LEARN THE TERMS
NFT (Non-Fungible Token)
An NFT, or non-fungible token, is:
A token (unique digital certificate)
that isn’t fungible (i.e. interchangeable with an identical item)
NFTs are unique, meaning one does not equal the other in the way dollars or bitcoins do. That’s what non-fungible means.
An NFT provides ownership rights in a digital asset, which is anything that is created and stored digitally, such as an artwork, a song, an interview, or a logo.
Think of NFTs as unique certificates of ownership and authenticity of a digital asset.
These certificates are created by smart contracts. Smart contracts are the programs containing all of the metadata (digital information) needed to make an NFT.
When an NFT is created, it has been minted, which is verbiage taken from the manufacturing of metal coins.
The process of minting happens when a smart contract adds a digital file to a blockchain.
These digital certificates are stored on a blockchain.
A blockchain is a digital public database used to record transactions.
In other words, it's a permanent record that can be read by anyone, and owned by no one.
Blockchain owes its name to the way it stores transaction data—in blocks, linked together to form a chain. As the number of transactions grows, so does the blockchain.
We agree with DC investor, a seasoned NFT collector and DeFi (decentralized finance) supporter, when he says that the value of the blockchain isn’t that it’s a global cloud computer, but rather that it is a shared source of truth which everyone can agree on, while remaining censorship-resistant and tamper-free with no one “controlling” it.
There are many different blockchains, or databases, that exist. Every blockchain has its own unique currency or coin that is used to move information around within the database. The information that is moved around usually represents transfers of wealth.
The most famous (and first) blockchain is the Bitcoin blockchain, responsible for recording everything that happens with the cryptocurrency Bitcoin token.
Ethereum is another Blockchain that uses a token called Ether(ETH) to transact. Ethereum is special because it was built not only to record information, but also to run programs (smart contracts) that enable it to do virtually limitless things. This gives it much more use cases than Bitcoin.
To live on a blockchain is to live on a digital database verified by all computers that cannot be disputed or changed.
It is a single, decentralized source of truth.
When something is centralized, it is controlled by one entity, like a Bank or corporation.
When something is decentralized, it is controlled by multiple entities instead of one. In our case, these entities are all of our computers.
Non-fungible tokens are stored in digital wallets. Without a digital wallet, you have no way of interacting with NFTs (aside from looking at them).
Once you create a wallet, you can buy, sell, transfer, and mint NFTs using your wallet.
Your wallet identifier is referred to as your wallet "address", which is a 42-character string of letters and numbers.
We'll set up a Metamask wallet together in Step 5, but that's not the only wallet provider out there (just our favorite). You could also set up a digital wallet through Coinbase or Trust.
Most of the time, this costs a gas fee, which is the fee you pay for the computers in the network to validate your transaction onto the blockchain.
If the NFT exists in your wallet, you are the indisputable owner of said NFT. You may do what you want with it — nobody is going to take it away from you or tell you it isn't yours.
Individual's wallets are public and accessible by anyone with internet access. Because of this complete transparency, the authenticity of an NFT is always verifiable.
You can view the contents of someone's Ethereum wallet by searching their wallet address (a 42-character string) in Etherscan.
Web3 is the trustless web — a world that empowers us to make independent financial decisions without ever needing to “take anyone’s word for it”. Everything is provable.
You don't have to trust a company to send your money for you.
You don't have to trust a vendor’s word that that file is what they say it is.
You don't have to trust big tech not to lose, use, or sell your data.
Web3 is decentralized, code-based, and free from middlemen.