Getting into NFTs? Well, we’re glad you’re here! The world of non-fungible tokens can be intimidating for neophytes, which is why we’ve pulled together this explainer that covers the basics, from opening a wallet to what makes WAX so different from other blockchains.
What is a blockchain?
Simply put, a blockchain is a database made for storing blocks of encrypted data, and chains them together. Hence, the name “blockchain.” That successive series of blocks forms a chronological, transparent ledger of changes that’ve been made. Transactions on the blockchain (assets are distributed rather than transferred or copied) then, can be carried out without the need for an intermediary clearinghouse the way that ACH transactions in your checking account do.
Why would you need such a thing? Well, to enable peer-to-peer cryptocurrency transactions and move beyond yesterday’s need for a bank or third party to lay the land for when, how and where you can send your hard earned cash. Not only does it give you more control, it also can greatly reduce hackers as there is no single data resource they can infiltrate. It also increases transparency and lowers transaction costs in regulated markets.
Good thing you asked. It’s currency that exists on the blockchain and uses cryptography to make counterfeiting almost impossible. Because the funds aren’t issued by a central institution or government, on paper, they’re more or less insulated from government interference.
Innovators like WAX have issued their own currencies (usually called tokens) that can be traded for the good or service that the company provides. Token values are determined on exchanges that operate very similarly to stock exchanges where speculators HODL (“Hold on for dear life”) or trade their tokens. The price of the crypto then goes up and down as the market dictates.
What makes WAX different from Bitcoin and Ethereum?
To keep everyone on the same page when it comes to ledger balances, miners compete to produce blocks (added to the chain) by tackling intense computational tasks. This is what’s called Proof of Work, which is the method used for mining Bitcoin and Ethereum.
The more work done, the more units of cryptocurrency are available. As you might imagine, this is resource intensive, requires a ton of energy and is terrible for the environment. According to Investopedia, Bitcoin consumes around 120 terawatt-hours per year — more than entire countries like the Netherlands!
WAX, on the other hand, is a carbon neutral blockchain and uses a sustainable mining method: Proof of Stake. Proof of Stake limits mining power based on how many available coins you own. If you have a wallet with 1 percent of available coins, you should only be able to mine 1 percent of blocks. You don’t need a crazy-expensive GPU to start creating new blocks and as such won’t be running up your electric bill to do so. Proof of Stake is also drastically faster than Proof of Work.
What is staking?
When you stake an NFT, you can vote on community proposals (QR codes, NFT raffles, etc) via WAX Labs. Staking benefits the greater good of crypto by strengthening the blockchain’s processing ability and making it harder to attack. While your tokens are staked, they are unusable for anything else. If you choose to liquidate your funds, there is a 72-hour wait time to regain access.
What is an NFT?
NFT is an acronym for “non-fungible token.” Think of them like a digital trading card or piece of art.
NFTs are similar to cryptocurrency in that they trade on a blockchain. The difference between cryptocurrency and NFTs, however, is that an NFT has certain characteristics that make it unique compared to other NFTs, even if the two NFTs seem similar to one another. Think: metadata like serial numbers or designated rarities. You can’t quite say the same for two Bitcoin.
How do I buy NFTs on WAX?
Easy! Open a WAX Cloud Wallet (WCW) either with unique login credentials or by using a social media account. Then peruse the marketplace and make your first purchase — it’s really that simple. If you’re buying from the marketplace, you’ll need a credit card for transactions whereas you can use WAXP to purchase NFTs on secondary markets like AtomicHub.
What types of NFTs can I buy?
Music NFTs: Scoop unreleased songs, special edition albums and more, directly supporting your favorite artists in the process.
Late last year, legendary electronic producer deadmau5 launched his first series of NFTs on WAX including digital pins and animated stickers featuring his trademark mau5head designs. Alt-rock stalwarts Weezer released their first NFTs this April to commemorate their new album, with each song represented by a specific card. If you were lucky enough to score an Ultra Rare, you could redeem it for a physical toy. More on those later.
Gaming: NFTs aren’t just about digital artwork, with games built using the WAX blockchain you play to earn in-game items that can then be resold. For example, in HODLGods you can buy packs of cards that contain characters, in-game currency and upgraded gear.
What are vIRL® NFTs?
These NFTs are linked to physical objects or real-life services and act as a certificate of ownership, claim ticket and/or key. Leading brands are quickly adopting vIRLs as a powerful way to share their collectables and increase brand awareness.
Funko Pop! has embraced vIRLs in a big way with unique vinyl collectibles of Big Boy and Teenage Mutant Ninja Turtles. If your particular flavor of nostalgia is a little more on the sci-fi side, The Outer Space Men made a splash with guaranteed physical collectibles in each pack of cards as well as an ultra-rare action figure. Like we talked about earlier, the band Weezer has jumped on the vIRL trend too and tied collectible pins to Ultra Rare NFTs.
vIRLs aren’t just about toys for your shelf, though. WAX is committed to being a clean and carbon neutral blockchain, which is where our carbon offset program comes in.
What are Carbon Impact vIRL® NFTs?
To help individuals offset some energy used in the cryptocurrency process, WAX has created the world’s first tradable Carbon Offset vIRL® NFT. WAX Carbon Offset NFTs can be purchased directly from WAX. NFTs are priced at $1, $5, $25, $50 and $100.
These NFTs can be gifted, traded and composted (redeemed). When an NFT holder wishes to offset their carbon, they can compost the NFT and by doing so, one tree sapling per $1 spent will be planted by the National Forest Foundation, a highly respected non-profit organization focused on reforestation.
What is a dApp?
A dApp is any project that has code, which runs on a blockchain. This can be a collection, game, marketplace, DeFi service or an exchange.
WAX is built for mass-market dApps. Our microservices layer makes it easy for customers to manage blockchain accounts and transactions with the WCW, not to mention distinguish between bots and verified users. More than that, WAX is the largest dApp community with some 300,000 average daily transactions and 54 million blocks produced. Built-in two-factor authentication and easy sign-up with social media accounts mean getting up and running (either as a developer or customer) is simple and quick.
As of press time, the most popular dApps on WAX are:
- Farmers World
Why do I need a wallet to use WAX?
A wallet is what consumers use to interact with the WAX blockchain and the dApps built on top of it.
The WAX Cloud Wallet is the most user-friendly wallet on the market. Using it is like using many of the web services we are all familiar with — you set up an account with an email address and password or social account login on a computer or mobile web browser and the next thing you know, you’re ready to enter the world of NFTs.
For more info on the WCW, be sure to read this Medium post by our friends at EOS Amsterdam.