NFT Development: Introduction to Blockchain & NFTs With Josh Henry – NFT Development Lesson 1
Josh: So this is the first lesson for nft development I’ll be doing the introduction for blockchain and nfts. I’m Josh Henry the head of development at TokenMinds. So yeah so about non-fungible tokens this is all about nft and these are the topics we will discuss.
Chris: I think the risk that’s about the address yeah right so before anything else before we start our formal lessons all for those who just started and joined in in our webinar lessons is actually the fourth lesson so let me introduce ourselves so we are TokenMinds we are a full-service web agency wherein we have already been in the space for since 2016 so it back then there were only ICOs, IEOs, IDOs more on token and coin sales and now venturing into nft so we work with different clients over 100 projects as of the moment, yeah and here is Anchor, Anchor TM here is our marketing head for TokenMinds, and I I’m the community lead for the Community Management of all our client’s projects and Josh Henry here is our head of development so in terms of I.T needs blockchain smart contracts Etc so they are the ones managing it so yeah Josh take it away again.
Josh: okay thank you very much, Chris, for that introduction about the company and what we do so for me I would like to introduce myself I am Josh Henry I am a crypto enthusiast I’ve been in the space since 2015 I guess 2015 2016. I started out as a developer and right now I’m leading the development department for token mines we are building a lot of crypto and web3 products in the past year and we are excited to share with you what we’ve learned so far in this series of lessons that we will do about nft development and I hope everyone will be interested to pursue a career in development and then build cool things because as we all know web3 is just starting we are not even we are not even on the early adoption part we’re still starting web3 and metaverse is still undefined as of now, there is a lot of definition, a lot of projects going on but it’s not really taking a real shape of the moment. The number of applications and use cases for this technology is enormous and I’m very excited to be part of the first early adopters and I hope you are as well. So let’s move forward with our topic introduction to blockchain and NFTs so to be able to understand nfts in general you need to understand a few topics so this is designed this course is designed for those people who are just jumping into blockchain so we try to explain the jargons the technicalities of blockchain in a more layman’s term for everyone to understand it and you have a grasp of how blockchain works and how you can use it or build a career around it so these are the topics that I will discuss the first one is blockchain overview, I’ll be explaining to you what blockchain is how it works in the most layman or most common way that is possible to explain it without the jargons and all the technicalities around it. Second, we’ll discuss smart contracts of course blockchain revolves these days revolves around smart contracts and nfts as well so you need to understand smart connects to be able to understand nfts lastly we need to understand non-fungible tokens what’s the difference between fungible and non-fungible tokens and lastly we’ll try to explore nft marketplaces. Okay so let’s start with blockchain, so a blockchain is a distributed database that is shared among the nodes of a computer network technically there’s nothing new about having a database we all use a database these days it is the web 2.0 web one most of its user database in most of the products that they have Yahoo Google they have databases the difference is those databases are called centralized databases. What does that mean? It means that a single company or a single organization or even a single person owns that particular database which means that whatever we put inside those database are information our data they own it like Facebook for example there’s a lot of controversy surrounding the business model of Facebook or and if you use Facebook for example and then suddenly you just say something about a refrigerator for example and then you will notice you will see a lot of ads about refrigerator, so the data that they acquire from their users is their actual business so not everyone understand the problem that entails right like I don’t even care if Facebook has my name all of my details but in reality it’s actually a vulnerability like for example if you are if your data is hacked by a certain firm like one of my experiences is I gave all my data to a certain organization and then suddenly a lot of telemarketers are calling my number which is a pain this is actually a breach of the Privacy Act that is one thing that the blockchain can help you with. So before we dive into the blockchain we need to understand centralized database for those people who are not of the I.T background or doesn’t have any background in Information Technology this is a good source for you to have because I will explain to you as simple as possible how everything works if you will see here on the left side that is how a centralized systems or database usually work you have a database this circular like cylinder here is a data is a representation of a database let’s see and then the computer on the bottom represents the end user like you for example accessing Facebook you need to access the apis the Facebook apis and then the Facebook databases where in all of the information the comments the likes the subscriptions are restored if something happens to this database we’re doomed right, one time we all experienced a few years ago that Facebook was hacked and everything is messed up so the difference between centralized and decentralized as mentioned is centralized database somebody owns whatever is inside it however on the centralized database on what you can see on the right side right there are multiple copies of the database which we call nodes and majority of the users there are multiple people who have copies of that