PYMNTS Cryptocurrency Glossary: ​​NFTs | PYMNTS.com

Cryptocurrencies have many uses such as investment, as a currency for payments, as a store of value, as well as others. Like any investment, it’s important to know what you’re talking about and more importantly, what the person trying to sell you is actually saying. And like any other field of finance, industry, art or basically any human endeavour, it has its own lingo, acronyms and definitions – and especially in matters of law and finance, definitions are important.

Read More: The NFT Series: What Are NFTs and Why Are They Crypto’s Latest ‘Next Big Thing?’

In this series of articles, we will create a number of glossaries for various parts of the crypto industry, which we will combine into a larger reference tool. Today we are talking about one of the most hyped parts of the crypto world: NFT, or nonfungible token.

See also: DeFi series: How to buy an NFT in 19 easy steps

The tokens – no two are alike – can contain any type of media, including art, audio, video and documents. This means that you can put an album on an NFT, but also a bond or a deed. They also provide proof of ownership and the origin of the NFT itself.

See also: NFT series: Can NFTs be securities? The SEC says yes

They have been embraced by marketers even more than the metaverse. That’s because NFTs exist, while metaverses are mostly in the early stages of construction, at best.

Read more: What do you get when you buy an NFT? Less than you think

Another thing worth noting is that the media on an NFT is not necessarily – actually, not generally – stored on the cryptocurrency token itself – meaning the artwork, music, video, anything not written on the immutable blockchain, then it can be hugely expensive. That means it’s stored somewhere else on the internet – meaning if the wrong server or cloud goes down, the NFT can be destroyed.

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PYMNTS Cryptocurrency Glossary: ​​The Metaverse

Airdrop: Giving away cryptocurrency tokens, including NFTs, to a specific group by sending them directly to participants’ wallets – which requires an existing community such as early token buyers or existing NFT owners.

Trait: Many NFT collectibles are built on a base image—for example, of a boring monkey—with randomly selected features (fur color, accessories such as hats, clothing, facial features, etc.) called traits. Usually some are rarer than others, making them more valuable. For example, nine CryptoPunks have the “alien” trait of blue skin, 115 have a top hat, 261 have wrinkles, 961 have a cigarette, 2,459 have earrings, and 6,039 are male. The number of properties or attributes can also affect rarity. See Traits.

Avatar: A representation of yourself, this can be a profile picture (PFP) or an animated character that you control, like in a video game. In this context, an NFT avatar is a metaverse or game character. It can often be equipped with other NFTs to add items such as clothing or game pieces such as a magical sword.

See also: NFT Series: NFT’s Target Collectors Market With Avatars, Celebrities

Beeps: Digital artist Mike Winklemann. He put NFTs into the wider public on March 11, 2021, when a collage of his works, “Everydays: The First 5,000 Days” sold at auction at Christie’s for $69.3 million in ether, making Winklemann the fifth best-selling living artist, after Jasper Johns, Damien Hirst, Jeff Koons and David Hockney. Note that the owner has not received any rights to either the collage or the individual artworks it is made from. All he received was ownership of the NFT, the non-exclusive right to display it publicly, and blockchain immutability proving that it is the only genuine, original NFT of that artwork. This is why you can see the entire work on Christie’s website.

Read more: NFT series: From famous artists to forgers, the art world is embracing NFTs

Bored Ape Yacht Club (BAYC): One of the best NFT collections, the 10,000 Chained Monkeys have many features created by generative art. They often sell for hundreds of thousands of dollars, and rare ones have sold for more than $2 million. One of the reasons for its success is developer Yuga Labs’ decision to build a community with features ranging from a private Discord channel to exclusive events for owners to drops of NFTs from related collections. They also gave owners full commercial rights to NFT’s artwork, leading to things like branded marijuana lines and actor Seth Green’s in-production TV show “White Horse,” which will feature his Bored Ape as the main character — building the brand.

Burn: To destroy a cryptocurrency token, including an NFT. Despite the destructive moniker, this is usually done by sending the token to an address that no one has access to, making the private key inaccessible and the token untransferable. See PYMNTS Cryptocurrency Glossary: ​​The Basics. In the case of an NFT, the artwork may remain on the blockchain.

Collectible: Any NFT designed to be collected and displayed – not unlike baseball cards. Avatars and generative art are good examples.

