NFT Glossary

Below are some helpful phrases and definitions to help you get from noob to degen in no time.

 

-A-

 

Alpha

Alpha refers to future announcements kept in secret to avoid price manipulation. Users who somehow find “alpha” can invest early and profit the most.

Often, the NFT community are divided into those who own the NFT and those who don't (but who just follow the project). NFT owners are the first to receive announcements and aren't allowed to sell those secrets. The alpha often results in positive return of investment.

 

-B-

 

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.

 

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 and NFTs 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.

 

-C-

 

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).

 

-D-

 

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

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 an intermediary 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.

 

Degen

At Aspen, we love our degens. In fact, our Day 1 crew is known as the Degen Army. If you're interested in learning more about our community, join us in Discord

 

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. .

 

-E-

 

ERC-20

ERC-20 tokens are smart contracts created for simplicity and interoperability. This means developers can use smart contracts from other apps, which makes development easier. For traders, interoperability means you can trade ERC-20 tokens from Ethereum dApps.

 

Ether

Ether is Ethereum’s native cryptocurrency. Bidders on NFT marketplaces often purchase digital goods using ether, often abbreviated as eth. Transaction fees may differ by computational complexity, bandwidth use and storage needs.

 

Ethereum

Ethereum is the second most popular cryptocurrency after Bitcoin. At the same time, Ethereum refers to the platform that enables ether to be used for secure transactions on the blockchain.

 

-F-

 

Floor Price

The lowest NFT price in the collection, excluding bid offers, is the floor price. When someone buys the lowest NFT, it becomes unavailable until the new owner re-lists it at a new price. Then the floor price will update to the next cheapest asset. You have the best chance of selling your NFT when you sell at the floor price or below. You can price infinitely higher and still sell the NFT, but unless it's very rare, people will want the lower ones first.

 

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.

 

-G-

 

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.

 

-H-

 

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 have rebranded HODL as shorthand for “hold on for dear life.”

 

-L-

 

Layer-1 Blockchain

Layer-1 blockchains (like Bitcoin, Ethereum, and Cardano) offer the fundamental tech for basic features like transaction security, consensus algorithms, or smart contracts. Each blockchain has its infrastructure, processing speed, security, costs, and so on.

 

Layer-2 Blockchain

Layer-2 blockchains are built on top of the existing one (L1) to improve these features, primarily transaction speed and cost reduction. For example: Lightning Network is an L2 of Bitcoin, Polygon is an L2 of Ethereum, and Hydra is an L2 of Cardano. While there can be unlimited L2s, there is only one Layer-1 blockchain. For example, Ethereum has Polygon, Raiden, Loopring, and a dozen other L2s, each with its own token. And the sum of all this is what we call the Ethereum blockchain ecosystem.

 

-M-

 

Minting

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

 

-N-

 

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.

 

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.

 

Non Fungible

Non-fungible refers to stuff that’s not 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.

 

-O-

 

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.

 

-P-

 

P2E

In Play-to-Earn games, players get paid based on skill and how long they've been in the community. It allows free-to-play gamers to get paid and premium ones to leverage their money. Unlike traditional games, P2E gives real value to in-game currency and tradable items.

Once you earn NFTs or game tokens, you can swap them for Bitcoin or any other cryptocurrency, which you can then convert to fiat money. Or you can hold on to them and hope that they go up in price later.

 

PFP

Also known as avatars, profile pictures (PFPs) exploded over the last 18 months as their own category of NFT art. Bored Ape Yacht Club and CryptoPunks are well-known PFP examples. Creators use generative art to create hundreds of characters and trait combinations. Some traits may have a lower chance to appear, which make some PFPs more valuable. Each trait has a different drop chance, with the rarest ones being the most valuable.

 

-S-

 

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.

 

Shilling

Shilling is when you encourage others to buy an NFT you own for more than you paid – even if that means lying. It's not value-selling; it's an exit scam. Shilling is common among flippers, influencers, and pump-and-dump groups.

 

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.

 

-T-

 

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 facilitate 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.

 

-W-

 

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.

 

Wallet address

Your wallet address is the hash — or randomized string of letters and numbers — that you enter to send or receive cryptocurrency, cryptocurrency tokens or NFTs. 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.

 

Web 3

Web 3 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. Interested in working in Web3? We're hiring

 

Whale

Whales are entities — individuals, institutions and exchanges — that hold significant amounts of tokens of a particular cryptocurrency.

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