particular nodes. Additionally, the majority of the popular blockchain is public you can see the trans for example for Ethereum you can see the transaction records in ether scan so there is a sense of transparency in terms of the data and the transactions that are being carried upon this particular network. Okay so if you would see there are multiple people are nodes that are technically a person I’ll explain to you later how it works there are multiple entities that have copies of the database and they validate any transaction through a certain consensus mechanism later I will be explaining to you what consensus mechanism is so right now you will see that on a centralized database, there’s only one governing body or organization or whatever that holds the data. However on the blockchain, everyone has a copy of it and these guys need to agree upon any transaction that happens in the network in a certain mechanism called the consensus mechanism, okay? So going back before we understand everything that is in here in a thorough manner we need to understand what a block is so the unit that defines a blockchain is called a block okay so think of it this way it’s a box it’s a block okay in a simple manner that block contains data, a hash and the hash of the previous Block, so for example, this is a good example actually, for example, we’re using a decentralized or a blockchain address book right so we have an address book what does the address book is what they have it’s it has the first name and the last name. Is it possible to annotate applications here let me see okay going back so on the first block you will see that there’s a digra the first name and the last name, the hash is like the transaction number the hash of the previous transaction is in this case is zero, zero since this we consider this as the first record so in blockchain we call the first block the Genesis block so whenever you hear the jargon the Genesis block it means the first block in a certain blockchain, so for example this record has been input in the blockchain, it has been processed and the hat this is the hash so this is the transaction number let’s call it transaction number or for simplicity sake the hash is like a transaction number so the next transaction like record number two you will also input a data the first name and the last name the hash of this transaction and the hash of the previous transaction if you will see the hash of the previous transaction is the hash of the first block right it is chained as you will see this data is chained from each other which means you cannot easily tamper any record because it has a reference point from the previous record so Josh what happens if somebody tampered in this particular block so for example somebody tampered with one block every time you create a transaction in the blockchain the hash changes so that means the hash already changed and if the validators or the nodes through the consensus mechanism says oh this is not the same so they will reject this record so that is why most people will say oh it’s really hard to hack a blockchain database which is true because of this particular mechanism that is why blockchain is called blockchain because it is a chain number of blocks okay, so previously originally everything worked in the proof-of-work mechanism what does that mean going back here what happens is if somebody transact in the network right if somebody transacts in the network all of the nodes or majority of the nodes needs to validate that transaction in a certain consensus mechanism called a proof of work okay so the proof of work is a decentralized consensus mechanism that requires members of a network to expand effort solving an arbitrary mathematical puzzle to prevent anybody from gaming the system so that means for example one of the networks that uses proof of work as of now is Bitcoin for example like transact in the Bitcoin network it runs through a validation using proof of work and usually proof of work will require the help of a cryptocurrency mining rig, so a mining rig is building or purchasing an equipment usually it’s actually a computer to solve a mathematical problem for the proof of work consensus mechanism and eventually be rewarded by doing. So originally since blockchain is decentralized people would build multiple numbers of cryptocurrency mining rigs to be able to join the consensus mechanism and then get rewards from it, that is why it’s called mining, so every time a transaction is validated and problem if and a mathematical problem is solved the miners get a certain reward that’s why in Bitcoin before and even if Ethereum before you can mine Ethereum using this mining rigs, however, this is actually one of the concerns in blockchain since a lot of people are building computers and using a lot of energy they say oh blockchain is not sustainable because we’re using a lot of power for just a simple task which is in a way true that is why recently the majority of the modern blockchain networks like Ethereum switch to proof of stake, that is one thing that we will discuss in the next few lessons so if you want to research about POS you can already start doing so. So basically they eliminated all these mining rigs and then they just have certain validators wherein they pay in for example you have 100 Ethereum and you want to be a validator you have to join the validation network and then there’s no mining involved anymore however that also kills the decentralization of it so it’s actually a double-edged sword you solve the problem in terms of energy and then however you also remove the decentralization part which is basically the basically what blockchain is all about, so it’s actually a double-edged sword so it’s up to you guys if you want to research about that you can find a lot of resources in the Internet. So what is the first cryptocurrency? Technically Bitcoin is the first cryptocurrency this was a building in 2009 by a certain individual called Satoshi Nakamoto who is unknown as of now there are a few people who said they are Satoshi but I’m there’s still no agreement if that