Questions about NFTs and Blockchain
A non-fungible token, or NFT, is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger. If something is fungible, it is interchangeable with another copy of the same thing. For example, money is fungible; you can exchange any $1 bill for another. However, unique items such as rare cards or original paintings cannot be interchanged; they are therefore non-fungible.
This is a place where you can store digital assets, like cryptocurrencies or NFTs. Owning certain assets, like NFTs, can give you access to members-only platforms, servers, events, etc., so connecting your crypto wallet is a lot like logging on to these platforms. There are three main types of wallets: custodial (or hosted), non- or self-custodial, and hardware, each with its pros and cons.
Custodial or hosted wallets are like a bank. You give the bank your money, and when you want to use it, you need a password. If you forget your password, you can usually request an email to create a new one.
Non- or self-custodial wallets don’t use a third party but just provide the software you’ll use to store your crypto. These wallets come with a “key” like a password, but if you lose it, there’s no way to get it back.
Hardware wallets are physical devices that store your crypto offline, similar to a USB key. While they are the hardest to hack, they are usually the most expensive option.
For more information about crypto wallets and how to create them, check out this article on Coinbase.
For the most part, crypto wallets are as safe as buying something online with a credit card.* There will always be hackers and spammers trying to steal your identity and money, but there are some simple precautions you can take to make sure this is less likely to happen. Things like 2-step verification, cold storage, and keeping a copy of your “keys” are just a few.
Also, different types of crypto wallets have different levels of security and features. Non-custodial wallets are less likely to be hacked, but you are more likely to lose your key. With these wallets, there’s no “Forgot your password?” button. Once it’s lost, it’s lost forever… along with your crypto!
With custodial wallets, you’re using a third party to store your cryptocurrency. Most custodial wallet exchanges have high levels of security features, but it’s always a good idea to do your research and check security track records when choosing a custodial wallet.
*One big difference is that if your bank suspects someone is using your card fraudulently, they might try to warn you and stop the payment or even return the stolen funds. This is not the case with cryptocurrency! Also, all sales are final, so always double-check your purchase, and the source, before you buy!
Based on your needs and the type of crypto wallet you decide to open, the steps for creating them are slightly different. Do your own research (DYOR) about the different types of wallets and make sure you understand the pros and cons before you make your selection. Check out some of the more popular wallets below.
- ZenGo (our preferred wallet, but still DYOR)
- Wallet Connect
Once you’ve created your crypto wallet, you can connect it to The Smurfs’ Society main platform. Once there, follow the instructions to connect your wallet. Only a few will be able to connect from day one, so follow the prompts to see if you are eligible to connect. For more information, check out the onboarding section.
Web3 refers to a third iteration of the internet based on blockchain technologies. While the concept of Web3 is still evolving, the main principles revolve around the ideas of decentralization and token-based economics (mainly cryptocurrencies). The main idea behind Web3 is that users and communities control transactions, content, and access, instead of centralized systems where single organizations (like a government or corporation) have control.
In layman’s terms, blockchain allows its users to share secure, unalterable information without a middleman.
Technically speaking, blockchain technology can be defined as a decentralized, distributed ledger recording transactions across many nodes on a network, so that any involved block cannot be altered retroactively without the alteration of all subsequent blocks. Blockchain technology offers elevated standards in terms of transparency being, by definition, “trustless” since it functions without a central authority. Moreover, it grants extreme security thanks to cryptography.
Ethereum is a decentralized, open-source blockchain. Ether is the native cryptocurrency of the platform. Ether is the second-largest cryptocurrency after Bitcoin.
Polygon is a "Layer-2" blockchain network built on top of Ethereum to provide a faster and cheaper experience. Matic is the native cryptocurrency of the network.
Because of its level of decentralization, Ethereum is a more secure network than Polygon, but this is why transactions on Ethereum are slower and more expensive.
The Smurfs' Society uses both Polygon and Ethereum depending on the type of NFTs you are minting. For the gamification elements of the collection, we use Polygon for a smoother gaming experience. For the principal Smurf NFT collections, we use the more secure Ethereum Network.
Gas fees are the transaction fees associated with minting, buying, selling, and trading NFTs. Gas fees can vary depending on a variety of factors like
- Which blockchain an NFT is stored on
- The time of day the transaction occurs
- The volume of transactions happening at the same time
- The market
The biggest difference comes from which blockchain network, and which layer, you are on. Layer-1 networks (like Bitcoin and Ethereum) are typically very slow and have much higher gas fees, while layer-2 networks (like Lightning and Polygon) are very fast and have much lower gas fees.
An off-chain transaction is the movement of value outside of the blockchain. While an on-chain transaction - usually referred to as simply 'a transaction' - modifies the blockchain and depends on the blockchain to determine its validity, an off-chain transaction relies on other methods to record and validate the transaction. In other words, off-chain transactions transfer some of the work from a blockchain ecosystem, which can later be integrated back into a blockchain. On an off-chain network, the users agree that a third party will handle validating and authenticating transactions. Off-chain systems tackle a blockchain network's scalability issues by facilitating faster and cheaper transactions. One off-chain transaction method is to employ a layer 2, which is a second blockchain built on top of the main blockchain (mainnet) to help the mainnet scale in speed and cost.