blockchain and NFTs

what does NFT stand for?

non fungible token

what is an NFT?

a unique and non-interchangeable unit of data stored on a digital ledger called a blockchain

what is a blockchain?

a growing list of records, called blocks, linked together using cryptography

(a list of records that is linked together and verified by cryptography)

• each block has a cryptographic hash, timestamp, and transaction data

what is a cryptographic hash?

a unique value that is assigned to each block

what are blockchains managed by?

a peer to peer network for use as a public ledger

T or F: you don’t have to pay taxes on your Bitcoins

FALSE

you do have to pay taxes for your Bitcoins, as they are registered to you personally

how are blockchains considered secure?

by using a distributed computing system

• every new block is validated by these systems to make sure the proper protocols are being followed

in short terms, what really is blockchain?

the backend, detailed process of how we are validating all of these values

who created blockchain?

Satoshi Nakamoto in 2008

• this was an alias, no one knows Satoshi’s real identity

what was blockchain initially created for?

for Bitcoin

what does fungible mean?

goods contracted for without an individual specimen being specified

(creating a specimen but we don’t know what specimen we are creating)

• is able to replace or be replaced by another identical item; mutually interchangeable

where does the word fungible derive from?

from the Latin root word ‘funi,’ meaning “to perform”

what can something that is fungible be exchanged for?

something else of the same kind

what does it mean when we say that oil is a fungible commodity?

when a purchaser is expecting a delivery of oil, any oil of the stipulated quality and quantity will usually do

why would somebody purchase an NFT?

it allows the buyer to own the original item

it contains built-in authentication, or proof of ownership

get “digital bragging rights”

what are the two most popular places to buy NFTs?

crypto.com

coinbase.com

who created the most popular NFT?

Mike Winklemann, better known as “Beeple”

what is the NFT “EVERYDAYS: The First 5000 Days” composed of?

of 5,000 different daily drawings that “Beeple” gathered over the years

how much did the most popular NFT sell for?

for $69.3 million

what are the steps to creating an NFT?

1. open a crypto wallet and fund it with Ether or another crypto to cover computing fees involved with creating it

2. create the button or item inside the marketplace and upload work

3. list the NFT for sale for fixed price or auction

what are the pros of NFTs?

certain pieces of art have a long track record of appreciating in value — digital could do the same

buying and selling could lead to far more buyers and sellers in the past

“smart contracts”

what are smart contracts?

coded commands built into blockchain can ensure artists and creators are paid based on use and resale of their work

what are the cons of NFTs?

primarily valued by subjective metrics like buyer demand

could be extremely volatile

creating and selling isn’t free, and fees can be more than the NFT is worth

NFTs require a significant amount of energy to create and verify transactions