NFT Slang: Everything to Know
By Beluga Research September 24, 2023
- Cryptocurrency non-fungible token (NFT) slang is the specialized vocabulary and acronyms used within the NFT community and ecosystem
- NFT slang includes terms such as minting, gas fees, rarity, royalties, profile pictures (PFPs) and whitelisting
- Crypto investors tend to use NFT slang as shorthand to describe certain actions and foster a sense of community
- NFT slang helps users discuss topics common to NFT communities, including verifying authenticity and interoperability
Cryptocurrency non fungible token (NFT) slang is the specialized vocabulary and acronyms used within the NFT community and ecosystem. Users educate themselves on NFT slang to communicate with one another and drive the adoption of NFTs. Many terms in NFT slang are borrowed from the art world, the traditional finance world and the crypto ecosystem. This is because NFTs are unique pieces of art and crypto assets.
A Brief History
NFTs emerged with the release of CryptoKitties in 2017. This collectible game, built on the Ethereum blockchain, allowed users to buy, sell and breed unique virtual cats. The popularity of CryptoKitties showcased the potential of NFTs. Yet it also increased congestion on the Ethereum network.
Since then, the NFT market has grown significantly, with artists, creators and collectors embracing the technology. High-profile NFT sales and the emergence of various NFT marketplaces have propelled the market and its unique slang.
NFT Slang: Everything You Need to Know
- Minting. Minting refers to the process of creating a new NFT. Artists or creators tokenize their digital assets by uploading them to a blockchain. This involves specifying metadata such as the asset's name, description and unique attributes. Minting usually entails uploading the digital asset to an NFT marketplace, defining its properties and paying a fee. Once minted, the NFT becomes part of the blockchain and can be bought, sold, or traded.
- Gas Fees. Gas fees are transaction fees paid to execute operations on a blockchain. In the context of NFTs, gas fees are relevant during minting, buying, selling and trading. Users pay gas fees in ether (ETH) to interact with smart contracts and complete transactions. Fees vary based on network congestion and operation complexity. The fees are paid to miners who process and validate transactions on the blockchain.
- Wallet. A wallet is a digital tool for storing, managing, and interacting with cryptocurrencies and NFTs. Users need a compatible wallet to connect to marketplaces, view collections and initiate transactions. Wallets can be custodial (third-party holds keys) or non-custodial (user retains control).
- Royalties. Royalties enable creators to earn ongoing income from future NFT sales. When artists enable royalties, they receive a percentage of the sale price. They get the money whenever the current owner resells the NFT in the secondary market. This encourages artists to create more work.
- Rarity. Rarity refers to the uniqueness or scarcity of an NFT. It is one of the factors that determines the value of an NFT. Rarity can be based on limited supply, exclusive editions or distinctive traits. Metrics such as rarity scores or tiers help collectors assess an NFT's relative scarcity. Typically, scarce items by notable artists command higher prices.
- PFP. A holder of a PFP can use the image as an identifying image on their social media profiles. The use of NFTs as avatars allows users to express themselves. Further, it allows them to identify with particular groups, notably other holders of the same type of NFT. PFPs have become a status symbol within the cryptocurrency community. There are trends that involve collecting and displaying rare and sought-after PFPs. This means certain PFPs command especially high prices.
- Floor Price. The floor price is the lowest price at which an NFT can be purchased in a marketplace or collection. It indicates the overall value and market demand of an NFT collection. An NFT's floor price fluctuates based on supply, demand and other factors.
- Whitelisting. Whitelisting grants exclusive access to purchase or participate in the sale of a particular NFT or collection. Projects often use whitelisting to reward loyal community members or manage demand for highly anticipated releases. Being whitelisted typically involves meeting specific criteria or following instructions outlined by the project or platform.
- Internal and external web forums. Users can familiarize themselves with NFT slang on the website of the platform offering on the NFT as well as in web forums relating to NFTs.
- The crypto ecosystem encourages the use and spread of NFT slang. NFTs are relatively easy to acquire. They usually do not require getting access to a broker as would traditional artwork. This means NFT slang is likely to be widely used even in forums and on sites that do not relate to NFTs. Further, the crypto ecosystem generally encourages users to become familiar with NFTs.
- Relationship with cryptocurrencies and digital wallets. Some NFT terms relate to cryptocurrencies and digital wallets. This is because users typically acquire NFTs with cryptocurrencies and store NFTs in digital wallets.
- NFT slang draws from a variety of sources. NFT slang relates to art, traditional finance and the crypto ecosystem. Users in this space are also creative and come up with their own terms.
- Some NFT slang relates to how the piece can be displayed, utilized and modified. NFTs are often "in motion," meaning they are not static like some physical pieces of art. Some NFTs are snippets of video or music. They can be modified, such as having filters applied to them. NFTs may also be "accessorized" with other NFTs or add-ons to NFTs.
- Borrow from the slang of certain demographics. NFTs that are acquired by new demographics, like Gen Z, may be described in terms relating to that generation's slang.
- Accessible Ownership. NFTs allow easy ownership and transfer of digital assets such as artwork, music and videos. This accessibility democratizes ownership in the digital realm.
- Authenticity Verification. NFTs use blockchain technology to prove ownership and authenticity. This ensures uniqueness and prevents duplication or tampering.
- Creative Expression. NFTs provide new avenues for artists to showcase and monetize their work directly to their audience. The artists bypass intermediaries such as brokers and agents.
- Royalties and Residual Income. Smart contracts embedded in NFTs enable creators to receive royalties when their digital assets are resold. This ensures reliable and viable ongoing revenue streams.
- Fractional Ownership. NFTs can be divided into smaller fractions. This allows multiple individuals to own a portion of a valuable digital asset. Such a model expands investment opportunities.
- Interoperability. Some platforms allow NFTs to be used, traded or showcased on other compatible platforms. This expands the reach and potential audiences for NFTs.
- Community Engagement. NFT communities foster vibrant ecosystems where collectors, creators and enthusiasts collaborate and support one another.
- Environmental Impact. The energy consumption of blockchain networks, especially those using proof-of-work (PoW) consensus algorithms, raises concerns about the environmental impact of NFTs.
- Market Volatility. NFT values can be highly volatile. They expose investors and collectors to financial risks and uncertainties because of the nascent and evolving NFT market.
- Copyright and Intellectual Property Concerns. The ease of creating and selling NFTs has raised questions about copyright infringement and intellectual property rights.
- Scalability and Network Congestion. The popularity of NFTs has caused scalability issues and network congestion. This has led to increased fees and slower transactions.
- Lack of Regulation and Investor Protection. The NFT market operates with limited regulation. This exposes investors to scams, fraud and market manipulation.
- Potential Bubble and Speculative Behavior. Some argue that the NFT market is experiencing a speculative bubble driven by hype rather than intrinsic value. A significant decrease in the value of NFTs could lead to dramatic price corrections.
- Complexity and Technical Barriers. The NFT space can be complex and intimidating for newcomers. Barriers include wallet management and the time and effort it takes to understand blockchain technology.