Blockchain Fundamentals
What is a blockchain & how does it work? Why blockchain at all?
A blockchain is a database system of recording information that makes it difficult or nearly impossible to change, hack, or cheat. It’s essentially a digital ledger of transactions that is duplicated and distributed across an entire network of computer systems or what is called “nodes”.
Blockchain is widely used due to two main reasons, blockchains are decentralized - this means there are no 3rd parties involved in approving your transactions on the chain, this also means blockchain is immutable (Tamper Proof) as they rely on all parties in the network agreeing on the blockchain (This is known as consensus).
Blockchain is highly secured due to its use of cryptographic keys and signatures - this prevents fraud such as other users pretending to be you as they would not be able to replicate your private keys.
What makes NFTs different from other digital assets like Bitcoin or Ethereum?
BTC and ETH are examples of fungible goods. They are interchangeable in the sense that each ETH is identical to another ETH, and can be used for practical purposes (buying, selling and borrowing). For example, if someone borrowed one ETH from you, they can pay you back with any other ETH. However, if they borrowed a specific tokenized piece of art from you, they would have to return that exact same piece of art back to you (as opposed to any other piece of art) — just imagine how ridiculous it would be to swap Mona Lisa with some random doodle.
What is a Wallet?
Blockchain wallet is a digital wallet that enables you to hold different cryptocurrencies, such as ETH and BNB. To mint, sell or buy NFTs on Fangible, you will need to connect your wallet and make sure you have a small amount of ETH or BNB ready.
What is a Web Wallet? Metamask?
A Web Wallet is a web extension wallet that allows you to manage your private keys via your web browser. You can store, send, and receive funds like any other cryptocurrency wallet. An example of a Web Wallet is Metamask, which can be used to interact with various blockchains such as Ethereum and Binance Smartchain. It allows users to access their wallet through a browser extension or mobile app, which can then be used to interact with decentralized applications.
What is Ethereum?
Ethereum is a blockchain platform that enables people to build decentralized applications (dApps). It is currently the most widely used platform for NFTs.
What's the difference between the ERC-721 or ERC-1155 standards?
ERC-721 was the first standardized interface for creating NFTs. It is immutable, transparent in ownership and security, and the most widely used. It will always be the gold standard of a valuable collectible NFT. Although transferable, trying to transfer an entire collection can be slow and inefficient, especially when gas fees are high. ERC-721 also requires a new smart contract to be deployed for each new type of token. Therefore, when you need to mint NFTs in masses, it doesn't make much sense to use this contract.
ERC-1155 is a dual purpose fungible and non fungible token. It was developed by Enjin, to tokenize things like common gaming skins and other commoditized items. It’s faster and more efficient to use in batch token transfers and is considered “the next generation multi-token standard,” as it can be deployed in a single smart contract for an infinite number of token types. The only real draw-back is that the NFT is harder to track in terms of ownership—to save data stored on blockchain ERC-1155 has specifications on the Ethereum logs that have less robust information.
What is Binance Smart Chain (BSC)?
According to Binance, Binance Smart Chain is “a dual-chain architecture that empowers its users to build their decentralized apps and digital assets on one blockchain and take advantage of the fast trading to exchange on the other.” BSC is rapidly gaining traction in the NFT space for its high speed and low transaction costs.