guy is so the max Supply is 21. I think 21 million BTC, and then recently in 2015 which is I think the reason why nfts is on the boom, Canadian Russian developer, and this guy Vitalik Buterin developed Ethereum to address the problem with Bitcoin. Ethereum introduced smart contracts, its max Supply is 18 million Ethereum. Okay so what are smart contracts so smart contracts is a transaction protocols to automatically execute or control or docent legally relevant events according to the terms of the contract so Bitcoin technically is just in a way a simple project or in you can do decentralization and transact using tokens however Ethereum took it to the next level wherein you can actually build logic around those transactions which is the smart contract so this automates all the processes in a transaction that is why you can stake your tokens now, you can do trading exchanging and different types of transaction these days because of the smart contracts and eventually all of the other blockchains followed the same format of adopting smart contracts so I actually have a link in here which I will be sharing with you on how does a smart contract looks like, so I’ll stop sharing this one and then I’ll share with you where is it this one can you see my screen? Okay so if you will see this is the smart contract, okay the smart contract is the smart contract contains all of the sorry about that let’s see okay so this is the smart contract for USDT all right so in ether scan all of the smart contracts that are being hosted in the Ethereum network you can see it on etherscan.io you can also see all the transactions in here and then the all of the details right you can see it over here okay you can see the contracts here check it out all of the details are in here, etc., so if you wanna check all the smart checks the contracts of specific tokens that you’re holding you can check it here so this is the actual contract you will see it in code here even the source code is here. Okay so don’t worry about it we will be discussing this in the next lessons on how you can build a smart contract of your own, so going back okay I’ll just move back to the presentation, okay so going back to the presentation we need to define what is fungible and non-fungible, so erc20 or erc20 standard which is the Ethereum request for comments 20. This is the standard for all fungible tokens in the Ethereum network. So what do fungible means? Tokens that have a property that makes it make each token exactly the same in type and value of another token example one Ethereum will always be equal to one Ethereum of another person so what fungiable means is it’s not unique right so your Ethereum your one Ethereum can be equal to one Ethereum of another person so that what fungibles means so er these are the the list of University 20 tokens you will see majority of the tokens that is currently popular and that is deployed in the Ethereum network or even other networks So eventually we go to the erc71 standard the erc721 standard introduces a standard for nft in other words this type of token is unique and can have different value than another token from the same smart contract so maybe due to its age rarity or even something else like its visual it’s called a non-fungible token is used to identify something or someone in a unique way this type of token is perfect to be used on platforms that offer collectible Items, access, lottery numbered seats for concerts, and sports matches etc. So what exactly are nfts in layman’s terms so it stands for non-fungible token non-fungible tokens are new type of digital token where every token is different and all unique characteristics so it has a unique characteristic every nft is unique because every NFT has its own transaction record you will see the hash so for example even though somebody copies the same art it will not be the same nft because it has a different hash because you know in blockchain there’s a transaction record that we always keep so what are the sample use cases so it can be used on verification of digital assets like painting, documents like land title, in-game items, music or songs and you can see art any of these these Days collectible entities etc., so these are the popular type of nft projects, one is of the most popular is the pfp or the profile picture nft which is the crypto punks, your board apes etc., a gaming nft which is for example x infinity and MResort and artwork nft like people’s artworks eventually why would you dive into space to blockchain and nfts if you don’t want to earn a little bit of money or more money or cash from it so there are a lot of ways to run from any of this one is investing or investing or learn long-term trading you can also play NFT games in earn rewards or you can be an nft developer where you can build different NFT decentralized applications as well and then earn from that particular skill which what we’re trying to teach right now and then eventually maybe if you don’t want to work for somebody else maybe you can launch your own project and build something on your own you may be proud in the future so that is other things that you can you can do with nfts this is more like an introduction so this is the end of the introduction to blockchain and nft scores, and I would like you to stay tuned to our next upcoming classes about solidity programming nft development smart contract development vulnerability and testing and that development so yep, that’s it for the for today’s lessons and I hope you learned something from this Chris.
Chris: Yeah thank you for that, very well said on each concept about blockchain in general so yeah so for guys see if you have any questions you can ask them now in the chat the voice chat channel questions guys yeah so any questions with regards to the introductory lesson on the blockchain I mean nft development?
Audience: Okay can you hear me?
Audience: Okay my question is about the fact that I think was it when you were talking about Ethereum and the POS are BP and p-o-w that’s the proof of work and all that, does this have any effect on the nfts?
