The crypto glossary of nftkontor provides explanations of terms and FAQs from the crypto world around the topics of NFT and blockchain

To put it simply, each blockchain consists of a chain of data records that are managed and calculated by all computers in the network. A copy of the encrypted data ends up on every connected computer. This means that falsification or even deletion of the data is no longer possible.
Every computer can become a node and thus a full-fledged part of a blockchain network. This is because the database itself, i.e. the blockchain, is distributed among many so-called nodes (or clients), each of which stores the entire blockchain. The nodes receive and check each transaction with the appropriate software and send it on. To do this, the software contacts other nodes to pick up or submit info and is itself a building block of the network. Anyone can operate a node, because the various nodes do not have to trust each other to ensure consistent data.

Smart contracts actually have nothing to do with contracts in the traditional sense. Rather, they refer to applications or digital processes that are executed automatically and without intermediaries after verification between two parties via the blockchain. Example: Opening a vacation home on Airbnb without first handing over the keys to the owner.

In a wallet, NFTs,Bitcoins and other cryptocurrencies can be managed, sent and received. Each wallet has an individual address, a kind of transaction number, which is necessary for sending and receiving. A wallet can be operated either client-side or online. However, there are also hardware solutions.

The private key (seed phrase) is generated during the first installation of each wallet and is something like the master key. It grants access to the NFTs and cryptocurrencies stored in the wallet and should always be stored securely (for example on paper or a USB stick). If you lose the private key to the wallet, you will not be able to see your NFTs or cryptocurrencies again.

Bitcoins and other cryptocurrencies are not generated by central banks, but by "mining". In this process, "miners" attempt to generate individual Bitcoin blocks using special hardware and complicated calculations. Every ten minutes, another bitcoin block comes into circulation that contains a fixed number of bitcoins. As a reward for the computing power contributed, the "miners" are rewarded with Bitcoins.

A token burn is the process of sending cryptocurrencies to a wallet that no one has access to, removing them from circulation and effectively "burning" them. Coin burning most often happens when someone wants to control the price inflation of a cryptocurrency. One such example is the cryptocurrency exchange Binance, which burns a certain amount of BNB every quarter.

A white paper is a document that basically serves public relations purposes and provides an insight into a new idea in the IT sector. The term is borrowed from the political white paper. A white paper provides a basic explanation of the services, technology and standards of an idea. In 2008, the Bitcoin White Paper was published under the pseudonym Satoshi Nakamoto. This white paper detailed the system and protocol for bitcoins. Most cryptocurrency founders use a white paper to publicize their idea. In it, they explain the specific features of the currency and the goals of the currency or their company.

Minting is the process of uploading the NFT to the respective blockchain so that the corresponding information is recorded there in an immutable manner.

Gas fees are incurred for transactions on the Ethereum blockchain. This includes sending cryptocurrencies (not only Ether, but also other Ethereum-based tokens) and the smart contracts. Gas is the fuel for the blockchain.

An announcement that a new digital collectible has come out or will soon be available.

With a Utility Token, the investor acquires the right to a certain benefit or perk. Utility tokens are often compared to some kind of membership or bonus program.

The term coined by Neal Stephenson in his novel Snow Crash (1992) has become a hype word since Facebook renamed itself Meta last year. It refers to a virtual world in which people move around, play and work with each other - using virtual reality glasses, among other things. The metaverse is seen as a field in which NFTs could play a role in the near future, because virtually acquired goods can be used and traded there. Investors are already paying millions for virtual properties in some cases.

A non-fungible token (NFT) describes a unit of data stored in a digital ledger, often referred to as a blockchain. This unit of data certifies an analog or digital asset as unique and thus its non-exchangeability. Non-fungible tokens can be used to represent a wide variety of digital elements (e.g., photos, videos, audio files, and other types of digital media) Access to the original file is limited to the individual purchasing the NFT. Access to a copy of the original file, on the other hand, is not. These copies of the digital media are available to virtually anyone. NFTs of the original files are tracked on a blockchain to provide proof of ownership to the owner. However, this proof must be clearly distinguished from the copyright of the digital work.

In the meantime, there are some well-known platforms like OpenSea, Coinbase or Rarible on which it is possible to buy or sell NFTs. In principle, however, this process also works independently of big-name companies and is possible on any website, so to speak. If you want to sell one of your NFTs, you can also do so via the aforementioned platforms. For the sale, you receive the cryptocurrency of the respective blockchain on which the smart contract of the NFT is based (e.g. for an Ethereum NFT, you would receive the associated cryptocurrency Ether). These can be exchanged for fiat currency (euros, dollars, etc.) or other cryptocurrencies on common exchanges (e.g. Binance, Coinbase, Kraken, etc.).

The prospective buyer needs a wallet to which the NFT can be transferred. The wallet itself must contain sufficient units of the cryptocurrency on which the smart contract of the NFT is based (e.g. Ether when buying an NFT of the Ethereum blockchain). If this is not the case, the purchase cannot be made. Analogous to this would be buying an item without having enough money for it in the account. The most popular provider for the Ethereum blockchain is Metamask. (Link).

In the age of screenshots, it is easy to duplicate digital works in this way, almost endlessly. The minting process of an NFT creates a digital certificate of ownership which, like cryptocurrencies, is documented on the blockchain to show unique proof of ownership. These records cannot be falsified because the blockchain is maintained in a decentralized manner by numerous computers around the world.

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