NFTs For Dummies

NFTs For Dummies
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Get a grip on NFTs and learn how to get in the game  It’s not often that a brand-new investment comes along that revolutionizes how we buy and sell digital assets. But that’s what non-fungible tokens (NFTs) did. Built on blockchain tech, NFTs are shaking up the world of digital commodity investing. And you can get your slice of the pie before everyone jumps into the arena.  In  NFTs For Dummies , you’ll find straightforward answers to critical aspects of the NFT phenomenon. You’ll learn exactly what non-fungible tokens really are, how you can find them, and even how to create your own valuable NFTs. You’ll also discover:  How to find reliable and safe NFT marketplaces where you can be sure you’re dealing with reputable buyers and sellers A peek behind the NFT curtain to see how NFTs work and what, exactly, you own when you buy or make an NFT Discussions of the kinds of digital properties that can be converted into an NFT Perfect for anyone who wants to learn about the market for buying, selling, and creating crypto collectibles,  NFTs For Dummies  is the only resource you’ll need to get a handle on this cutting-edge tech and start making it work for you.

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Tiana Laurence. NFTs For Dummies

NFTs For Dummies® To view this book's Cheat Sheet, simply go to www.dummies.com and search for “NFTs For Dummies Cheat Sheet” in the Search box. Table of Contents

List of Illustrations

Guide

Pages

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Getting Started with NFTs

Introducing Non-Fungible Tokens

Beginning at the Beginning: What Is a Non-Fungible Good?

Exploring Uses for NFTs

Finding Out How an NFT Works

Buying NFTs

Why buy NFTs

NFTs as investments

Proceeding on Your NFT Journey

Owning Your Own NFT

Where It All Began: Non-Fungible Kitties

Blockchain for the masses

Not just a passing fad

The impact of NFTs

Democratizing blockchain

Representing ownership

Trading between users

Enabling smart contracts

Creating digital scarcity

Solving problems

The game mechanics of CryptoKitties

What’s In Your Wallet? Setting Up MetaMask

Setting Up Coinbase

Creating your Coinbase account

Verifying your phone number

Adding your personal information

Verifying your identity and adding your bank account

Adding funds to your wallet

Collecting, Breeding, and Selling Your Very Own Non-Fungible (Crypto)Kitties

Buying your first CryptoKitty

Using the Offer function

Breeding your kitties

The Future of NFTs

Dissecting the Anatomy of a $69 Million NFT

DIVING INTO THE DARK WEB

Redefining Property Rights (NFTs Are Not Just about Digital Art and Kitties!)

NFTs and Digital Property

Music, movies, and books

Photos and other digital art

Game assets

NFTs and Real Property

Homes, cars, and nondigital pets

Art, jewelry, wine, and other collectibles

Imagining the Possibilities

Buying and Selling NFTs

Getting In on the NFT Game

Knowing the Ins and Outs of Buying NFTs

Examining the success of early NFTs

The NBA’s Top Shot

Music artists

Internet memes

Unusual NFTs

Thinking about NFTs as an investment

Artist popularity

Blockchain security

Understanding the Risks of Hot Wallets like MetaMask

Comparing hot wallets

Weighing the pros and cons of hot wallets

Uncovering Your MetaMask Wallet

Installing MetaMask

MetaMask for Chrome

MetaMask for Firefox

MetaMask for Brave

Securing your MetaMask wallet for Chrome and Firefox

Buying Ether for Your MetaMask Wallet

Exploring NFT Marketplaces

Navigating the OpenSea of NFTs

Common token types on OpenSea

Buying NFTs on OpenSea

Creating your own NFT on OpenSea

The Nifty Gateway

Discovering Nifties and drops

Setting up a Nifty account and making a purchase

Rarible’s decentralized governance

Getting up and running on Rarible

Creating an auction with a royalty structure

Investing In NFTs

Understanding NFTs Are Not Cryptocurrency

Introducing NFT Investing

Deciding Whether NFT Investing Is for You

NFT Investing Strategies for Beginners

Valuing your NFT

Brand

Scarcity

Market

Choosing your strategy

Discovering the Best-Performing NFTs

Exploring Popular NFT Types

Digital art

Collectibles

Games

Music

Popular memes

Reporting NFT Gains and Paying Taxes on NFTs

Developing Your Knowledge: A Step-by-Step Guide to Programming Your Own NFT

What Is Ethereum?

Revealing the Ethereum Virtual Machine

Ether: The Gas That Fuels Your Transactions

The journey of a transaction

Compensating the (proof-of-) workers: What’s in it for the miners?

