an Overview of NFT’s and What They Mean for Artists/Creators of
TERMS | DEFINITIONS
Cryptocurrency: At its core, cryptocurrency is typically decentralized digital money designed to be used over the internet. Bitcoin, which launched in 2008, was the first cryptocurrency, and it remains by far the biggest, most influential, and best-known. In the decade since, Bitcoin and other cryptocurrencies like Ethereum have grown as digital alternatives to money issued by governments.
How does cryptocurrency work?
Bitcoin is the first and most well-known, but there are thousands of types of cryptocurrencies. Many, like Litecoin and Bitcoin Cash, share Bitcoin’s core characteristics but explore new ways to process transactions. Others offer a wider range of features. Ethereum, for example, can be used to run applications and create contracts. All four, however, are based on an idea called the blockchain, which is key to understanding how cryptocurrency works.
- At its most basic, a blockchain is a list of transactions that anyone can view and verify. The Bitcoin blockchain, for example, is a record of every time someone sends or receives bitcoin. This list of transactions is fundamental for most cryptocurrencies because it enables secure payments to be made between people who don’t know each other without having to go through a third-party verifier like a bank.
- Blockchain technology is also exciting because it has many uses beyond cryptocurrency. Blockchains are being used to explore medical research, improve the sharing of healthcare records, streamline supply chains, increase privacy on the internet, and so much more.
- The principles behind both bitcoin and the Bitcoin blockchain first appeared online in a white-paper published in late 2007 by a person or group going by the name Satoshi Nakamoto.
- The blockchain ledger is split across all the computers on the network, which are constantly verifying that the blockchain is accurate.This means there is no central vault, entity, or database that can be hacked, stolen, or manipulated.
Distributed Ledger Technology (DLT)
We touched on the concept behind public ledgers—that place you go to view all transactions made on a blockchain. DLT refers to a distributed ledger, another term for blockchain technology. When you see DLT, think blockchain. Take note of that.
Decentralized apps (dApps)
Speaking of decentralized, you should probably know about dApps. These are open-source applications built on a blockchain intended for real-world use. Ethereum is considered the mother of dApps. Ethereum was founded on the idea of enabling developers to create new applications on top of their blockchain.
There is no one-size-fits-all definition for dApps. But as BlockGeeks puts it, all dApps have a few things in common: they are open-source, decentralized, incentivized (validators need to be rewarded with cryptographic tokens) and have a protocol (the community agrees on a cryptographic algorithm that can be widely adopted).
Some ETH-based dApps are now worth millions in market cap, and in theory, a dApp can become as valuable as any other company or product.
Decentralized finance (DeFi)
DeFi is a blanket term for decentralized alternatives to traditional (centralized) finance. DeFi includes banking, money management, payment processing, insurance, etc. DeFi products and services enable democratized access to a historically exclusive industry.
Start paying attention, and you’ll see this term thrown around on Twitter. You should probably know what it stands for.
Non-fungible tokens (NFTs)
If you’ve been following ONE37PM at all these past two months, you’ve probably heard about NFTS. Non-fungible tokens enable virtual transactions between collectibles like art, music and trading cards using smart contracts. For more info, check out this comprehensive guide on NFTs.
Mining | Gas Fees
When you make a transaction on the blockchain, you have to pay a fee. That fee is called a gas price. You are basically paying a miner to go out and receive crypto for you. You can choose to pay higher fees for faster transaction speeds, or lower fees for slower transaction fees.
Gas prices are one of the biggest challenges facing cryptocurrency markets. If we find a better way to drive down energy costs for transactions, crypto will become more ubiquitous.
Coins: ETH, BTC, DOGE, Lite. Many of Them…
Altcoins = any crypto coins not named Bitcoin. Okay, don’t know much about Bitcoin? Here’s a good Bitcoin intro and refresher.
Anyway, since Bitcoin launched in 2011, thousands of altcoins have emerged. Some coins disrupt markets and shape industry trends, while some coins are hot garbage ridden with financial crime. Most of the popular altcoins serve some real-world function. Sorry, Dogecoin.
Ethereum is currently the world’s largest altcoin, but look out for these altcoins in 2021.
Wallets | Addresses | Passphrases
Cryptocurrency coins are identified on the blockchain by unique addresses. You can think about the blockchain as a GPS and your cryptocurrency address as its targeted mailing address. Without an address, no coin is stored; the blockchain can’t confirm nor verify its existence. So, without a proper wallet address, you can’t own a coin.
Every time a transaction is confirmed, the value of your wallet is updated based on your address. Addresses may appear in different formats depending on the currency, but most look something like this: 17VZNX1SN5NtKa8UQFxwQbFeFc3iqRYhem (this is a fictional address, I respect your intelligence… but please do not send crypto here or use this address for any other purpose).
If you are confused by all this, the answer is yes, you shouldn’t have Cash apped hot dog stand guy to send you Bitcoin.
ICO, NFT “Drop”
Initial Coin Offering
Comparable to the traditional Initial Public Offering (IPO), an ICO is a new method for projects and startups to secure funding. Pretty much anyone can participate in an ICO. More importantly, it’s about finding the right fit for investors and founders, according to Jonathan Chester, Founder & President of ICO consulting firm Inwage.
“DROP” = Slang for offering a new art work for sale on blockchain
Ecosystem | Platform | Protocol
Satoshi Nakamoto is the individual, or group of individuals, credited with founding the world’s first cryptocurrency, Bitcoin. The founder of Bitcoin remains completely anonymous.
