Lesson 2: The Glory of NFT Blockchains (And A Few Current Issues)

Lesson 2: The Glory of NFT Blockchains (And A Few Current Issues)

To review from lesson one, blockchains on Web 3.0 verify assets such as NFTs and allow the user to hold a truly legitimate and limited item which is provable and of itself. 

These assets are provable on the blockchain. Many of us have heard of Ethereum as a blockchain. But what are blockchains, and what tokens have their own blockchain?

According to IBM.com, "Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network." Essentially, it's the banking system of Cryptocurrency which records and legitimizes transactions, allowing proof of ownership for assets such as NFTs.

Bitcoin, arguably the most popular asset, does not have it's own blockchain usable for NFTs, and recently it's seen a competitor rise in Ethereum or ETH, currently the largest supporter of the NFT space. The token, currently sitting around 3,000 USD, has grown and spiked 300% in the previous calendar year, with NFTs becoming popular on its blockchain around late August of 2020, the Ethereum marketplace continues to thrive and prove itself as one of the largest providers for these tokens.

Despite it's massive success, one major problem exists with Ethereum. It's decentralization, which at first glance seems like an amazing success, however makes buying and selling NFTs much more expensive due to Ethereum Gas.

Gas is a term to represent charges that apply a certain "network tax" to transactions. Essentially, when you buy an NFT, you're not just paying for the token, but you also have to fork out an amount to pay someone connected to the network with a processing device such as an Ethereum mining machine to process the transaction. Gas fees can add hundreds of dollars on top of a purchase, and limits the buying and selling rate of tokens in exchange for a greater decentralization, a tradeoff many are willing to engage with. Essentially the gas fees make it worth someone using their computing power to help your transaction process. These fees fluctuate at different times of the day, soaring during business hours with high amounts of transactions and lagging slow on the weekends, making the best times to buy on the market.

However, a new competitor is rising against Ethereum, that of Solana. And it may be revolutionizing 

As stated on website Blockworks.co, "Native to Solana’s blockchain is the SOL token which provides network security through staking as well as a means of transferring value.

Solana was created in 2017 by Anatoly Yakovenko alongside current Solana board member and Chief Operations Officer Raj Gokal. Yakovenko, now Solana Lab’s CEO, came from a background in system design and wanted to apply his knowledge toward a new blockchain paradigm that enabled faster processing speeds."

Solana is a company, not merely a decentralized server managed by a company. Solana processes their own transactions instead of "hiring out" the transactions to those mining the token. Given the more centralized control based around a company, there is greater management of the asset, not simply left to community will. Solana has the blockchain set up to host NFTs and frequently sees great interaction with their marketplace, which has been rapidly increasing in the past few months.

One of the major benefits to using Solana is that gas fees are almost insignificant, charging just pennies on the dollar for fees that exist on Ethereum. This allows users to buy and flip NFTs much easier, without having to time the market. 

DAREDVL is utilizing the Solana blockchain to host the NFTs, which allows a smoother and more efficient transaction between buying and selling, with low fees. However, we're adapting the process.

When issuing the NFTs for sale, we must first take the asset we want to sell (such as the Founder's token) and register it on the blockchain through a contract called a "smart contract" which authorizes and connects the files to the Solana network and assigns them identities which makes them verifiable. More to come on smart contracts in future lessons.

However, we're allowing our users to buy the NFTs in US Dollars or USD, instead of having to pay Solana to buy the NFTs. We're doing that by setting a cost in USD for our partner company facilitating the NFTs which will, at the time of the sale, mint an NFT and verify it as a valid asset and convert the USD paid into a varying amount of Solana, depending on where it is valued at the time. This allows us to avoid making our customers wait to time the price of buying Solana as well as allowing quick and easy transactions.

Once the NFT is selected for purchase on the website, the customer will checkout just as if they were buying a shirt (or maybe even buy a shirt with the NFT in the same transaction). We will receive the funds for the NFT and the token will then be emailed to the customer upon putting in their email during checkout. 

They will then be able to go into their email and connect a crypto wallet to hold their NFT and have the token sent into the wallet, all simple and managed by a step-by-step process easy to understand.

That way, if the space is still confusing after these lessons, we don't lose the availability of having investors. 

Our team is also going to be available to help deliver the NFTs after the sale if any concerns still exist. You'll be able to buy your NFT on our website just as if you were ordering any other product, and allow yourself a foolproof and easy way to enter the community rather than frustratingly trying to understand the magnitude of information that exists in this space.

Step by step, we're changing the world of commerce, and how brands interact with their customers. We're excited to continue these lessons and bring greater knowledge to our family. 

We hope to see you again for the next lesson.

-TEAM DAREDVL

 

 


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