From happy hour to surge pricing: Determining a reasonable gas price

Setting your budget: Is the sky the (gas) limit?

Transaction fees

Scenario 1: Transaction successfully executes

Scenario 2: Transaction runs out of gas

The Blockchain: Where It’s All Stored and Secured

Ethash and proof of work: What makes Ethereum tamper-proof?

Miners and nonces and bears — oh, my!

How many “confirmations” until I’m actually confirmed?

Uncles and orphans

Hard forks: Updates to the underlying protocol

THE GREAT ETHEREUM CIVIL WAR

Smart Contracts Make the EVM Go Round

The nascent life of a smart contract

Exciting possibilities

Notable limitations

Oracles: How to Connect to the “Outside” World

Shining a Light on Ethereum’s Fundamental Structure

The big picture

Nuts-and-bolts of the blockchain

Gas essentials

Things that make the EVM an interesting place

Creating an Ethereum Account

Understanding Externally Owned Accounts

What it means to create an account

Private versus public keys

Digital signatures

Discovering Contract Accounts

Knowing the Difference Between Public Networks and Private Environments

Local development environments

Test networks

Main network

Preparing Your Accounts (on MetaMask)

Renaming accounts on MetaMask

Adding different ETH to different accounts

Funding your testnet account

Exploring the Ropsten testnet blockchain

“Disappearing” balances

Setting Up a Development Environment

Exploring Your Ethereum Solution Stack

Elements of the Ethereum stack

Here a stack, there a stack: Pre-made stacks

Put On Your Hard Hat: Constructing Your Environment

Setting up your local blockchain test environment

Connecting a custom (Ganache) network to your MetaMask wallet

Adding local (Ganache) accounts to your MetaMask wallet

Synching the Remix IDE to your MetaMask wallet

Deploying Your First Smart Contract

Working with Smart Contract Languages

Starting with the Solidity version pragma

Going from source code to bytecode

Key Elements of a Smart Contract

Data

Functions

Event logs

No Need to Reinvent the Wheel: Using Smart Contract Libraries

Ready for Takeoff: Launching Your Smart Contract

Beginning with a simple template

Compiling before takeoff

Deploying

Discovering Token Standards

Introducing Ethereum Development Standards

Ensuring interoperability and composability

Learning the ABCs of EIPs and ERCs

Understanding Standard Token Interfaces

ERC-20 token standard

ERC-721 non-fungible token standard

Other token standards on Ethereum

Building an ERC-721 Token

Writing and Compiling Your NFT

The code

The play-by-play

Deploying Your NFT

Deploying on Ganache

Deploying on Ropsten

Deploying on Mainnet

Nurturing Your NFT

Following your NFT on the blockchain

Interacting with your NFT

The Part of Tens

Ten Marketplaces for Your NFTs

The OpenSea Marketplace

The Axie Infinity Marketplace

The CryptoPunks Marketplace

The NBA Top Shot Marketplace

The Rarible Marketplace

SuperRare Marketplace

The Alcor NFT Marketplace

The Binance NFT Marketplace

The Foundation NFT Marketplace

The Crypto.com NFT Platform

The Ten Most Expensive NFTs

EVERYDAYS: THE FIRST 5000 DAYS

CryptoPunk #7523

CryptoPunk #3100

CryptoPunk #7804

CROSSROAD

OCEAN FRONT

CryptoPunk #5217

World Wide Web Source Code

Stay Free

CryptoPunk #7252

Index. A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

Y

About the Authors

Dedication

Authors’ Acknowledgments

WILEY END USER LICENSE AGREEMENT

Отрывок из книги

Welcome to NFTs For Dummies! If you’re curious about NFTs — their origin, use cases, and underlying technology — this is the book for you.

In this book, you can find helpful information and advice for exploring the world of NFTs. You can also find useful step-by-step guides that teach you how to set up a hot wallet to store NFTs, how to navigate NFT marketplaces, and even how to code up your very own NFT.

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Thus, our mutant apes are part of a greater decentralized ecosystem where records are kept in a public and trustless manner, which means that we don’t need a trusted central party, such as Bank of America, to maintain a reliable and secure system to track our mutant apes for us. In their peculiar way, these mutant apes are bringing further awareness to the burgeoning landscape of decentralized finance (DeFi) and decentralized autonomous organizations (DAOs). (To read more about DAOs, check out Chapters 4 and 6.)

The majority of NFTs are minted as ERC-721 tokens on Ethereum. Thus, as shown in Figure 1-6, the provenance of each token is memorialized on the public Ethereum blockchain. Each subsequent transaction is validated and executed by a distributed network of miners — much like the system securing the Bitcoin blockchain.

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