An NFT or a non-fungible token is a certificate of ownership of a digital asset that lives on the blockchain. Just like in the real world you can own many things like your car (bill of sale), or your house (deed), an NFT can also represent ownership of many different things such as a plot of land in the metaverse, digital art, a digital membership, or a certificate of ownership of a physical good.
Web3 or web3.0 are used synonymously to refer to the blockchain and the decentralized technology ecosystems.
The three core principles of web3 are: Trustless = Law is written in code and automatically executed; Permission-less = Anyone can participate without the need for an approval process; and Decentralized = No intermediaries, buyers and sellers connect directly.
The blockchain is a shared, immutable (unchanging over time) ledger that stores data of any kind. It records transactions and tracks the ownership of assets that may be both tangible (e.g. a house) or intangible (i.e. copyrights).
Blockchain technology: usually contains financial transactions is replicated across a number of systems in almost real-time usually exists over a peer-to-peer network uses cryptography and digital signatures to prove identity, authenticity and enforce read/write access rights has mechanisms to make it hard to change historical records, or at least make it easy to detect when someone is trying to do so.
DeFi is short for Decentralized finance, an emerging set of technologies, applications and companies that aim to build the financial infrastructure on the blockchain. Similar to traditional finance, DeFi users have a need to lend, invest, borrow, pay and transact money or tokens in order to collaborate and build an open trade ecosystem.
Decentralization is the chief difference between DeFi and TradFi or traditional finance (Visa, Banks, central banks, etc.). Within web3 lenders and borrowers are able to: Directly connect with each other through the use of protocols, no middlemen needed; All historical transactions and information is openly accessible by anyone, thus providing a leveled playing field; The money in your account is yours, you own your account and your money (tokens), no one may access those funds without your permission; You can send and transfer funds in seconds without any approval.
A cryptocurrency is any form of digital coins or tokens that exist to provide an exchange of value in the blockchain and web3 ecosystem. Behind every cryptocurrency is a software protocol that allows people to transfer money over the internet. The software is shared across computers all over the world, creating a global network. Computers in this network validate transactions using a blockchain, that records every transaction that has ever occurred on the network.
Bitcoin was the world’s first cryptocurrency, but others like Ethereum, Cardano, Shiba Inu, Solana etc. have also reached some measure of adoption.
ETH is the currency/token of the Ethereum blockchain which allows anyone to build applications on top of the Ethereum blockchain. Ethereum is widely used by the web3 community because it allows applications to easily interact with each other (composability) allowing for more compelling technology and business cases to be created on top of a singular platform.
ETH is created by rewarding (paying) miners who provide computational power and resources every time a new block (data entry) occurs on the Ethereum blockchain, and individuals pay Gas (transaction fees) every time they perform a transaction using the Ethereum network.
Individuals can send, receive, and hold ETH to exchange and transact with protocols and businesses in the blockchain, or for speculative purposes. Today, ETH is the most popular cryptocurrency used to purchase NFT’s.
Gas refers to the transaction costs for using the Ethereum blockchain. Every time a transaction occurs in the Ethereum blockchain, it uses energy and incurs computational costs. As a result, every transaction is charged a small Gas fee to process that transaction.
All of your crypto assets are stored on a blockchain and accessed via an account. A wallet is a way of storing your private keys to that account, which are used to authorize transactions with your digital signature on the blockchain. There are many kinds of wallets available, but they can be specific to the type of crypto you are purchasing. For ETH, which R Planet NFT uses, some common wallets are
Familiarize yourself with what common phishing and scams look like int the NFT space and check out our ‘How to stay protected page’. In short, don’t trust random links, stay skeptical, and level up your personal security and passwords. The main thing to remember is to NEVER, EVER EVER share your secret seed phrase with anyone.