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An airdrop is the distribution of a token or tokens directly into a digital wallet. An airdrop is free for the recipient, but the sender will typically pay a gas fee for the transaction.
A combination of the words “alternative” and “coin;” usually refers to a newer and less established cryptocurrency and designates an alternative to a more established currency like bitcoin or ether. Altcoin prices are often volatile, presenting potentially high risks and potentially high rewards to would-be investors.
Royalty payments earned by artists, which are sent to an artist’s digital wallet upon the secondary sale of one of their artworks. Artist royalty stipulations can be baked into an NFT’s smart contract or supported by a specific marketplace. Not all NFT marketplaces support artist royalties, but SuperRare has been a champion of artist royalties since day one
Artificially intelligent machines are capable of learning independently, training themselves without human input. In the context of digital art, AI most frequently refers to tools like DALL-E that utilize artificial intelligence to generate images based on prompts, retrieving information from datasets the tools are trained on.
Augmented reality (AR) is an interactive combination of the real world and virtual reality where, through the display of a camera or VR headset, users can see and interact with digital objects or images superimposed over real-world objects visible to the camera’s lens. Popular examples of augmented reality include filters on social media platforms like Snapchat, Instagram, and Tiktok. Increasingly, artists are experimenting with augmented reality, redesigning the world around us.
A bear market is a period of time in which an economic market experiences a significant decline in overall value.
The opposite of a bear market, a bull market is a period of time in which an economic market experiences a significant increase in overall value.
From “bear market:” feeling apprehensive about or uninterested in an asset, artwork, or something else, because you believe it will decrease in value. Also used colloquially in crypto culture to indicate disinterest in anything.
From “bull market:” the opposite of bearish, feeling excited and confident to invest in something because you believe it will increase in value. Also used colloquially in crypto culture to indicate a keen interest in anything.
The first implemented blockchain, established in 2009. Bitcoin is also the name of the blockchain’s native token.
A block is a record of information on a blockchain. Each block hosts a hash of the previous block, linking the blocks together in a chain. Blocks also contain transaction data and a time stamp.
A blockchain is an immutable digital ledger which is distributed across a network and, therefore, decentralized. A blockchain is literally a chain of “blocks,” which record information, connected by cryptographic hashing.
To burn a token means to remove it from the available supply of tokens. This is usually done by sending a token to a wallet without a private key. This means the wallet can receive tokens, but cannot send them, rendering the token unretrievable.
A blockchain bridge can connect two blockchains, allowing users to send tokens from one blockchain to another.
Centralization is the concentration of authority, data, or activities around a single point. For example, an organization governed by a single leader or group of leaders is a centralized organization, but an organization with no singular seat of power is a decentralized organization.
Though it sometimes refers to any piece of art that is minted as an NFT, cryptoart specifically refers to an art movement related to cryptography, blockchain, cryptocurrency, and related technologies and culture.
Cryptocurrency is a form of digital currency that is recorded and validated by a blockchain, and can be exchanged peer-to-peer without an intermediary like a bank. A cryptocurrency is the native asset of a blockchain.
Cryptography is the study of secure ways to communicate. Historically, cryptography has been rooted in written codes and ciphers, but in the age of technology, the field involves advanced mathematics and computer science. Blockchain is a cryptographic technology.
Collector royalties are monetary royalties received by a previous collector of a piece of art upon secondary sale of the artwork. They act as incentive for collectors to participate in digital art communities. Not all NFT platforms support collector royalties.
A cold wallet is a physical device that hosts a digital wallet and allows cryptocurrency and NFTs to be held offline. Cold wallets are considered the most secure way to store your crypto assets, as they are more challenging for hackers to access than traditional digital wallets, or hot wallets.
A consensus mechanism is a process that verifies transactions on a blockchain and ensures a blockchain’s overall security.
Consensus is what must be achieved for a block of data on a blockchain to be verified. A node, or a device like a computer or server in a blockchain network whose purpose is to verify transactions, must agree with other nodes in the network that a transaction is valid. If all nodes agree, they reach a consensus, and the block is added to the blockchain.
