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Feeling a bit lost in the world of NFTs? Don’t worry—you’re not alone! Whether you’re a seasoned art lover or just starting to dip your toes into the digital art scene, understanding all the buzzwords can be a bit overwhelming. Luckily, Berlin-based art advisor and .ART user Adam Szymanski has your back. In this article, Adam breaks down the essential NFT terms every beginner needs to know, making it easy for you to navigate the exciting world of digital art with confidence!

ArtBlocks: ArtBlocks is a platform for generative digital art that utilizes the Ethereum blockchain. It offers both curated and artist-led collections where many pieces are generated algorithmically at the time of minting. 

Base: Base is a layer-2 blockchain developed by the American cryptocurrency exchange Coinbase that offers lower-cost and faster transactions compared to Ethereum’s mainnet.  

Ethereum: Ethereum is a decentralized blockchain platform known for its smart contract functionality, which enables developers to build decentralized applications (dApps). It is the most popular and longstanding blockchain for creating and trading NFTs. 

Gas Fees: Gas fees are payments made by users to compensate for the computing power required to process and validate transactions on a blockchain like Ethereum. High gas fees during periods of network congestion have historically made NFT transactions costly. 

Generative Art: Generative art refers to artwork that is created using algorithms or autonomous systems, often resulting in unique, randomized outcomes. Platforms like Art Blocks enable artists to mint and sell algorithmically generated works as NFTs. 

Layer 2: A Layer 2 is a blockchain built on top of an existing Layer 1 blockchain, like Ethereum or Bitcoin, to improve scalability and reduce transaction costs. These blockchains inherit the security of the underlying Layer 1 but can process transactions off-chain. Examples include Optimism on Ethereum and the Lightning Network on Bitcoin. 

Mainnet: Mainnet refers to the primary public blockchain where transactions occur and are verified. Ethereum’s mainnet, for example, is where most high-value NFT transactions take place. 

On Chain: “On chain” refers to transactions or data that are recorded directly on a blockchain. In the context of NFTs, “on-chain” assets or information mean that the content or metadata is fully stored on the blockchain, ensuring decentralization and immutability. 

Ordinals: Ordinals are a protocol that allows individual satoshis, the smallest units of Bitcoin, to carry extra data such as images, text, or other metadata, creating unique digital artifacts directly on the Bitcoin blockchain. While not technically NFTs, Ordinals enable Bitcoin to host NFT-like assets which are collectible and traceable. 

PFP (Profile Picture) NFTs: Profile Picture NFTs are digital avatars used on social media platforms. These NFTs symbolize ownership of a unique avatar, which has become a status symbol in digital culture. 

Proof-of-Stake (PoS): Proof-of-stake is a consensus mechanism used by blockchains like Tezos, Ethereum which relies on validators who stake their tokens to validate transactions and create new blocks. PoS is a more energy-efficient alternative to proof-of-work blockchains such as Bitcoin. 

Satoshis: A satoshi is the smallest unit of Bitcoin, equal to one hundred millionth of a Bitcoin (0.00000001 BTC). Named after Bitcoin’s pseudonymous creator, Satoshi Nakamoto, satoshis are often used to measure small transactions on the Bitcoin network. 

Tezos: Tezos is a blockchain known for its active artist community. 

Tokenization: Tokenization refers to the process of converting an asset into a digital token on a blockchain. Digital art is an asset that can be tokenized using NFT technology.