10 Apr Non fungible Tokens (Nft) – a beginners Guide:

What are NFTs? 

Disclaimer: all opinions are my own and neither constitute legal no financial advice in any way – please refer to my disclaimer page for more details

NFTs Stands for „non fungible Tokens“ which at its their core are pieces of code/identifiers on a„blockchain“ to assign the authorship/ownership of an asset/digital address such as an jpeg/picture or by extension even a physical asset. In practice this means that the asset original creator as well as all subsequent owners are registered on a public albeit secure (through cryptography tech) common ledger i.e. the blockchain.

Blockchain,  a trend topic of recent years – is a common ledger i.e. shared list/”book” which keeps track of each of the assets registered on the list: similar to real estate register.

the lists the present and past tokens or coins ownership as well as each transfer which is happening on the ledger. the reason this approach is also refered to as “defi” decentralized finance, is that the content of the blockchain/ ledger is spread out across the user base, which makes the ledger very difficult to manipulate as backups/consensus are kept across the whole user network. The listed address/blocks acts as a container of the tokens or coins which are units/traded across the chain the Most famous (there are now hundreds of blockchain with Coins and smart contracts such as BITCOIN,  ETHER, TEZOS  POLKADOT 

Crypto currencies each have their own ledger, protocol and platform which makes each and everyone completely independent from each other. In turn, in order to possess and multiple coins you usually need separate wallets/adresses on for each category of coins. Cryptocurrencies are usually governed by a specific set of rules programmed in their creation,- such as limited supply rules of governance and distribition and transfer across its network. The basis for the redistribution or rewards, can be different from blockchainn to blockchain : these mechanisms are called “consensus mechanisms”. the main types are:

• Proof of work: ” the blockchain ledger extenders/keepers so called “miners” are trying to solve very difficult mathematical puzzles in order to be the first to complete a block and be rewarded with cryptocurrency such as Bitcoin. This difficult puzzle is known as Proof-of-Work. One of the by-products of this system is it requires a lot of electricity and machines working on a problem in order to solve it. “For this reason why bitcoins ether chains are very energy intensive and not eco friendlz
• Proof of stake: “is trying to achieve the same outcome as Proof of Work: to help verify transactions on the blockchain. However, the difference in Proof of Stake is the miner of a new block is chosen by the network – instead of the miner being the first to solve the puzzle”

source: https://decrypt.co/resources/proof-of-work-vs-proof-of-stake

Crypto Wallets are small Apps which help the user access/manage (e.g. send, receive, destroy a.k.a. “burn”) their tokens coins associated with their adresse. And while the address and its content records remain open to the public – however the wallets owner (can) remain anonymous. In the blockchain jargon users differentiate beween “hot”/”cold” wallets which refers to the wallet state/security online: whether it is active only when installed/connected physically to the net via a “USB key” for example or whether the wallet is “hot” : always online /active on the blockchain.

Smart Contracts are additional functionalities “coded contracts” which are implemented on some specific blockchain protocols. Smart Contracts are constituted of IF and THEN statements. This allows for interesting new features such as transferring transaction under specific circumstances (e.g. swap conditions). Some real world applications can already be seen in the world of NFT trading – where a the smart contracts allows for royalties automatically being transferred to the original content creator whenever the NFT is reused or resold to a new owner,