All NFT related terms in one place.

    If one has to talk about an emerging medium that went mainstream and created a massive boom in the internet culture, then the first thing that comes to mind is a Non-Fungible Token or NFTs. Ever since their boom last year, NFTs have disrupted the art world and industries beyond it.

    To enter this Internet trend or the Web3 culture, we have compiled a short guide that will help you understand the basic NFT related terms and their working.

    What is what?

    First things first, let’s put down what an NFT means in simple terms. A non-fungible token refers to something that is unique- an artefact that cannot be exchanged for any other because none other having the same value or attributes exists. We can use NFTs to represent ownership of unique items.

    What makes an NFT more interesting is that it is a digital asset. It lets us “tokenize” things like art, collectables, and even real estate. Anyone can create an NFT, and an NFT can be anything!

    NFTs can be digital artworks, a tweet you sent, a picture you took, a poem that you wrote, or anything that can be uploaded digitally.

    Let’s understand a few must-know terms to enter the world of NFTs in the simplest way ever.

    Blockchain is a digital ledger that records information to make it difficult or impossible to change, hack, or cheat the system. Information once stored in blockchain will remain there forever.

    Smart contracts-
    Smart contracts are transaction protocols that are programmed to automatically execute, control or store events according to the terms of the contract. As soon as the conditions mentioned in your contract are filled, your transaction will automatically go through.

    Ethereum is a decentralized, programmable blockchain having smart contract functionality. It has its own cryptocurrency, ETH (1 ETH= $2,419.19 as of 25th January 2022).

    It is the process of creating a new “block” to add to the existing chain. It requires the users to solve a difficult puzzle that involves a lot of computing power. This puzzle is actually just a mathematical puzzle called proof of work.

    Proof of work-
    Proof of work (PoW) is a consensus mechanism where a miner adds a new block to cryptocurrency’s blockchain. After a certain amount of a specific computational effort has been expended, the miner is verified with PoW.

    Floor Price and List Price-
    The floor price is the lowest price of any listed NFT. However, a list price is the price that a seller puts up for their NFT.

    Fiat Currency-
    This does not refer to the car Fiat. In the crypto world, Fiat actually means money. The difference between real money and fiat currency is that Fiat Currency is any currency confirmed and backed by a government as a legal tender.

    Gas fee-
    It is the fee that users need to pay to the blockchain network for their transactions. The price is set by miners and can rise and fall depending on supply and demand.

    DeFi stands for Decentralized Finance. It basically removes the control banks, private owners, or institutions have on money, financial products, and financial services.

    AB/Art Blocks-
    These do not refer to NFTs or a collection of NFTs at all. Art Blocks is a digital art platform built on the Ethereum blockchain that produces, sells and stores art.

    We know that as you begin your journey, NFTs and the world of crypto may look intimidating. So rest assured, if you know the meaning and working of the above-explained terms, you’re good to go!

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