The Blockchain

Having a first look at the NFTs, the next logical step is to go into details about the technology underneath.

What is a Blockchain?

A blockchain is a database. It's software. Unlike regular databases, that act as filing cabinets, you got the user accounts in one table, purchases in another, inventory in another and so on with the data that can be changed at any moment by an user with sufficient access. The blockchain is available publicly, you can even use it anonymously.

The data however, cannot change, once it's there. Forever.

What's the cost?

Obviously nothing comes without a cost, else we would be living in a utopia and I probably wouldn't be writing blog posts to get people on board.

It costs money, to upkeep the blockchain, because obviously it didn't get born out of nowhere in the middle of a forest. People are working hard to grow it. So while a big portion of the calculations is sent out across all participating servers/computers aka "nodes" - there is still a central need to keep everybody on the same page. That involves a price.

That price is called gas.

Gas

You can see the current situation of the gas price with tools like ethgasstation.info.

It's display in Gwei which is like cents for a dollar. Only way, way smaller in fraction.

Gwei is the most commonly used unit of ether because "gas" prices are easily specified in gwei. For example, instead of saying that your gas costs 0.000000001 ether, you can say your gas costs 1 gwei.

From the same Investopedia page I linked previously.

Calculating Gas

In order to understand how much doing something actually costs, you have to take one of these Gas tiers (introduced very recently, on 5th of August, 2021 - with the London update), then estimate how much gas your entire transaction will cost. This is usually done either in a marketplace, when you want to list or buy something or you can see the estimates when you're digging in the code and experimenting.

Gas Fluctuations

If you pull up a chart of the price history, you will see it go crazy from time to time. This is due to supply & demand and the current tech setup for the EVM.

This is set to change very soon, with the ETH2 Upgrade that introduces a Proof of Stake mechanism, rather than using the current one - Proof of Work.

Why the name "Blockchain"?

Regular databases have a horizontal and hierarchical layout: user accounts may have purchases, social info and this data is requested in many different ways.

With a blockchain, data keeps being connected along the axis of time. This ensures that the full history of each action is held in a comprehensible manner, with timestamps. Thus you can imagine that the next "block" of transactions gets added only after the last one, and so on. This ensures that the full history of all contained data, is the same across an arbitrary amount of nodes.

This promotes trust, transparency and efficiency.

This isn't the perfect database, though. In fact, there is no such thing as a perfect database. Even more so - there isn't such a thing as perfect software, because the humans making it will never be perfect and neither will robots. All of our atoms are different and unique, perfect is a myth. Practical is what works.

Blockchain introduces different new security threats, such as "Consensus 51% Attack" - which would involve a single entity to take 51% of the nodes and then they will be able to do their shady deeds.

I won't go into detail about the vulnerabilities here, you know how to use the internet. I feel like a dedicated post for the most talked about ones is in order, at a later time.