Initially, Web 3.0, the next iteration of the Internet, is a concept being discussed increasingly in tech circles. While its central ideas are based on essential concepts that tie into the NFT space, both are closely linked to helping you understand more about them. We’ve developed a little guide of terms you should know if you want to get into NFTs.
What is Web 3.0?
Although Web 3.0 – or Web3 as it is known – is the next generation of internet services. While Web 1 was all about learning, and Web 2 was all about creating, Web 3 is all about owning.
In this version, the web is a decentralized online ecosystem built on the blockchain. That means no company, organization, or entity wholly owns the Internet. Still, every user can hold certain parts of it and affect change through their creations and transactions on the blockchain.
As we said, Web 3 is an essential part of the NFT world, and here are the terms you need to know to navigate it.
Airdrop is the term used to refer to bonuses or free collectibles. This is a way of promoting a new NFT or adding to the popularity of an existing one. They are promotional tools that can increase the user base for an NFT collection.
A blockchain is a digitally distributed, immutable ledger that facilitates recording transactions and tracking assets. Also, you can think of it as a decentralized or distributed database.
While the collection is a body of work, like a store or gallery, and refers to a group of NFTs. Meanwhile, the NFT collection can be grouped by the owner in any particular way they want, maybe by artist or theme.
A crypto wallet is an application or hardware device allowing individuals to store and retrieve digital items, such as cryptocurrency and NFTs.
Dapp is short for Decentralised App, a blockchain-integrated website built on a decentralized network, combining smart contracts with front-end user interfaces.
This is simply a launch or a release. When an NFT drops, it usually means it becomes available for trading in the market.
Ethereum / ETH
Ethereum is a blockchain, so ETH is the currency used to make transactions on the Ethereum blockchain.
A gas fee is an amount of Ether (ETH) required for an Ethereum blockchain network user to conduct a transaction on the network. It compensates miners for their work to verify transactions and secure the network.
Minting an NFT means publishing your token on the blockchain while making it available for purchase.
Non-Fungible Tokens (NFTs)
A digital asset that represents real-world objects like art, music, avatars, and in-game items. They are one-of-a-kind, and each has its unique identifying code. It is this uniqueness that gives NFTs their value.
Smart contracts are programs stored on a blockchain that run when predetermined conditions are met. They are usually used to automate the execution of an agreement between a seller and a buyer, with the terms of the agreement being written directly into the code.
Staking refers to attaching your NFT to a platform or protocol, rewards of staking, and receiving staking rewards in return. By Staking NFTs, the holder earns income while maintaining ownership.
Your wallet address is known as your “public key.” Your wallet address is unique. It’s the address people will use when sending you cryptocurrency or NFTs, like your bank account number. So, your NFTs do not exist inside your wallet but on the blockchain under your wallet address.
There you have it, some of the terms you might come across in Web 3 and NFT. Now you know what they mean. Finally, you can explore the world more confidently!