Apprentice Justin – Smart Contracts, NFT’s, and Decentralization.
Hi everyone and welcome back to the Apprentice Justin series Smart Contracts, NFT’s, and Decentralization on TheCryptoGarage.com
In my previous post, “Blockchain, Earn, & Wallets” I explored exactly what a blockchain is and how it can be used. I also discussed various ways in which you can earn cryptocurrency. I also talked about how to store it in different types of crypto wallets.
This time I’m going to be discussing smart contracts and dApps. I’ll talk about defi, and how we use it in today’s world. I’ll also go over more about NFT’s and how to own and store them. Finally, I’ll discuss decentralization and what types of industries are built on the concept.
What are smart contracts and dApps?
Have you ever bought a car, a house, or anything that may have required you to sign a contract? If so, you’re already halfway to understanding smart contracts.
A smart contract is just like the contract you signed that explained the process of you paying back a loan you took to pay for a car. It detailed every rule in the contract that needed to be followed.
Smart contracts are the same thing, but digital. They are essentially a computer program that automatically executes a contract’s rules so that a transaction is processed properly.
What are dApps
It’s hard not to come across the word dApp. dApps are essentially smart contracts. The only difference is that a dApp will have a user interface that you can interact with.
A great example of a dApp would be anyone of the blockchain-based online games you can find popping up now. These are smart contracts that have a user interface. In this case, it’s an interactive game that interacts with the smart contract.
A dapp could also be a coin’s website where you visit to purchase or stake your crypto.
Smart contracts are basically just a page of code. Whereas dApps are that code with a UI that you can use to interact with the smart contract.
How do we use Defi?
I rent the land that my current house sits on. Each month I have to pay the owner a fee for this. Each method, besides cash, has to involve an intermediary. Something like a credit card processing company or a bank of some type to accept that value and store it.
I can show the owner of the land my debit card all I want. But he can’t do anything with it without some sort of middleman to make that process take place.
defi is designed so that the need for a middleman to accept and transfer that value is removed. Customers and businesses can now make transactions directly with one another. Without the need for a financial institution of some kind overseeing any part of it.
In order to pay someone with my credit card, there has to be a credit card processor to make that transaction happen. Decentralized finance removes the processor so now two parties can agree on a smart contract and deal directly with each other.
How do you own, create, and store an NFT?
NFT’s are gaining in popularity and reach more so than ever before. Millions of dollars are being spent on some of these earliest examples of NFT art.
If you are like me, you’re interested in how you can get a hold of one of these digital files. Let’s check out the world of NFT’s, how we can get one and where we can keep it.
If you’d like a more detailed look into NFT’s check out this article
Every day it seems there are new places to purchase an NFT. The process is pretty simple, just like any other transaction. You’d connect your wallet, select an NFT item you’d like to own and make the purchase.
In order to connect to sites like opensea.io or Crypto.com you’ll need to have a browser wallet like Metamask installed. Once you connect that, you’ll be able to buy and sell NFT’s.
Your NFT will be stored in the wallet you used to purchase it. Until you transfer it or sell it again.
So the best way to get your first NFT is to create it. To do this I’m going to use Opensea.io as an example. It’s fast, easy, and free to create and then sell your NFT.
In order for you to accomplish this, you’ll need to have a browser-based wallet. Metamask is a good one to set up so you can interact with the opensea.io website.
Creating an NFT
I’ll assume this is your first NFT creation. Before you can create an NFT you’ll have to create a collection to house the NFT’s that you create. From this collection, you’ll be able to sell any NFT that you have in the collection.
Each collection you create acts like a mini NFT store. People can come and purchase anything you have listed for sale in that collection. Every time someone buys your NFT you will continue to get royalty payments. This is a percentage of your choosing. It is deposited once a month to the ETH address you used for payments from that collection.
So, click on the colored circle in the top right of the page and select my collections
Next, you’ll be asked to upload your images for your collection’s profile image and cover art. Make sure you edit your image sizes with an editor first. It will look the best if they match the recommendations they offer.
Once you’ve entered your images you’ll be asked to fill in the details of your NFT. You can specify different options that come along with your NFT. Things such as an extra file only owners have access to. If you’ve created a website dedicated to your art or your NFT collection you can also enter that here too.
You’ll now enter the royalty amount you’d like each file in that collection to earn. Select which blockchain to list on, and click create. If you don’t want to pay any gas fees to create and list your NFT. Make sure to select Polygon blockchain. You’ll also be making sure to do this when you create your NFT. Otherwise, you’ll be surprised with a bill for fees that could go over $150!
Creating an NFT on Opensea.io
Once you’ve created a place to house your NFT’s. You’ll be ready to create your first NFT.
We’ll once again look to the top right and now click on “Create”. There are really only 5 form questions to complete including uploading your file. Opensea.io supports turning these file types into NFT’s: JPG, PNG, GIF, SVG, MP4, WEBM, MP3, WAV, OGG, GLB, GLTF. with a Max file size of 40 MB.
You’ll first be asked to upload your file and give it a name.
Decide on how many copies you want to release. It’s up to you but the NFT’s in my collection I’ve created don’t have more than 10 copies of each.
To change the number of copies you first have to select the Polygon Blockchain in the dropdown menu. Then the supply will be editable.
It’s really very simple to do and takes less than 2-3 minutes.
Once you’ve clicked submit you’ll be asked to sign the transaction with your wallet. You then see that your NFT’s have been minted and be brought to your NFT’s profile page.
From here you can now list it on the opensea.io marketplace. Remember we used Polygon blockchain? It’s totally free besides a fee that is taken out of the total purchase price. They take the fee when it sells so no hassles and nothing out of pocket.
Now you should have your first NFT created and housed in your collection!
What is built upon decentralization?
Defi or decentralized finance is just one use of decentralization. Decentralization is best described as the transfer of power and authority from a central government to the private sector. This process can be applied to many areas such as political, financial, and economic markets.
In terms of cryptocurrency, decentralization is removing government and private financial institutions from having total control over someone’s personal finances. Allowing them to freely earn, spend, and save it.
This concept of giving back control of a person’s personal life can be used in all sorts of ways. From finances to personal medical records to housing data. The usages seen today are developing within an ecosystem that is still very young. It will surely grow into being used to create new decentralization frontiers as it ages.
In my next post, I shall look back at what I have covered so far – what the scope of the learning was and make an assessment as to my basic Crypto knowledge since the learning. One other important part of learning I shall look into is how do I keep updated on Crypto, where do I learn further and perform more detailed research?
I’m going to look at how I find further learning/information and conclude with the last two articles which I will concentrate on.