If you’re reading this article, chances are you’ve successfully avoided engaging with any crypto-related content to this point—which, congrats, that’s an achievement. Or maybe you’ve started to dip a toe into the crypto world, but you were left more confused than when you started. Whatever brings you here, first things first: Welcome! (Or you could say “GM,” which means good morning in crypto-speak and functions as a general salutation.)
Like it or not, crypto is here to stay. The same technology that enables cryptocurrencies like Bitcoin and Ethereum is what powers NFTs, or non-fungible tokens, which can be bought and sold using cryptocurrency. When an artist named Beeple sold one for $69 million last March at Christie’s, and you may have asked yourself, “But isn’t it just a picture?”
By now, you’re probably aware that NFTs are not just jpegs (and a mint is not just what you eat after a meal). To put it simply, NFTs are a type of digital asset. The image attached to them is less important than the underlying code, or smart contract. The smart contract is what gives the NFT utility. In some cases, that utility is just proof of ownership of the image; in others, it can act as a membership pass to a community. All of this data is stored on the blockchain, which serves as a record of all transactions. NFTs can be minted on different blockchains (such as Ethereum, Solana, or Flow), and because of the way transactions are verified, blockchains are secure. It’s helpful to have a general familiarity with some of the technical concepts, but don’t worry too much about understanding how they work.
In any case, NFTs have taken the art world by storm. The overall market for NFTs ballooned to more than $17 billion in 2021, Damien Hirst and Tom Sachs have launched NFT projects, and besides auction houses, galleries like Pace, Jack Hanley, and Galerie Koenig have all hopped on the trend. As of right now, the only two crypto-native artists who have come close to breaking into the mainstream are Beeple (of Christie’s fame) and Pak. Pak is an anonymous artist (or collective, we’re not sure) who released an NFT collection that arguably could be the most expensive artwork ever created. Or it could just be a collection of NFTs.
If you’re ready to learn more, the following glossary of terms should provide a helpful starting point for understanding the crypto and NFT space. The amount of slang can be overwhelming, and the following are terms you may come across on various platforms. And a disclaimer: There are solid arguments to be made for why crypto is bad environmentally, financially, and sociologically. There are also solid arguments to be made for why crypto is good, chief among them that it provides a way for artists to take control of royalties. The sale of NFTs allows for rapid funding of creative projects, enables easy community-building, and brings people together around a shared goal.
So what to make of all this? Well, it’s up to you to DYOR (do your own research –– another acronym you may come across that essentially means “proceed at your own risk”). Here are a few terms to help you get started.
Like the iPhone kind, but with crypto. The same way a file can be “airdropped” between iPhones, NFTs can be airdropped between crypto wallets. It’s usually a boon, used in the context of an NFT project that is airdropping additional NFTs or tokens to existing holders as a reward for loyalty, or an incentive to engage further.
NFT drops can be competitive, so some projects will create an “allowlist” (also known as a whitelist, though that term is now used less frequently due to its problematic roots), which means you are able to mint ahead of the public. Some allowlists are harder to get on than others. They can require tasks like engaging with a project’s Twitter account and Discord or playing games in the metaverse.
Decentralized autonomous organization, pronounced “dow.” Think of it like a company that IPOs before it’s built, and anyone can buy a seat on the board. In theory, they’re completely automated companies that run on decisions made by people and executed by code; in reality, they function more like a group chat with a shared wallet. Some NFTs act as membership passes, meaning that in order to join, you have to buy the NFT. NFTs can also function as a governance tokens that allow you to vote on decisions related to the DAO. The sales of the NFTs in turn fund the activities of the DAO. Each DAO has a different goal. Some, like VectorDAO, function as community-run studios; another tried to buy the U.S. Constitution last year at Sotheby’s.
A messaging app, similar to Slack, used by many crypto projects to organize. Allows for gated channels that are exclusive to holders of the project’s NFT. You may be advised to “join the Discord” for a specific project to get the inside scoop.
A platform where you buy your NFTs. Popular exchanges include OpenSea, LooksRare, Rarible, and Nifty Gateway. In order to exist, NFTs must first be “minted” on the blockchain. Minting is like a primary sale, where you buy the art directly from the artist. When you buy an NFT on an exchange like OpenSea, that’s usually a secondary sale. When buying NFTs, don’t forget to also take into account “gas fees,” which are the transaction fees you have to pay in order to complete the transaction. They can range in price up to a few hundred dollars, depending on the time of day and number of other transactions happening simultaneously.
The lowest price at which a specific NFT can be purchased, akin to a low estimate at auction. A floor price that is higher than the mint price (price at which it can be minted) means a project has demand; a project with a floor price lower than mint price is usually a bad sign, investment-wise.
Hold on for dear life. Often used on Twitter as a rallying cry when a project’s floor price is going up or going down. Basically means: Calm down and hold your assets. Pronounced like it’s spelled (hod-el).
Literally means “profile picture,” but in the NFT world, also means a project that often doesn’t have utility beyond use as an avatar on social media. For a while, CryptoPunks was the only “PFP project,” but by the end of 2021 there were thousands of them. They are often released in editions of 10,000, where each NFT will have unique characteristics.
RUG PULL/GETTING RUGGED
Getting scammed. Fishy links abound in the crypto world, so beware of clicking on anything that asks you to connect your wallet without properly vetting it first. There’s also not much, legally speaking, that can stop the creators of an NFT project from selling NFTs and running off with the money. When any form of scamming happens, it’s referred to as a “rug pull,” as in, the rug is pulled out from under you; you might hear people say “I got rugged.”
We’re all gonna make it. Usually used on Twitter in an exclamatory fashion, meant to signal that a project is “going to make it.” Can also be used to remind doubters not to lose hope if a project isn’t doing well. “Making it” can mean any number of things, but mostly refers to a project finding financial success and/or notoriety. You also might hear someone say they’re going to “ape in” because a project is “GMI.” On the flip side, if someone or something is “NGMI,” or not gonna make it, that means it’s trending downward.
A wallet is where you hold your crypto assets. Common wallets include MetaMask, Coinbase Wallet, and Rainbow. When you buy an NFT on an exchange, you have to connect your wallet to the exchange in order to make the transaction. Wallets can hold both coins and NFTs, and you can have multiple wallets. There are “hot wallets,” which are accessed using the internet, and “cold wallets,” which function more like a flash drive that allows you to take your assets offline.
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