The blockchain can be defined as a decentralised, distributed and (most of the time) public ledger.
When compared to a traditional database, a blockchain stores information as a growing list of records that is shared by all the computers that form part of the network.
In simple terms, it is a public record of all transactions, which is validated by all the members who decide to set up a node in the network, eliminating the need for a trusted third party for verifying such transactions.
The “blocks” in the blockchain are linked together using cryptography. Each block stores information about the previous block, creating the ‘chain’. This makes blockchains resistant to modifications since changing the data of one block will require the previous block to be altered as well, and so on.
Thanks to the ability of a blockchain to function without a centralised server or authority, it has become the new technological invention allowing many decentralized projects to be developed and pushing the next evolution of the web as we know it today.
Current dominant blockchains
As this is still the early stage of this technology, there is a current race among some of the biggest blockchain companies and developers to build the systems that will dominate in the future. Here is a couple of them relevant for the NFT landscape:
- Ethereum - Open-source with smart contract functionalities. Running the second most popular cryptocurrency, and hundreds of other applications built on top of it.
- Solana - Strong competitor of Ethereum. Also supports a vast market for NFTs.
- FLOW - Created by Dapper Labs, the team behind CryptoKitties and NBA Top Shots.
- Cardano - Developed by co-founders of Ethereum. Peer-to-peer transactions and proof of stake network.
- Tezos - Similar to Cardano and Solana. Proof of stake network.
Coins vs Tokens
Because most people are familiar with the blockchain thanks to the rise in popularity of cryptocurrencies, it’s important to make a distinction between coins and tokens.
A crypto coin is the native coin of a certain blockchain. ETH is, for example, the coin from the Ethereum blockchain. They are only used for transactions within their native blockchain.
- Coins operate on their own blockchain
- They are digital currency/money
- They can be ‘mined’, which is a system of earning coins by contributing to the network.
A crypto token is the wider definition of any digital unit of value that lives on the blockchain. Under this definition, a coin is a type of token (a payment token in this case). There are different types of tokens, including:
- Payment tokens
- Utility tokens
- Security tokens
- Non-fungible tokens
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NFT Community terminology
Acronyms and terms commonly used by people in the NFT and crypto space. Useful to make sense of online conversations on Discord, Twitter, Instagram, etc.
This is a list of useful definitions for the most common terms encountered in the blockchain, crypto and NFTs space.
NFT communities have certain ways of communicating and building their membership count.
Popular and famous NFT collections
This is a list of NFT collections that have achieved mainstream success and are now considered solid investments. In the NFT space, some of these are referred to as ‘blue chips’.
Most NFT projects are ‘collections’ – a set of NFTs which are all based on the same concept.
February 25, 2021
Non-fungible tokens (NFTs)
A non-fungible token or NFT is a unique and non-interchangeable unit of data stored on a digital ledger (blockchain).