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Hello there! It’s me again – Ivan. 😀
In our previous two articles, we talked about the basics of NFTs and blockchain. Now it’s time to continue digging a bit deeper!
Smart contracts are computer programs that make NFTs possible. A smart contract is essentially a computer program that is written specifically to run on a blockchain in order to verify authenticity, automate transactions, update ownership information, pay royalties, and so forth.
We talked about blockchains earlier. The Ethereum network is the largest smart contract-enabled blockchain. However, the king of all blockchains, Bitcoin, also has some smart contract capabilities and more are being developed.
Other blockchains that run smart contracts include Binance Smart Chain (BSC), Solana, Cardano, and several others.
One of the important aspects of smart contracts is that they can be used to outline the rights that come with an NFT.
As we mentioned in the previous article, everything is forever in a blockchain database. The record for every NFT contains all the ownership information dating back to the day it was created.
When an NFT is sold, the smart contract automatically updates this information and transfers the item to the new owner’s wallet.
The authenticity of an NFT can be easily proven by looking up the contact address on the blockchain. There, the potential buyer can see the creation and sale history.
Another benefit of smart contracts is that they are extremely secure.
It would be nearly impossible to hack a smart contract without vast amounts of computer power. Thus, hacking one is not worth the effort.
The term mint was originally coined – if you’ll excuse the pun 😉 – to mean the stamping of an actual coin out of a sheet of metal. Since then, this word has been adopted by makers of collectibles.
You might also be familiar with the term mint condition. The term implies that a collectible item is in its original condition. For example, an antique Hot Wheels car that is in the same condition as the day it rolled off the showroom floor is said to be in mint condition.
In recent years, with the advent of blockchain, the word mint has been expanded to include the moment of creation of either multiple digital coins or a single nonfungible token or NFT.
We can’t talk about minting NFTs without talking about something called gas fees. Just like gas is required to run a car, gas fees are required to run a smart contract. When we buy gas for a car, we pay for it at the gas station.
When we buy gas for our smart contracts, we pay blockchain miners.
Miners are the owners of computers that process transactions and run smart contracts on the blockchain. Important to know is that gas fees can vary wildly from blockchain to blockchain.
That’s it for this time! In our next article, we will talk about WEB3. 🙂
The article was written by: Ivan Markov, NFTartXpert