Cypherpunk is a movement among cryptographers, mathematicians, and computer scientists that began in the 1980s. Originally communicating through an email list (archived here), cypherpunks were concerned with protecting security and personal privacy through digital means. The origins of blockchain technology are based in this movement.
A DAO, or a Decentralized Autonomous Organization, is an organization with no centralized leadership that is collectively owned and governed. DAOs are built on a blockchain, with proposal and voting mechanisms coded into them. Everything a DAO does is included in a transparent, on-chain record. DAOs are seen as a means of governing an organization more democratically and without a centralized seat of power, and some hope that, because of the on-chain visibility, DAOs can also help mitigate organizational corruption.
A dApp, or a decentralized application, is an application built on a decentralized network like a blockchain.
The opposite of centralization, decentralization is the spread of authority, data, or activities over a distributed network with no single seat of authority or operations. A blockchain is a decentralized network because its data is spread among many different devices instead of being concentrated on a single device.
A decentralized exchange, or DEX, is a marketplace for buying, selling, and trading cryptocurrency. A decentralized exchange is peer-to-peer, meaning all transitions are performed directly and without the facilitation of a third party. Instead, the transactions are enabled by smart contract.
DeFi, or decentralized finance, refers to financial services that exist outside the purview of centralized institutions like banks. DeFi technologies are built on blockchain and use cryptocurrency.
Digital art is any art produced using computers, software, or other digital technology.
DYOR, or Do Your Own Research, is a common disclaimer in crypto communities. Since crypto is largely unregulated, you should perform research and use your best judgment before making decisions related to NFTs and cryptocurrency.
Ethereum is a blockchain that was implemented in 2015. It was developed for the purpose of building applications, and due to its native support for smart contracts, it has become one of the most popular blockchains for NFTs.
The Ethereum Merge was an event that occurred in September 2022, in which Ethereum, a proof of work blockchain, merged with a separate proof of stake blockchain, the Beacon Chain, to become a proof of stake blockchain. The Merge reduced Ethereum’s energy consumption by 99%.
The standard fungible token contract on Ethereum.
The standard non-fungible token contract on Ethereum.
A token standard on Ethereum that can govern fungible or non-fungible tokens.
A currency issued by a government. USD, for example, is a fiat currency.
In an NFT collection, a floor price is the lowest price a token in that collection can be bought at.
In blockchain, a fork is a split in the blockchain, similar to the idea of a fork in a road. Forks usually occur when the rules of a blockchain change. This may be due to a disagreement between blockchain maintainers, resulting in a second (forked) chain operating under the new rules, or due to the integration of new features to the chain at the protocol level. Forks can be “soft,” when changes are backwards compatible with the old chain, or “hard,” when they are not.
A fungible token is a token that is interchangeable with any other token. 1 ETH is always interchangeable with any other 1 ETH, in the same way, a one-dollar bill is always interchangeable with another one-dollar bill. 1 ETH and another ETH hold the same information and the same value.
A gas fee, or sometimes just gas, refers to the cost of a transaction on a blockchain. Even if you are not buying something, a transaction – like placing an auction bid for a piece of art – may still cost gas. Gas fees reward miners for working to record the transaction on the blockchain, and fluctuate based on how busy a network is; the busier the network, the higher the fee.
Generative art is any piece of art created with the assistance of an autonomous system. Generative art has existed for decades but has recently seen a surge in popularity due to the accessibility of computers and education around coding. Generative art is often created using algorithms, but it can also be created using other systems.
A Gwei is one billionth of one ETH. It’s useful for assuring high precision in transferring small amounts of ETH, like gas fees.
Hashing is any method that uses a cryptographic function to map data of arbitrary size into a set of characters of a fixed size, not only securing that data through encryption, but also rendering it more efficient to store. A hash is the resulting set of characters.
A hashrate is the number of hashing calculations that can be performed per second.
A hot wallet is a digital wallet that exists online. Examples of a hot wallet include Metamask. Hot wallets are more susceptible to hacking than cold wallets, which exist offline.
