Web3 and NFT explained
By Matthew Bartlett, NFT and Web3 Community Manager
Matthew Bartlett, NFT and Web3 Community Manager, explains what you need to know about Web 3.0, the underlying technology and NFTs, including the ownership process and associated fees.
At VanEck, we regularly create resources to educate investors on economic growth around digital assets and cryptocurrencies. To help you learn, Matthew Bartlett, NFT and Web3 Community Manager, has launched a series of videos to help you navigate Web 3.0 and NFTs.
What is Web 3.0?
Web 3.0 refers to the third evolution of web technologies and encompasses decentralized applications that run on the blockchain, including non-fungible tokens (“NFT”) and cryptocurrencies.
In this “Crypto Clarified” video, Matthew breaks down the evolution of web technologies since the 1990s and explains the major differences between Web 3.0 and Web 2.0.
What is Blockchain Technology?
blockchain technology is the backbone of Web 3.0 and refers to a transparent ledger system consisting of a series of blocks containing verified transactions. Entries are immutable, meaning they cannot be erased once placed on this distributed ledger.
Matthew compares blockchain technology to glass vaults in a bank vault. A bank vault contains rows of deposit boxes. Each drop box is made of glass, which allows people to easily view the contents of the box, although they do not have access to the contents of the box. A person opening a chest will receive a key specific to that chest. They do not own the box, although they now have access to the contents of the box. Similar to those glass boxes, a blockchain contains content that others can see and verify, but cannot modify.
How does NFT ownership work?
An NFT is a unique digital asset enabling digital ownership through blockchain technology. NFTs are non-fungible, meaning they cannot be duplicated or counterfeited and cannot be exactly equal to another NFT.
The main current use case for NFTs is the ownership of digital art, games, and collectibles. However, Matthew also discusses new and emerging use cases for NFTs to tokenize physical assets, such as art and real estate. In other words, NFTs are starting to have more real-world utility.
What is Ethereum gas?
Ethereum is one of many decentralized open-source blockchain software and technology platforms that enable peer-to-peer or “smart” contracts as well as decentralized applications.
In this “Crypto Clarified” video, Matthew explains Ethereum Gas, which refers to the fees required to complete a transaction on the Ethereum blockchain. These fees follow the laws of supply and demand and may vary from transaction to transaction.
What does Fungible mean in Non-Fungible Token (NFT)?
Each NFT is one of a kind and refers to a unique entry on a blockchain. This uniqueness is what makes an NFT “unfungible” and is a key characteristic of its usefulness in the real world.
On the other hand, a fungible good can be replaced by a similar object. To explain the difference, Matthew uses the example of a ten dollar bill versus a plane ticket. A ten-dollar bill is fungible because it can be reproduced with another ten-dollar bill, or by different combinations of five-dollar bills and one-dollar bills. Now consider an airline ticket, which has a unique confirmation code, date, time, and seat number. If someone tries to steal your seat, you can quickly show ownership of that seat with your ticket.
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IMPORTANT DISCLOSURES
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Parts definitions
Ethereum is a decentralized and open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, Ether is second only to Bitcoin in terms of market capitalization.
This is not an offer to buy or sell, nor a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not imply the provision of personalized investment, financial, legal or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, speak as of the date of this communication and are subject to change without notice. Information provided by third party sources is believed to be reliable and has not been independently verified as to its accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information contained herein represents the opinion of the author(s), but not necessarily that of VanEck or its employees.
In consideration for receiving non-fungible tokens (“NFTs”) from VanEck, you represent, acknowledge, agree and covenant that you received the NFTs as a gift from VanEck. You have not paid any consideration, monetary or otherwise, for the NFTs.
You may receive an NFT as a gift from VanEck. You pay no consideration, monetary or otherwise, for the NFT.
NFTs are not an investment. Rather, NFTs are digital memories intended for entertainment purposes only. As entertainment memorabilia given to you as a gift, NFTs have no value and are not intended by VanEck to have any value. Neither VanEck nor anyone else will take or take any current or future action designed in any way to maintain the value of the NFTs, or to grow or increase their value. You should not attempt to obtain an NFT from VanEck if you consider it an investment.
As a condition of receiving the NFTs, you must hold the NFTs for your own personal benefit, and you must not, and do not act, on behalf of any other person or entity; except that, if you are an affiliate of an entity or person whose relationship or affiliation you informed VanEck of prior to receiving the NFT, and VanEck consents to your receiving an NFT, you may receive an NFT. You must not sell, assign, alienate, lease, lend, split, repossess, convey or in any way transfer the NFTs (or any interest therein) to any other person or entity, including a corporation. affiliate. Any sale, transfer, assignment or other action referred to in the preceding sentence will be void. You should not attempt to obtain an NFT from VanEck if you plan to sell or transfer it.
Cryptocurrency is a digital representation of value that functions as a medium of exchange, unit of account, or store of value, but it is not legal tender. Cryptocurrencies are sometimes exchanged for US dollars or other currencies around the world, but they are generally not backed or backed by any government or central bank. Their value is entirely derived from market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency can be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which can lead to the possibility of permanent and total loss of value of a cryptocurrency. particular currency if the market for that cryptocurrency were to disappear. Cryptocurrencies are not covered by the FDIC or the SIPC. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.
Investing in cryptocurrencies involves a number of risks, including volatile market price fluctuations or flash crashes, market manipulation, and cybersecurity risks. Additionally, cryptocurrency markets and exchanges are not regulated with the same controls or client protections available in stock, options, futures, or currency investments. There is no guarantee that someone who accepts cryptocurrency as payment today will continue to do so in the future.
Investors should conduct thorough research on the legitimacy of each individual cryptocurrency, including its platform, before investing. The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical or difficult to understand or evaluate. Cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using sufficient computing power to overwhelm the normal operation of the cryptocurrency’s blockchain or other technology under -lying. Certain cryptocurrency transactions will be deemed to have occurred when recorded on a public ledger, which is not necessarily the date or time at which a transaction may have been initiated.
- Investors must have the financial capacity, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire cryptocurrency investment.
- An investment in cryptocurrency is not suitable or desirable for all investors.
- The cryptocurrency has a limited operating history or performance.
- The fees and expenses associated with investing in cryptocurrency can be significant.
There may be risks posed by the lack of regulation of cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should do thorough research before investing in cryptocurrencies.
The information provided by Van Eck is not intended to be, and should not be construed as, financial, tax or legal advice. This is not a recommendation to buy or sell an interest in cryptocurrencies.
Any investment is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that the investment objectives will be achieved and investors may lose money. Diversification does not guarantee a profit or protect against loss in a declining market. Past performance is not indicative of future results.
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