If you are new to the space, you may be lost or confused as to the buzz words, what they mean and their effects. I would be writing to break some concepts down for you to understand.
Web3:
Web3 can be referred to websites and applications running on decentralized technology that uses blockchain which is completely decentralized and trustless as it works on blockchain technology which is supported by thousands of computers globally.
Characteristics of web3 includes:
Decentralization which means there’s no central entity that controls the space and power is distributed evenly without hierarchy issues.
Value ownership which means that every contributor, creator, artist or community gets rewarded evenly.
Blockchain:
Blockchain is a chain of blocks which holds data in each block which can’t be modified or manipulated once validated. This acts as a secure ledger that connects every user to the peer-to-peer decentralized network.
Cryptocurrencies are built on this chain because of its secure, decentralized and immutable nature.
Decentralized?
It is decentralized as eliminates the use of middlemen in transactions such as when trying to make a transfer as it uses peer-to-peer network system.
Immutable?
What it means in this regard is that once data is input and verified, it can’t be changed as this is a digital ledger available for everyone to see. Once there’s discrepancy in the data in comparison to the others in the network, it would be rejected.
Secure?
A blockchain is secure as it is made up of series of linked blocks which holds information with a hash value and previous block address. A hash value can be likened to a digital fingerprint generated using cryptography to identify a block’s data. If there’s change in the data, this value changes. In the case of addresses, once a change is made to the address block, every block linked to that modified block becomes invalid which makes it really difficult to tamper with.
NFTs:
Non-fungible tokens are tokenized items used to represent ownership of an asset be it art, music or even memes. It is different from the fungible asset which when swapped retained the same value while a non-fungible is unique in every aspect of it.
NFTs are built off of the same core technologies of blockchain such as Ethereum, Solana etc. These tokens leverage on the use of ERC-721 token standard such as in Ethereum or SPL standard associated with Solana.
How Does an NFT Work?
They exist on the blockchain and distributed across a huge network of nodes. They are a digital collectible where when minted gives exclusive ownership to collectors. The creators can also store specific information such as their signature in the collectible’s metadata.
Right click and save?
In the cases of pictures and arts, when you right click and save them, its not the same as having ownership to that collection as they do not have value which is the signature and associated information. Its just like taking a picture of the Mona Lisa, though you have the picture of the painting, you do not hold ownership to the painting itself as only one person can possess the original at a time.
What are NFTs used for?
NFTs have many uses which includes proof of ownership and above all a unique support platform for artists and creators to showcase their works without having to rely on galleries to showcase their works.
Embedding these NFTs in a smart contract eliminates the middlemen to sell these products, offer royalties to creators as their work keeps getting resold which isn’t the case for traditional arts.
Conclusion:
This is an introduction into the world of web3, blockchain and NFT as you explore the ecosystem. You can connect with me on LinkedIn or Twitter. Thank you for reading.
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