Initial coin offerings, or ICOs, are token offerings used to fundraise. Similar to a stock IPO, ICO investors will purchase coins, hoping for an eventual return on investment.
Intellectual property, or IP, designates ownership over a creative work instead of a physical object. For example, an individual might physically own a copy of a book, but an author or publisher might own the rights to the contents of the book.
The ease and speed with which an asset can be converted into cash. An NFT’s liquidity is based partially on elements like market cap and market volume.
A liquidity pool allows users to buy and sell cryptocurrency on a decentralized exchange. Collections of different tokens are locked together by a smart contract, providing liquidity across tokens of varying stability and availability. The locked tokens are provided by users called liquidity providers, who in return earn trading fees from the exchanges that happen in their pool.
Short for Main Network, it is the primary network upon which a blockchain functions. Alternatives to main networks are often testing networks, or testnets.
Short for market capitalization, market cap is the total value of all the fungible tokens that have been minted on a particular blockchain.
A mempool is a waitlist where transactions are stored before they are added to a new block on the blockchain.
A metaverse is an immersive virtual world that can be experienced through virtual reality headsets. Sometimes metaverse refers collectively to all immersive virtual reality experiences and platforms and is written as “the metaverse,” but sometimes it can refer to an individual metaverse, like Decentraland.
Mining is the process through which node operators validate blocks on a proof of work blockchain and are rewarded with cryptocurrency for their work.
Minting is the process through which new tokens are created. Both fungible and non-fungible tokens can be minted.
Nodes are what make a blockchain decentralized. Blockchain data is generally spread across two types of nodes: Full nodes, which maintain a copy of all the data on a blockchain, and light nodes, which only store the data necessary to verify transactions. After miners do the work of validating blocks, those blocks are recorded on the chain’s nodes.
A non-fungible token, or an NFT, is the opposite of a fungible token. While one fungible token is interchangeable with another, a non-fungible token contains data that makes it entirely unique (for instance, data like a digital artwork). These tokens are able to be distinguished from fungible tokens because they are governed by smart contracts and, given their unique data, can have radically different market values, even if minted on the same contract. No two non-fungible tokens are the same.
Something that occurs outside, and is not recorded on, a blockchain network.
Something that occurs within, and is recorded on, a blockchain network.
Peer-to-peer, or P2P, refers to a direct exchange between parties, with no intermediate facilitator.
Profile Picture. Many collectible NFT projects are PFPs, and they may be referred to as PFP projects, like CryptoPunks or Bored Apes
A POAP, or Proof Of Attendance Protocol, is an NFT given to commemorate attendance at events or for participating in something.
A private key is a feature of a digital wallet that comes from cryptography. It is an encryption tool that allows only the holder of a wallet to spend or transfer tokens from that wallet, and proves ownership over that wallet. Depending on the digital wallet, a private key may consist of binary code, hexadecimal code, or a phrase composed of random words, often called a seed phrase. Private keys are often hashed. You should never reveal your private key, as anyone who knows your private key will have access to the tokens in your wallet.
A public key is how a digital wallet receives transactions. It is paired with a private key. Most digital wallets use a shortened version of a public key, called a wallet address, to receive transactions. Sometimes, wallet address and public key are used interchangeably. For those familiar with computer security, a blockchain public key can be seen as similar in form and function to an SSH public key.
Proof of history is a consensus mechanism that determines the passage of time based on relation to events.
Proof of stake is a consensus mechanism that reduces the computations needed to validate blocks and uses less energy than proof of work consensus mechanisms. The node operators stake tokens, meaning they use them as collateral, for the opportunity to validate blocks. Validators are selected at random to validate a block, and if a validator is selected, they receive tokens in exchange. This is in contrast to the competitive, and energy expensive, nature of mining on a proof of work blockchain.
Proof of work is a consensus mechanism in which nodes compete to solve cryptographic equations. The node who does it first wins the ability to add a block to the chain and receives tokens in return. While proof of work has some security advantages, it also uses an incredible amount of energy.
