??Blockchain - NFTs - WEB3 - 101 ??

Since 95% of the respondents of my last poll responded they wanted to know more about the technical side of things with regards to NFTs and Web3 here you go. ??

Let's cover the basics real quick:

1. Blockchain: A decentral (meaning there is no central hub or authority managing this) network of computers that process connected (chain) transactions. Transactions involve the movement of tokens from one address to another.

2. Address: Think of it as a house and this is the street address. Technically speaking it's just a random string of characters that is unique in a blockchain. Often starts with 0x and uses the hexadecimal numbers/letters. There is no value in knowing an address, what gives you access to that address is the private key (think house key). That key Metamask manages for you **in your browser** (meaning the key always stays with you). Metamask (and others) offer what is called a "seed phrase" that allows restoring access to an address if the key is lost. The seed phrase is just more user-friendly to store the private key, so treat it like you would the key to your very valuable safe in your house.

3. Token: The elements that move in a blockchain. The first token was called "Bitcoin" in the "Bitcoin blockchain". The native (more about that later) token of Ethereum is called "Ether". The native token of Polygon is called "Matic". Every blockchain has a native token.

4. Smart Contract: It's a written description of what is allowed to happen blockchain. So you could have a smart contract that says "If I send you 1 ETH then you must send me 20 MATIC back". It could literally pretty much say anything, smart contracts are pretty open with what they can do. They "could" also empty your wallet of all NFTs etc. They are very powerful in blockchains. To make sure people can trust random smart contracts we have pre-defined protocols that ensure a contract follows specific guidelines. The most common are:

5. ERC20 Tokens: These are "extra" tokens in the blockchain. For example, $SAND (from Sandbox) is an ERC20 token in both the Ethereum as well as the Polygon blockchain. What does ERC20 mean? It just means it follows a specific set of generic roles that ensure you can transfer tokens. So an ERC20 contract by default allows the "owners" of tokens to move them around as they wish. It also prevents others from just taking your tokens. Things we often consider "common sense" are defined in ERC20.

6. NFT smart contracts: An NFT is really nothing more than a specific smart contract that defines what can happen with the underlying tokens. So whenever someone says "I'm launching an NFT" it really means: "I'm launching a smart contract with metadata and people can trade it in various ways."

We have 2 common sets of smart contract protocols that most NFTs follow (but don't have to!):

- ERC721: The most basic NFT smart contract. Every token is unique and identifiable by a unique "token id" (the thing after # in e.g. "Lazy Lion #1337"). You cannot have two tokens of the same token id. So Lazy Lion #1337 can only be owned by one address; never two or more.

- ERC1155: An extended contract that allows there to be more than just one copy of a given token id. So technically such tokens are no longer "non-fungible" (which is the "NF" from NFT) but we still call them NFTs. Most often you use this contract when you specifically want multiple copies of the same (think concert ticket/membership etc.).

7. Metadata: You would not really want to store a lot of information in the blockchain about an NFT. So a whole picture would actually be too large for it to be economically (because of gas fees). So instead we store a link to a picture (or other media). And that link can point to anything. It can point to your own private website (and some NFTs do that) or to a decentralized files system. Such a filesystem can be IPFS, which is common for NFTs, but it can also be anything else. Now metadata is a file that describes the NFT (name, description, etc.) along with a link to the media (if there is any), like the image. So an NFT typically consists of the following 3 things:

• Smart contract with a token ID
• Metadata file with a link to a media file
• Media file

Only the first part here is stored in the blockchain. The metadata and media files are typically not stored in the blockchain itself. Especially in the gaming world smart contracts often do not point to IPFS or decentral storage for metadata but rather point to their own system so that they can deliberately (but always carefully) adjust metadata as they see fit.

Let's leave it at this, for now, please comment or message your opinion of this article. I'll try to be as technical as possible while making it as understandable as possible. :)

#nft #web3 #blockchain