If you see the term ‘satoshis’ thrown around, that refers to a fractional unit of Bitcoin. You can transact with satoshis. I once heard some lady on CNBC who was bearish on Bitcoin because “the average consumer doesn’t want to make a purchase with 0.0003 of something”. She clearly does not understand how Bitcoin works. Facepalm
A core feature of the Ethereum blockchain and NFTs, smart contracts are just your typical boring legal contracts… only they’re written in computer code.
Smart contracts hold multiple parties accountable for something, just like a normal legal contract, but it instructs each party through code rather than spoken language. Both parties can see and approve of the programming before accepting a contract’s terms, making it completely transparent.
Law | Regulation
Proof of Work (PoW)
Proof of Work is a more traditional method to award miners for their effort. It requires miners to show their effort by tying a variable to the process of hashing a transaction. A hashed block proves work was completed and awards the miner. This takes up a lot of energy.
Proof of Stake (PoS)
Proof of Stake allows a person to validate or mine cryptocurrency based on the number of coins he or she owns. Under this model, the idea is that a miner will be less likely to attack a network if they have a stake in the game.
A public key is a string of characters used to purchase cryptocurrency. If a content creator, for example, wants to receive cryptocurrency instead of fiat for his or her content, they can list their public key. Fans can easily send cryptocurrency using the content creator’s public key.
Each blockchain has its own ledger. Here’s a link to Bitcoin’s public ledger. This is the place where you can view every transaction ever made on a blockchain, given that it’s public. Some coins distinguish themselves by operating on an anonymous or private ledger.
THEORY | GREATER IMPLICATIONS | ETHICS
Contractualism | Agreement | Currency
Fiat currency is 1) government-backed and 2) not backed by any commodity (like gold). Those green US dollars in your wallet? That’s fiat currency. The value of US dollars rely solely on our collective faith in the institution of the United States government. If the US crumbles, so does your fiat.
For Artists | Creatives | Producers of Content, Intellectual Property
For Galleries | Institutions
Regulations | Volatility | Investor/Collector Confidence
(So Far) Disastrous Ecological Effects, High Energy Consumption
TREZOR, Ethereum 2.0 Addressing that…
USE-CASES (Current Examples)
What is CryptoKitties?
CryptoKitties is a game centered around breedable, collectible, and oh-so-adorable creatures we call CryptoKitties! Each cat is one-of-a-kind and 100% owned by you; it cannot be replicated, taken away, or destroyed.
- (one of 1st NFT Ever Offered)
- Most Expensive NFT out is a Cryptokitty
PINK coin: https://pinkcoin.com/
PinkCoin is a cryptocurrency designed as a charitable platform from a company of the same name in Vancouver. … It is also recognized as one of the few asset-backed cryptocurrency, backed by numerous certified, fancy colored diamonds (mostly pink) with a total NAV of $5,000,000 USD.
TokenEstate (Swiss-based Real Estate Comany)
Superchief Gallery: https://www.superchiefgallery.com
THE DAO|LAO: CryptoBillionaire Collector Groups | Fractionalized Ownership:
Nifty Gateway (Winkelvoss Twins)
WALKTHROUGH ON VARIOUS PLATFORMS
RESOURCES | LINKS
ETH: Ethereum is open access to digital money and data-friendly services for everyone – no matter your background or location. It’s a community-built technology behind the cryptocurrency ether (ETH) and thousands of applications you can use.
DEVELOPERS | ENTREPRENEURS
*WP SMART CONTRACT:
What is NFT Matcha Smart Contract?
ERC-721 is a standard for non-fungible tokens (NFT) or deeds. NFT are useful to represent digital or physical assets that cannot be divided, for example:
- Properties (houses, art pieces)
- Virtual collectibles (virtual pets, cards)
- “Negative value” assets (loans, burdens, and other responsibilities)
The most famous ERC-721 token is the CryptoKitties, which is still the most active NFT in the Ethereum network. The most expensive CryptoKitty to date is Dragon, with a price of 600 Ether (USD 232K value).
But NFT is not only about kitties. There are all kinds of virtual assets. OpenSea, one of the biggest Marketplaces for NFT, has thousands of assets from Virtual Worlds to Football Fantasy Cards.
During late 2020 and 2021 the NFT market has reached incredible levels of monetization in different areas including arts, music, memes, tweets and all kinds of NFT. One of the most notable ones was the Beeple, Everydays – The First 5000 Days sold for more than 69M$
We will give our users the possibility to create their fully-featured ERC-721 tokens.
Native and advanced features like:
- Image: an image is a unique file like a piece of art, a picture, profile, etc. Formats are .png, .jpg or .gif
- Video: a recording, animation, short movie, etc. For videos you can choose multiple files, but all files should correspond to same asset with different format, i.e. .mp4 and .ogv. This is because some video formats are more suitable than others on different devices.
- Audio: a song, podcast, effects, etc. You can choose multiple files, but all files should correspond to same asset, i.e. .mp3 and .ogg.
- Documents: this is a unique file that correspond to a property, license, loan, debt or any other document you need.
METAMASK (Wallet): https://ethereum.org/en/wallets/find-wallet/
*will return to WP SMART CONTRACTin the Section at the End for DEVELOPERS,
ie, Website Builders, Coin Issuers