached to this new world. If you’re seeing NFT chatter (or just bunch of avatars in profile pics) on your social media timeline and are confused by the lingo, here’s a basic NFT glossary.
NFT (non-fungible token): certification of uniqueness stored on the blockchain that can represent any digital (photos, videos, gaming skin, etc.) or physical (eg. concert ticket) good. Its history of transactions and owners are recorded on the blockchain. It’s the opposite to fungible tokens that are all interchangeable, such as currencies or stocks.
Non-fungible: unique (eg. a Snickers bar is fungible because all bars are exactly the same, but a cake you bake is non-fungible)
ERC721: preferred token technical standard on Ethereum used for NFTs, like modified ERC20 (Cryptopunks) or ERC1155, and probably many more to come
Gas: a fee required to successfully complete a transaction on Ethereum (like buying an NFT, sending an NFT to a friend, exchanging currencies, etc.); this includes creating (or minting) an NFT for crypto artists. It’s similar to credit card processing fees or taxes, as you pay for the ability to transact. Gas fees fluctuate based on the number of transactions queued and can vary from a few dollars to a few hundreds
Gas wars: when an NFT project is hot and too many people want to buy it, they’ll increase their gas bid to be prioritised in the transaction execution line and increase their chances. If a lot of people do that then suddenly the gas fee is not the already high $30-60, but $1,000-$3,000. Ironically, projects are sold unrevealed so buyers don’t even know exactly which NFT they’re going to get
Gwei: gwei is to ethereum what cents are to dollars: 1 ethereum = 1 billion gwei. NFT prices are expressed in eth (eg. 0.2 eth) while gas is in gwei (eg. 90 gwei)
Floor: how much it costs to buy the cheapest NFT in a given collection that’s available for sale; it’s like concert tickets sorted by price, and the cheapest is a $60 nosebleed seat = $60 is the floor
To mint: to create an NFT (eg. you create art => mint the art as NFT => that photo NFT is now a tradeable asset). “Minting an NFT” is a synonym for “creating an NFT.” When an artist mints an NFT, it means their digital art is uploaded to the blockchain. It comes from the time when metal coins were minted and added into circulation
There’s also Lazy Minting which allows you to create a digital work on some NFT marketplaces, like Opensea, without uploading it to the blockchain. In this case, the work is saved locally on the marketplace servers and becomes an actual NFT when it’s purchased. This allows creators to list digital artworks on marketplaces without paying the gas fees associated with the minting. Gas fees are paid later when the work is purchased
The lingo
pfp (profile picture): a type of NFT designed to be used as social media avatar (liked Bored Apes, Gutter Cats, etc.). They tend to be dropped in collections — think of of it as a 10,000 member family where each member is unique but shares a last name
Whale: someone holding a lot of crypto-currency with the power to influence the market. This is why NFTs using the theme of a whale (the animal) are so popular. The $WHALE project refers to the
person who started it (anonymously because they’re a Whale in the market)
Dankness: being cool, awesome, unique (comes from the meme culture: a dank meme is an exceptionally rare or off image gone viral as a gif most of the time)
NFT Marketplace: blockchain-based marketplaces displaying and trading NFTs. Open platform examples are Opensea, Zora and Rarible. Invitation-only platforms include SuperRare, Knownorigin, Nifty Gateway.
OS refers to OpenSea, the largest marketplace of NFTs. It’s like eBay for NFTs — you can find any NFTs there, from art to avatars to gaming assets, so there’s not a lot of specialisation
Open editions: editions of NFTs in which quantity is defined by variables not configured by the collector. For example, an NFT drop limited to 30 minutes may result in 50 or 300 generated editions (subject to public interest)
Weak hands / paper hands: people who sell their NFTs too early (maybe they believed the FUD) and miss out on profit (or even sell at a loss)
Airdrop: a free NFT that appears in your wallet. Sometimes you get a valuable NFT for free (eg. as a reward for holding a certain NFT) or you can get NFT spam (eg. a worthless marketing NFT)
Actions
To ape in: to buy into a new coin or NFT project; when after months of research & debating you finally buy your first Tesla, you “ape” into the Tesla
Breeding: a process of creating a new NFT out of an existing one (if the project allows for it). For example, the NFT game Zed Run allows you to take your NFT horses and “breed” them to create new (inferior) NFT horses
Pumping: price is going up, a lot, fast; an NFT project can start pumping seemingly out of nowhere, but more frequently someone with a lot of followers (eg. Gary Vee) tweets about it and increased demand drives price increases
Burning: destroying your NFT to decrease supply, thus increasing the price of remaining relevant NFTs
Sniping: getting a great deal (ie. buying what one perceives to be an undervalued NFT)
Sweeping the floor: buying all the NFTs in a project that are available at floor price because either a big buyer believes in the project or there’s momentum and different buyers buy up the cheapest supply because everyone wants it so it sells out
Rug pull: fraud, when NFT project developers abandon it and run away with the money (similar to the Squid Game crypto)
Acronyms
FUD: fear, uncertainty, and doubt; can be a noun (“that’s fud talking”), adjective (“that’s a fud price”) or a verb (“they fud the project”). Big crypto influencers on Twitter who fud (ie. say negative things about an NFT project) is bad for that NFT momentum and can tank it
NFA (Not Financial Advice): NFTs are a risky, volatile gamem and many projects are hyper speculative so when you ask others for NFT advice, they’ll share but caveat as “NFA” because no one wants to be blamed if you lose money
NGMI (Not Going to Make It): missing out on an opportunity to make money. It’s basically when fear > greed and you sell at a loss or don’t participate in a lucrative project
WGMI (We’re Going to Make It): the opposite of NGMI, a rallying cry of the NFT community when either a project rapidly rises in value (and people are making money), or when the community reinforces its belief in NFTs/crypto riches
HODL: to hold (ie. not sell) your coins/NFTs (especially as prices wildly fluctuate!). Comes from “Hold On for Deal Life” and is a common lingo in the crypto space
DYOR (Do Your Own Research): an important concept especially in this hype-driven world; you should DYOR whether investing (like you would before buying stock) or collecting (like when trying to buy art or streetwear)