Josh: You mean that just moving to a proof of work consensus mechanism has any effect on the nfts that you hold
Henry: Yep, there is so what will happen is you will have two nfts since after the merge you technically have two nfts one is for the Ethereum and then the maintained proof of work Ethereum which I think it is called Pao pow this is not the first time this happened back then there’s also a split between two I mean the single Ethereum, the Ethereum, and the Ethereum classic so you have double you have if you, for example, have 10 Ethereum right now or you have one bored ape NFT after the merge you basically have two of those on in two different networks.
Audience: Okay, okay all right thank you.
Josh: You’re welcome anything else?
Chris: Any more questions guys so feel free to okay so I’m seeing a question someone is typing in TokenMinds Academy voice chat so yeah feel free guys don’t be shy, this is the right time to learn, so any question is welcome.
Sajid: Hello I have a question.
Chris: Yep please go ahead, Sajid.
Sajid: Yeah so in real life what kind of problems can be solved using blockchain?
Josh: There are a lot of use cases as mentioned one of the most important use cases of blockchain, in my opinion, is the ability to for validation of certain documents and certain right now it’s more of the ownership of certain items right but eventually I think everything will move every one of the main use cases that were very usable in the future is the validation of certain documents may be, for example, diplomas may be concert tickets because using blockchain with this particular use cases is very important I mean it’s very efficient because it can’t be duplicated it can’t be forged however we are still a bit in a way I think it’s still a lot of work in terms of adoption but in my yeah as I said, in my opinion, this is one of the most important validations the validation of certain docents even including land titles these are interesting use cases but hopefully in the future, we can do adoption for this particular use cases.
Chris: Okay yeah so if actually just to share if you know if like example governments from different countries would be you know welcoming and adopting this technology this is really something good for example here in our country if you want to get your birth certificate for example so it’s really a pain in the ass because you need to line up with this Philippine statistics authority first and then get your piece of paper you know like the copy but then if it’s available already in the blockchain since you’re the only person with the same unique person as you are so it’s good to have those you know records as well, you can tokenize yourself right yeah so if they want to verify you can just show your NFT customer certificate, something like that yeah a single blockchain for all identification of every single individual in the world right easier to travel transactions.
Josh: Yeah imagine your passport is already nft, so that’s really a cool utility as well if the key there is the adaption so yeah right now people know they are not yet open but hopefully in the future, they will be yeah right.
Chris: Yeah so there’s another question by Neal so how the sharding help in the processing of transactions especially with large vole of information does it help with the determination of who wins in gas wars sharding.
Josh: technically it more of it’s outside the scope of this course but in any case I think I think it’s better we under we have like a separate discussion with this particular blockchain sorting topic because I think everyone wouldn’t be as knowledgeable as Neal in terms in this particular course, so yeah I think we can we can separate this from a different discussion but in terms of gas wars right now I don’t see any reason for gas wars anymore with the recent adjustments in the Ethereum blockchain, this might prevent the problem we have with gas wars before so yep let’s put this topic on a different discussion yeah but yeah please attend the topic I’ll let you know when that’s gonna be we can discuss sharding all right.
Chris: So any other questions guys so yeah for those who are not yet familiar with those terms for example so yeah it’s advisable you attend the next session so we will be discussing more in depth about you know blockchain technology in general because these are more on nft and blockchain development topics that we will have be having for the courses under Josh all right so yeah don’t be fearful oh I don’t understand what they are talking about something like that yeah this is basically why we invited you all into the TokenMinds Academy so you will be learning step by step we try to not to intimidate everyone so they will come back right so yeah stay tuned for the other the other discussion so we can discuss more of the more advanced topics in blockchain yeah and if example currently you are an IT student and then of course you’re also doing some development stuff in other programming languages so you may want to consider if you are an enthusiasts of web3 having a career in development in web3 as well so this is why we’re having this courses care of our head of development Josh. Yeah, any other questions guys before we end the session okay so if there are no more questions so I would like to thank every one of you for coming in today next week we will also have another discussion so that’s under me, so last time we’ve had an advanced server set up discussion for Discord Community setup, so this is more on the Community Management side of things so there will be the part two on next week Monday 5 p.m. so hey hopefully I’ll see you again there soon okay so if you missed the first episode of that we will be uploading that first lesson in the TokenMinds academy forum channel, so watch out okay. So if there are no other questions guys so we can end this lesson today so we’re very productive we’d like to thank you, Josh, as well and everyone for coming yeah so I have a good night everyone thank you hope you all enjoyed this lesson for today bye-bye.
Audience: Yes we did thank you very much yeah thank you thank you.