CryptoKitties: The NFT collectible/game that started it all. The first breakout hit, CryptoKitties, was the first cryptocurrency to clog Ethereum badly, back in late 2017. The game basically required you to “breed” two cats to produce another. Characteristics and rarity made them highly collectable.

CryptoPunk: The most valuable NFT generative art avatar collection by individual selling price. The 8-bit pixelated punks have attributes like mohawks, dyed hair and earrings. They very rarely sell for less than $100,000, and many have sold for millions of dollars.

Disagreement: an instant messaging platform popular with NFT projects, including some (like Bored Ape Yacht Club) that have private Discord channels as a community-building tool

Loose: To liberate. Like releasing a collection of NFTs for sale on a marketplace.

ERC-721: An open source standard for an Ethereum-compatible token that is the most common used to build NFTs. An ERC-721 token is essentially an NFT.

Ethereum: No. 2 blockchain by market capitalization – and the first smart contract blockchain that gave blockchain technology the capacity to grow beyond bitcoin-like payment tokens. Like decentralized finance (DeFi), it is by far the most popular platform for NFTs. The high mintage price, blockchains and environmental concerns have made other blockchains such as Algorand, BNB Chain (formerly Binance Smart Chain), Cardano and Solana compete for the NFT business.

Also Read: Blockchain Series: What is Ethereum? The blockchain that moved crypto beyond currency

Floor price: The lowest price any NFT in a collection is sold for at the relevant time.

Fractional ownership: The ownership of an NFT can be divided into smaller parts that can be sold separately, managed via smart contracts.

Also Read: NFT Series: Tokenizing Assets Is NFTs’ Next Frontier

Pivotable: Something fungible is like any other of its kind. Any green M&M is fungible, like any bitcoin. (Sort of. While bitcoins have unique public key codes, any bitcoin is worth the same as any other.) See Non-operable.

Gas: The transaction fee on the Ethereum blockchain. Gas is denominated and paid for in Gwei. One Gwei is 0.000000001 ETH.

Generative Art: Essentially computer-generated, randomized art, usually starting with an image of some kind and adding various features. These can be attributes of an avatar collection, but the Art Blocks site allows embossing of generative art for art’s sake based on works uploaded by creators. More than 35,000 people have bought and sold $1.3 billion worth of art blocks as of August 2022.

Marketplace: In this context, a website where NFTs are minted and sold.

MetaMask: One of the most widely used and useful Ethereum wallets, it is a favorite for NFTs and can be used in the best NFT marketplaces.

Metaverse: A 3D, immersive virtual reality where people can socialize, engage in commerce, play games, view marketing and more. It’s still more of an idea than a reality, based on the dystopian cyberpunk novel “Snow Crash.”

Read more: What is a metaverse and why have a fashion show?

Mint: To create a new NFT. This includes adding media (image, video, music) or other content stored on the NFT, as well as any smart contracts (for example, royalty smart contracts could send the coiner a percentage of any subsequent sales.

Non-functional: Something that is unique, unlike anything else similar to it. Non-fungible tokens, unlike most cryptocurrencies, are not fungible – A painting is non-fungible.

Open sea: The largest marketplace for Ethereum NFTs.

PFP: Profile picture. As in, an NFT avatar collectible used as a profile picture on Twitter. Expensive and rare NFTs (such as BAYC and CryptoPunks) are used to show membership in an exclusive club. More to the point, Twitter and other sites use special frames for NFTs that indicate verified proof of ownership rather than copy-paste.

Play to earn: A controversial type of massively multiplayer online video game, these blockchain-based games use cryptocurrencies and NFTs to allow players to collect and create items that have value for other players, who buy them on exchanges. These “things” are on NFTs.

Read more: Turns out love (and other NFTs) can add excitement, pay bills, too

Rarity: In this context, a property in an NFT collection that provides an avatar value. See Trait for example. Only 78 CryptoPunks have Buck Teeth, but 696 have Hot Lipstick.

Rights: Owning an NFT is not necessarily the same as owning what is written on it. For example, an NFT of an album would give you the right to listen to the music, and probably sell the NFT (possibly with a royalty going back to the musician or studio), but not ownership of the rights to the song. See Royalties. See Beep.

Royalties: An NFT’s smart contract can be installed to automatically collect and send a percentage of any future sales to the person who owns the media on the NFT (or someone else chosen at the time of minting).

Smart contract: See PYMNTS Cryptocurrency Glossary: ​​Basics

Properties: See Trait.

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