A dictionary of NFT terminologies — NFT terms that you should know
In the context of this article, we have tried to gather all the terms related to NFTs. As NFT is on its hype, why don’t we have an eye on its terminologies?
Alchemy is a middleware that makes blockchain communication easier for developers. Alchemy offers node providers as well as APIs to communicate with the blockchain.
Blockchain is a decentralized digital ledger that logs every transaction in a way that it can’t be tampered with or changed. Blockchain can be described as a collection of records that are linked with each other and protected by cryptography. Everyone on the blockchain network has a copy of the ledger. Thus, no single person can make changes in the ledger as everyone else will flag this as invalid.
Burning an NFT
An NFT can’t be deleted but can be burned. Burning is essentially when an individual destroys their NFT token and renders them useless. Burning an NFT is meant by sending the NFT to an inaccessible address so that it removed from the circulation. This process of burning is irreversible. Normally burning is carried out to control the supply of NFTs which inturn increase its demand in marketplace.
Cryptocurrencies are a form of digital or virtual currency that runs on blockchain technology. They are immune to counterfeiting. They don’t require a central authority and are protected by strong and complex encryption algorithms. Bitcoin, Litecoin, and Ethereum are the most common cryptocurrencies that are available.
Software that holds private and public keys for cryptocurrency transactions. They never store actual coins or tokens. A public key is a wallet address in the form of a cryptographic code, which can be shared to receive cryptocurrency. A private key is very confidential to you as it is used to authorize any transaction through your wallet.
There are 3 types of crypto wallets:
- Exchange based software wallets — wallets inbuilt within a centralized exchange like Vauld and CoinDCX.
- Hardware wallets — access crypto holdings only by connecting USB to a computer physically. eg: Ledger, Trezor
- Browser based software wallets — which we can control, install on our system and keep the private key. They are the gateway to the world of Web3.0 and NFTs. eg: Metamask, Coinbase and Trust wallets
Dapps stand for Decentralized applications. They are applications based on smart contract networks like Ethereum blockchains. The entire operations are stored on a blockchain and are open source so that other people can access it.
Decentralization is the process of putting trust into the hands of a group of people instead of a single centralized entity and the entire group will keep track of your transactions.
Discord is a digital platform where you can belong to a worldwide art community. They are organized into different topic based channels where you can collaborate and share.
ERC-721 & ERC-1155
ERC stands for Ethereum Request for Comment. ERC-721 & ERC-1155 are the two most common token standards used in crypto industry.
ERC-721 is the first standardized interface for creating NFTs. It contains a set of rules for NFTs defining them as a way to identify something uniquely. It is based on deploying a separate smart contract for every token type or collection.
ERC-1155 is a unique token that supports both non-fungible and fungible tokens. It can use a single contract to make various types of NFTs.
The abbreviation for the cryptocurrency, Ether.
Ether is the fuel for the Ethereum blockchain. The native cryptocurrency for the Ethereum platform.
Ethereum is an open-ended decentralized blockchain-based public software platform that facilitates smart contracts and decentralized applications known as dapps.
Ethers.js is a library that allows us to interact with the Ethereum blockchain.
Etherscan is the most widely used blockchain explorer for Ethereum where we can view all the transactions made. We can search for the address or transaction hash and it will show information like ETH balance, transaction fee, gas fee, and the total number of transactions made to and from the address.
EVM stands for Ethereum Virtual Machine. It is the software that run by computers around the world to carry out our smart contracts.
Ganache is a blockchain simulator that can be set up locally. The dapps can be developed, tested, and deployed via Ganache.
Gas refers to the fee required to successfully conduct a transaction on the Ethereum blockchain. It is required to buy or sell NFTs, place bids, and transfer NFTs to a different wallet. Usually denominated in GWei.
Gas Limit refers to the maximum amount of Gas spend in a transaction.
Gas Price refers to the amount of GWei that the user is willing to spend on each unit of Gas.
GWei is one of the Ether units and is stands for GigaWei. GWei is commonly used for tracking transaction costs on the Ethereum blockchain.
1GWei = 10⁹ Wei = 1ETH/10⁹
Hardhat is a framework for smart contract with which we can compile, deploy, test, and debug our smart contracts.
IPFS stands for InterPlanetary File System. It is a peer-to-peer protocol like a torrent. It decentralizes the entire file hosting process. Files can be stored and shared across multiple nodes and every node becomes a server so that no one can take down a file.
A method for creating NFTs that avoids gas fees.
Like ETH in Ethereum, MATIC is the native token in the Polygon network.
Mempool is a staging area for unconfirmed transactions in the node software. It is essentially a waiting room for transactions before they are validated and copied to the rest of the nodes on a blockchain. Mempool size depends on the blockchain and its activity. Larger the mempool size, the higher the network use and the longer the wait time.
Metadata is essentially the information about data. Metadata of an NFT is simply the attributes of an NFT like name, description, and image.
Minting is the process of placing an NFT into the blockchain for the first time. Minting is bounded by a transaction fee.
Moralis provides the easiest and simplest way of connecting to cross-chains. It is a software or a middleware which helps us to build cross-chain dapps quickly. Using moralis, we can build and deploy our dapps on any blockchain like Ethereum, Polygon, Solana, BSC, and Avalanche. Moralis also provides APIs and Speedy Nodes to connect with the chains.
NFT is a digital asset that represents a piece of art. What makes an NFT unique is its digital signature created by blockchain technology. It defines the ownership of an asset that can be bought and sold for real money or cryptocurrencies. NFTs are not interchangeable as it represents unique assets owned by a specific person.
A digital platform where we can buy or sell NFTs. OpenSea, Rarible, and Mintable.app are the common marketplaces.
OpenSea is the largest and the common NFT marketplace everyone uses to trade their NFTs.
Pinata is an interface of IPFS which makes it easier to host files on IPFS. We can upload files and JSON metadata.
Polygon is simply a sidechain to Ethereum. It is a Layer-two(L2) scaling platform that offers low transaction fees, higher throughput, and better options to Ethereum users.
Polygonscan is similar to Etherscan for Ethereum where we could verify the transactions, wallet balances and all token information.
Like OpenSea, Rarible is an Ethereum-based marketplace where we can buy or sell our NFTs.
Remix is a web IDE that can be used to write, deploy and test smart contracts. Blockchain beginners can easily start coding in Solidity with Remix IDE.
Royalties are the percentage that a creator of an NFT gets from secondary market sales. Secondary markets are the markets that buy the NFTs after it is been bought once. Whenever the NFTs get resold, the creator of that NFT will get a percentage.
Smart Contracts allow users to exchange values without requiring intermediaries. They are agreements with defined terms and protocols to enforce them. Unlike traditional contracts which are written in human languages, smart contracts are written in code that a computer can execute.
Solidity is a programming language for writing smart contracts.
Truffle is one of the most popular frameworks for writing, deploying, and testing smart contracts. It supports EVM blockchains such as Ethereum, Polygon, and Binance Smart Chain.
Web3.js is a library for interacting with Ethereum blockchain.
Wei is also one of the Ether units and is the lowest denomination of Ether.
1Wei = 1 ETH/10¹⁸
The abbreviation for the cryptocurrency, Wrapped Ethereum. It can be used to make pre-authorized bids that can be fulfilled in a later date. ETH and WETH can have the same value and can be converted between each other.