A protocol is a general set of rules, or common language, that permits data to be shared between devices or networks. The most well known protocol isn’t a blockchain protocol. It’s HTTP, which creates a common language used by servers, routers and computers to send and receive web pages.
A pump and dump is a scheme in which an asset’s value is artificially inflated, or pumped. At the peak of that artificially inflated value, the organizers of the scheme will then dump their assets, profit, and watch the value of those assets plummet. In traditional finance, this is considered a form of fraud, but since digital tokens are largely unregulated, it’s important to stay vigilant.
In NFT art, a reserve auction is a timed auction that begins when a minimum price set by the auctioning party, or a reserve price, is met by a bid.
A rug pull, taken from the concept of having the rug pulled out from underneath you, refers to a type of scam in which the creators of an NFT project, usually NFT collectibles like PFPs, promise a completed project, take funds from investors, and then abandon the project, often withdrawing its liquidity, before delivering what they claimed they would. If someone was the victim of a rug pull, they may say they “got rugged.”
A Rollup combines a group of transactions and transforms them into a single point of data, taking up less space on-chain and therefore making a blockchain work more efficiently.
Named after the anonymous founder of Bitcoin, a satoshi is the smallest unit of bitcoin. One bitcoin is one hundred million satoshi.
In NFT art, a scheduled auction is an auction scheduled to happen at a certain time. The duration depends on the platform, but typically they run for 24 hours.
A phrase of randomized words that, when run through a function, generate the unique private key used to access a digital wallet. Anyone with a wallet’s seed phrase can use the contents of that wallet however they want. Never give away your seed phrase, or you will put yourself at risk of losing your tokens.
Sharding is a method of dividing a blockchain network into smaller networks and spreading out the workload of the whole chain, helping a blockchain run more efficiently.
A sidechain is a blockchain that connects to a larger parent blockchain. Sidechains are essential for a blockchain to change and adapt over time.
A smart contract is a piece of code on a blockchain that runs when specified conditions are met. They are essential in the removal of middlemen from complex, on-chain transactions.
Solidity is the programming language used to write Ethereum smart contracts. It is then compiled into bytecode for deployment on the blockchain.
Solana is a hybrid proof of stake and proof of history blockchain founded in 2020. It has become a popular blockchain for NFTs.
A stablecoin is a cryptocurrency with a stable price. This is achieved by pegging the value of a cryptocurrency to a real world asset like gold or the US dollar.
Staking is a way of earning a percentage rate reward over time by putting tokens up as collateral. Typically, staking is used to validate blocks in a proof of stake blockchain network, but the concept has expanded to staking in projects, NFTs, and artists.
Tezos is a liquid proof of stake blockchain implemented in 2018. It has become a popular blockchain for NFT art.
A token is a digital asset built on a blockchain. Some tokens are cryptocurrencies, but some are not. Some are fungible and some are non-fungible.
A testnet, short for test network, is a network on a blockchain that allows for testing and developing applications and updates without risking any assets that are actually on-chain.
On a blockchain, a transaction is any exchange of value.
Web1 is the first iteration of the World Wide Web and can be chronologically characterized as the web before the advent of social media. It resulted from the widespread adoption of the HTTP protocol, and lasted from approximately the founding of the internet to the founding of MySpace.
Web2 is the second iteration of the World Wide Web, defined by the rise of social media, smartphones, and the commodification of data. Web2 lasted approximately from the founding of Myspace to the present day. A key hallmark of Web2 is its reliance on centralized corporations to store and leverage user data in support of complex user experiences.
Web3 is a third and emerging iteration of the internet. It is decentralized and built on blockchains. Unlike the technological differences between Web1 and Web2, which are comparably minimal and reflect more advanced developments over the passage of time, Web3 relies on new radically different underlying protocols that enable the complex and transparent exchanges of data and money through decentralized blockchain networks (token economics) in lieu of Web2’s reliance on centralized corporations. Its rise reflects growing concerns around issues of user privacy and sovereignty.
Wei is the smallest unit of ether. One ether equals one quintillion wei.