Introduction
WTF is a blockchain?
What is Ethereum?
What is a wallet?
How to get a wallet set up
What is an NFT?
The internet has undergone a remarkable transformation with the advent of web3. This new paradigm promises to revolutionize the way we create and share art, organize communities, and enable the flow of value. In this article, we'll dive into the fundamentals of web3, exploring concepts such as blockchains, ETH, wallets, and NFTs.
This will be a high level overview in my own words. If you want to dive deeper, I highly recommend checking out MetaMask Learn. People smarter than me created MetaMask learn. And they have pictures!
A blockchain is the thing that facilitates all the art and value transfer. A blockchain is the underlying tech that makes all these cool things possible.
In web 2 you publish your art to YouTube, Instagram, Spotify, Bandcamp, Patreon etc. and get paid through those platforms or maybe you sell your art or merch through another platform. You are at the mercy of those platforms and they may take a cut of your revenue. YouTube may take your content down, Bandcamp takes a cut of your sales (except on some Fridays), Patreon takes between 5-12%, Spotify has mostly opaque ways of determining how much to pay you… You’re probably familiar with most of these mechanisms.
In web3 you publish your art to the blockchain, and facilitate payment through the blockchain. You can publish all on your own, get paid directly, and automatically collect future royalties ONCHAIN. Web3 dreams to remove middlemen, promises to give you autonomy, and much more. In practice, there are some tools that still act as middlemen, so utopic web3 believers may have to do some extra work to maintain 100% crypto-idealism in their art and work, but the artist in web3 definitely has more autonomy than in web2.
Ethereum is the primary blockchain used by artists. We may review other chains in a future article, but for simplicity’s sake, we’re going to talk about Ethereum, since it is by far the most popular chain/ecosystem for artists. It’s also likely to continue to dominate, so If you’re just getting started, I recommend learning within the Ethereum ecosystem.
ETH or Ether is the native asset or token of the Ethereum Blockchain. What does that mean? It means ETH is the default currency used in all Ethereum transactions. You don’t necessarily have to sell all your art in ETH, since there are tons of tokens out there, like USDC which is a blockchain representation of a regular ol’ US dollar.
Without going too deep (you can go deeper here), ETH is used to pay for gas fees and deployment costs. So you’ll need ETH to deploy a contract, buy & sell most NFTs, and do lots of things on Ethereum.
One quality of ETH is that it’s an asset that can be traded for dollars (or Euros, or Bitcoin…) There is a price for ETH at any given moment on any given exchange that famously fluctuates significantly.
USDC is very useful, because 1 USDC is always* equal to exactly 1 dollar. This helps people make plans in a similar way as they are used to. (I have a pretty good idea what $100 can do/buy for me and I know that doesn’t change too much over time, inflation aside.)
You can exchange ETH for USDC and vice versa. You can take your USDC over to an exchange like Coinbase and exchange it for USD, transfer that USD to your bank, and go buy fancy cheeses and meats for your new charcuterie board. USDC is real money! So is ETH!
In my own words, a wallet is the thing that holds all your money and art in web3.
You can have a custodial wallet or a non-custodial wallet.
The OG Crypto people will preach that you should use a non-custodial wallet (and I generally agree). Non-custodial means that there is no one else (no custodian) that has control of your stuff (art and money).
Custodial wallets are managed by a third-party services like Coinbase, Kraken, Binance. There are some advantages to these, but if you want full control of your assets, you want a non-custodial wallet.
You may even want to get a hardware wallet like a Ledger or a Trezor.
I recommend a non-custodial wallet with either Coinbase Wallet or MetaMask.
MetaMask is the most-used browser wallet and generally the easiest way to interact with Ethereum apps and contracts.
I recommend this guide on how to set up a MetaMask Wallet.
Coinbase is one of the biggest and best names in the space. They have a bunch of products you can use at Coinbase.com as well as their app “Coinbase Wallet”.
Note there is a difference between an account with Coinbase (the custodial wallet addresses you’ll have on Coinbase.com) and the completely different app - Coinbase Wallet. Coinbase wallet is basically Coinbase’s version of MetaMask.
You’ll need to have a wallet to participate in a LedgerLines Experiment. You’ll need a wallet to interact in web3.
NFT stands for Non-Fungible Token. Unlike cryptocurrencies like ETH, which are interchangeable, NFTs represent unique digital assets that can be bought, sold, and owned. They have gained popularity in the art world, allowing artists to tokenize and sell their digital creations, providing proof of ownership and authenticity.
They’ve gotten a bad reputation over the last few years and some of that is fair. Some of it comes from ignorance.
An NFT is basically just a way to represent something. You might choose to represent 10,000 Pudgy Penguins wearing dumb hats and bad mustaches. Or you might choose to represent ownership of some seriously beautiful art. The choice is yours.
One truly unique quality of an NFT is the ability to program royalties to the artist in a future sale. Let’s say that you sell a piece of your art as an NFT for $100 (it’s more likely that your sale would be denominated in ETH, not USD, but we’ll use USD for the sake of this example). Since you’re selling the art, you get that $100 from the buyer, Let’s call the buyer “Katie”. Katie likes your music and she’s happy to now own a 1-1 NFT of your song! Katie follows you and supports you over the next few years and you keep growing, making more music, playing festivals and are crushing it. Now, along with 2 million of your new fans, “Bobby” falls in love with your music and wants to have some ownership too. He’s willing to buy that same NFT from Katie for $1,000. Katie still loves your music, but needs the money, so she accepts Bobby’s offer for $1,000 and thus Katie turned her $100 investment in you into $1,000 from Bobby. Painters have have seen this model play out for hundreds of years where they DO NOT benefit from future sales. But NFTs allow you to require (through code) that future sales give you a royalty payment. For example, if you set your royalty to 10%, Bobby buys that NFT from Katie for $1,000 you automatically receive $100. Every single time it’s sold. Forever.
THAT is cool. THAT is new. And that’s just one example of how programmable art and money can create new opportunities for artists to collect value.
Is your head spinning yet? There’s a lot to learn, but if you just stick with it for a little bit, you can get it. That’s part of the LedgerLines philosophy: Things on Ledger Lines may seem harder to read/understand at first, but once you understand how they work, it’s really not that hard.
The TLDR of all of this is:
Blockchains enable this new world of creating and sharing art, organizing communities, and enabling value flow.
Ethereum is where the party is at.
You need a wallet to party with us.
NFTs aren’t evil. They’re cool.
That’s it for now. See you in part 2 where we’ll cover some real-world examples of artists using these tools to make cool stuff!
Also, if you haven’t yet, checkout the plan for LedgerLines Experiments and apply to take part in one of our experiments here: