Blockchain: what are smart contracts and NFTs?

What are the benefits of owning an NFT? How does a smart contract work?

A blockchain allows for controlling orders, payments, accounts, processes, and much more. In particular, NFTs and smart contracts are some of its most talked-about applications, well known even to those unfamiliar with blockchain technology.

If you are considering opting for them, it is essential to shed light on what they are and how to take advantage of them.

Those who want to enter the blockchain universe know that information digitalization ensures thoroughness and efficiency. If you want to review how a blockchain works, you can read this article.

Smart contracts, blockchain, and useful platforms.

If you want to know how to work with blockchains and understand smart contracts and NFTs, a preliminary definition will be the ideal starting point.

The idea behind smart contracts is nothing but new. Initially devised in the 70s, it found complete application thanks to blockchain technology.

Smart contracts are digital contractsthat are automatically executed when specific preset criteria are satisfied. It is a type of automation that makes contractual processes more efficient, secure, and transparent.

Therefore, contracts are stipulated autonomously, without the need for notaries, banks, or other parties. In addition, there is no risk of breaching the contract, as it only works when the terms are met. Penalties are also automatically applied, and there is no need for intermediaries or red tape, slowing things down.

Making it possible is the software executed by a network of miners: computer owners who contribute their computing power to the mining process (fundamental to a blockchain).

To offer an example of a smart contract, think about the insurance policy applied by several airlines through the Ethereum platform. In case a flight gets delayed, purchasers receive the refund automatically: the smart contract obtains the information linked to the flight and acts accordingly.  

Okay, but how do you stipulate a contract? Well, you need to know a programming language. Here are some of the best-known platforms you can use to obtain a smart contract:

  • Ethereum
  • Hyperledger Fabric
  • Nem
  • Stellar
  • Waves

NFTs and blockchain: all you need to know before investing.

NFT stands for Non-Fungible Token and is a digital token representing unique and non-interchangeable goods. Developed on the Ethereum blockchain, they have been mainly employed for the sale of digital art as well as for exchanging virtual objects in online video games, tweets, and much more.

Following the high attention toward NFTs of an initial phase, when the average investor hoped to find a winning project through random purchases, the market has now forced people to rely on thorough analysis.

When talking about NFTs, one may wonder what tokens are. A token is a piece of digital information recorded on a shared archive, associated with a specific user, and representative of a certain right. Therefore, the purchaser of a good that is linked to an NFT does not own the good in itself, but the possibility of having a right on that good.

What makes NFTs different from other tokens?

NFTs differ from most tokens distributed on blockchains because they are:

  • Irreplaceable, as they cannot be reproduced.
  • Unique, as linked to a single user/wallet.
  • Indivisible into smaller parts.

That is why NFTs are ideal to sell artworks (transferring ownership and not copyright).

The above-mentioned smart contractcertifiesits ownership and permanently records it on a blockchain.

What are the best marketplaces for NFTs?

Just like it happens for smart contracts, bargaining NFTs requires specific platforms. The most accessible one is OpenSea: the largest NFT marketplace available.

On the other hand, if you are interested in creating an NFT, you can also do that on OpenSea or other platforms by paying a price related to the smart contract that contains the good. Here are some of the platforms available in Italy:

  • OpenSea
  • NFT Launchpad
  • NFT
  • Binance NFT Marketplace
  • Axie Marketplace
  • Magic Eden
  • Nifty Gateway
  • Rarible

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