NFT & Web3 Key Terms
Here’s a list of key terms used in the NFT space. It’s helpful to review before you get started!
Non-Fungible Tokens (NFTs)
Non-Fungible Tokens (NFTs) are unique digital assets that were initially available on the Ethereum network and more recently on other L1 networks. NFT’s are immune to duplication while allowing them to be owned and traded between owners of digital wallets. Examples of NFTs include art, collectibles, virtual reality items, crypto domain names, ownership records for physical assets, among many others.
For further information on NFTs, see our blog post here
Blockchain
A blockchain is one example of a distributed ledger architecture that mutualizes the infrastructure to facilitate the process of recording transactions and information across a network. In simple terms you can consider a blockchain as a decentralised database.
For further information on blockchains, see our blog post here
Ethereum / ETH
The Ethereum blockchain is the most a popular blockchain for minting NFTs, and ETH is the single unit of exchange used to for transactions on the Ethereum network.
For further information on Ethereum, see our blog post here
Gas Fees
Gas fees are unique to public ledgers and are essential to incentivise the many providers of services to run and operate the networks. In the case of NFT’s, think of gas fees as a transaction charge for using the Ethereum blockchain. Gas fees vary according to demand, and are determined by the number of transactions currently being undertaken on the network (high volume, high gas fees).
For further information on gas fees, see our blog post here
Crypto Wallet
A crypto wallet has many forms. Common examples include iOS Apps, or a physical hardware device for cold storage that allows individuals to store and retrieve digital items such as cryptocurrencies and NFTs.
For further information on crypto wallets, see our blog post here
Wallet Address
Also known as your “public key,” a wallet address is your unique identifier. It is the “address” others will use when they are transacting with you and sending you cryptocurrencies or NFTs.
However, in nearly all cases (not all!) your NFTs and crypto do not technically ‘live/are held’ in your wallet but exist on public chains and are known and belong to the wallet address. Your wallet simply contains the keys to that address.
Private Key
A string of numbers (often 256 characters long) that represents your signature to authorise transactions on the network. This is your singular private identifier to ownership of the assets on the network. Never share your private key with anyone!
Seed Phrase
Your seed phrase – also known as a “mnemonic phrase” or “secret recovery phrase” – is a list of words (usually ranging from 12-24 words) that can be used to recover your crypto should you forget your password or lose access to your wallet.
You will receive or be asked to create a seed phrase to write down when you first create a crypto wallet. When you begin using your wallet, find your seed phrase and back it up somewhere safe, in multiple locations if possible.
Do not store your seed phrase on an online cloud storage service and never share it with anyone.
Collection
A collection is a body of work, like a store or gallery.
Dapp (Decentralized App)
A Dapp is a blockchain-integrated application that requires you to connect and approve all transactions with your wallet signature. Examples include OpenSea, Uniswap, and Zapper.fi.
Smart Contract
Smart contracts are pieces of code that define rules and execute transactions on blockchains. Dapps are powered by smart contracts – they underpin the buying and selling of NFTs.
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