Hello and welcome back to Day 2 of our 7 day NFT journey!
Yesterday, we discussed what NFTs are at their core and also briefly mentioned how they run on a so-called blockchain. Today, we'll take a closer look at what this entails, because understanding blockchain is essential if you want to better comprehend NFTs.
A blockchain is essentially a distributed database or ledger that is shared among a lot of computers. One key difference between a typical database and a blockchain is how the data is structured. A blockchain collects information together in groups, known as blocks (hence the name), that hold sets of information. Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain.
Most databases are often controlled by a single central authority (e.g., Google, a small organization, or an individual) and are housed in a single location. The disadvantage of having a centralized database is that it creates a single point of failure. For example, the central database can be hacked and critical information stolen.
Bitcoin pioneered the distributed ledger concept. Again, this refers to an electronic database that exists in numerous locations or among multiple participants and does not require the participation of a central authority.
You're probably asking what this has to do with NFTs. As previously mentioned, it is critical to realize that NFTs are based on blockchains; without a blockchain, NFTs would not exist. Both cryptocurrency and NFTs rely on blockchain transactions to prove their authenticity and record ownership. In most cases, purchasing NFTs requires using cryptocurrency. The Ethereum Blockchain is the most significant and well-known blockchain for NFTs. NFTs that exist on the Ethereum Blockchain generally require ETH to purchase them - this is the native currency of Ethereum.
Tomorrow, we'll explore how you can interact with the blockchain in a practical sense and get set up so you can own your first NFT.
Extra credit:
If you have 5 minutes, here is a great article by NFT now explaining the various blockchains for NFTs:
https://nftnow.com/guides/complete-simple-guide-to-top-nft-blockchains/
If you have 6 minutes to spare, this is a good in-depth explanation of Blockchains.
Blockchain - distributed database or ledger that is shared among computer network nodes
Node - a device that participates in a blockchain network. It runs the blockchain protocol’s software, following it to help validate transactions and keep the network secure
Ledger - a physical/digital “book” for keeping notes, especially one for keeping accounting records, a record book, or a register
Ethereum - decentralized global software platform powered by blockchain technology. It is most commonly known for its native cryptocurrency, ether, or ETH
If you have any feedback or questions, simply reply to this email or reach out to be directly at jason@blackcove.xyz. Don’t hesitate to reach out, I’d love to hear from you!