NFT Tutorials

NFT - Understanding Blockchain

Understanding Blockchain

A Blockchain is a data structure that stores transactional records while maintaining security, transparency, and decentralization. You can alternatively think of it as a chain of records kept in the form of blocks that are not under the jurisdiction of any one authority. A blockchain is a decentralized ledger that is accessible to anybody on the network. It is incredibly impossible to modify or alter information after it has been saved on a blockchain.

Every transaction on a blockchain is authenticated by a digital signature. Because of the use of encryption and digital signatures, data kept on the blockchain is tamper-proof and cannot be altered. Blockchain technology enables all network participants to reach an agreement, known as consensus. All data maintained on a blockchain is digitally recorded and has a common history that all network participants can view. This removes the risk of fraudulent activity or transaction recurrence without the need for a third party.

Consider the following scenario: you need to send money to a friend who lives in another nation. A bank or a payment transfer app, such as PayPal or Paytm, are two popular possibilities. This option involves the use of third parties to complete the transaction, and as a result, a fee is deducted from your cash. Furthermore, you cannot ensure the security of your cash in such cases since a hacker might disrupt the network and steal your assets. In both cases, the client suffers. This is where Blockchain technology can help.

When we utilize a blockchain instead of a bank to transfer money, the procedure becomes considerably easier and more secure. There is no additional charge because the money is processed directly by you, removing the need for a third party. Furthermore, because the blockchain database is decentralized and not restricted to a single place, all information and records stored on it are public and decentralized. There is no risk of information tampering by a hacker because the data is not kept in a single location.

Beginner 5 Hours

Understanding Blockchain

A Blockchain is a data structure that stores transactional records while maintaining security, transparency, and decentralization. You can alternatively think of it as a chain of records kept in the form of blocks that are not under the jurisdiction of any one authority. A blockchain is a decentralized ledger that is accessible to anybody on the network. It is incredibly impossible to modify or alter information after it has been saved on a blockchain.

Every transaction on a blockchain is authenticated by a digital signature. Because of the use of encryption and digital signatures, data kept on the blockchain is tamper-proof and cannot be altered. Blockchain technology enables all network participants to reach an agreement, known as consensus. All data maintained on a blockchain is digitally recorded and has a common history that all network participants can view. This removes the risk of fraudulent activity or transaction recurrence without the need for a third party.

Consider the following scenario: you need to send money to a friend who lives in another nation. A bank or a payment transfer app, such as PayPal or Paytm, are two popular possibilities. This option involves the use of third parties to complete the transaction, and as a result, a fee is deducted from your cash. Furthermore, you cannot ensure the security of your cash in such cases since a hacker might disrupt the network and steal your assets. In both cases, the client suffers. This is where Blockchain technology can help.

When we utilize a blockchain instead of a bank to transfer money, the procedure becomes considerably easier and more secure. There is no additional charge because the money is processed directly by you, removing the need for a third party. Furthermore, because the blockchain database is decentralized and not restricted to a single place, all information and records stored on it are public and decentralized. There is no risk of information tampering by a hacker because the data is not kept in a single location.

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Frequently Asked Questions for NFT

An NFT (Non-Fungible Token) is a unique digital asset stored on a blockchain, representing ownership of digital or physical items like digital art, music, or collectibles.

Investing in NFTs can be profitable but carries risks. Factors like NFT rarity, market demand, and the reputation of NFT creators influence value.

The most expensive NFT sold is "The Merge" by Pak, fetching $91.8 million. Another notable sale is Beeple's "Everydays: The First 5000 Days," sold for $69 million.

NFT flipping involves buying NFTs at a lower price and selling them at a higher price for profit, requiring market knowledge and timing.

An NFT collection is a series of related NFTs, often with shared themes or characteristics, like the Bored Ape Yacht Club.

NFT utility refers to the functional benefits an NFT provides, such as access to exclusive content, events, or services.

You can buy and sell NFTs on NFT marketplaces such as OpenSea, Magic Eden, and LooksRare, which operate on various blockchain networks.

NFT tokenization involves converting real-world assets into NFTs, enabling digital ownership and trading on the blockchain.

NFT rarity refers to how uncommon an NFT's attributes are within a collection, affecting its desirability and market value.

Gas fees are transaction costs on the blockchain incurred during NFT minting or transfers, varying based on network congestion.

NFT fractionalization allows an NFT to be divided into smaller parts, enabling multiple investors to own a fraction of a high-value asset.

 Minting an NFT involves converting your digital file into a token on the blockchain using smart contracts, making it purchasable and tradable.

An NFT roadmap outlines the future plans and developments for an NFT project, providing transparency to investors and the community.

An NFT airdrop is a distribution of free NFTs to wallet addresses, often used for promotional purposes or rewarding community members.

NFT provenance tracks the ownership history of an NFT, ensuring authenticity and verifying its origin.

NFT metadata contains information about the NFT, such as its name, description, and properties, stored on or off the blockchain.

To create an NFT, you can use NFT marketplaces like OpenSea or Rarible, where you upload your digital art or content and mint it using smart contracts.

NFT royalties are payments made to NFT creators each time their NFT is resold, enforced through smart contracts.

NFT staking allows holders to lock their NFTs in a platform to earn rewards, integrating DeFi elements into NFT ownership.

An NFT wallet is a digital wallet like MetaMask that stores your NFTs and allows interactions with NFT marketplaces and blockchain applications.



The NFT floor price is the lowest price at which an NFT from a particular collection is available on the market.

NFTs derive value from their uniqueness, ownership proof via blockchain, and demand in the digital art and collectibles markets.

NFT lending allows NFT owners to use their assets as collateral to borrow funds, integrating DeFi mechanisms.

NFTs are subject to taxation, with implications for NFT taxes depending on your jurisdiction. It's advisable to consult with a tax professional.

NFT insurance provides coverage against potential losses or damages to NFTs, offering security to investors.

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