What is web3 and NFT?

web3
web3

Web3 and NFT Explained

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VanEck

By Matthew Bartlett, Head of NFT Community and Web3

Matthew Bartlett, Head of NFT Community and Web3, breaks down what you should know about Web 3.0, its technology, and NFTs, including the ownership process and associated fees.

We at VanEck regularly create resources to educate investors about the growing economy around digital assets and cryptocurrencies. To aid your learning, Matthew Bartlett, Head of NFT Community and Web3, has launched a series of videos to help you navigate Web 3.0 and NFTs.

What is Web 3.0?

Web 3.0 refers to the third evolution of web technologies and encompasses the decentralized applications that run on blockchain, including non-fungible tokens (“NFT”) and cryptocurrencies.

In this “Crypto Clarified” video, Matthew breaks down the evolution of web technologies since the 1990s and explains the major differences between Web 3.0 and Web 2.0.

Watch the full video here.

What is Blockchain Technology?

Blockchain technology is the backbone of Web 3.0 and refers to a transparent ledger system consisting of a series of blocks containing verified transactions. Entries are immutable, meaning they cannot be erased once placed on this distributed ledger.

Matthew compares blockchain technology to glass deposit boxes in a bank vault. A bank vault contains rows of deposit boxes. Each deposit box is made of glass, allowing people to easily view the contents of the box, although they do not have access to the box’s contents. An individual opening a deposit box will receive a key specific to that box. They do not own the box, although they now have access to the box’s contents. Similar to these glass boxes, a blockchain contains content others can see and verify, but cannot change.

Watch the full video here.

How Does NFT Ownership Work?

An NFT is a unique digital asset allowing for digital ownership through blockchain technology. NFTs are non-fungible, meaning they cannot be replicated or counterfeited and cannot be exactly equal to another NFT.

The primary current use case for NFTs is ownership of digital art, gaming and collectibles. However, Matthew also discusses new and emerging use cases for NFTs to tokenize physical assets, such as art and real estate. In other words, NFTs are beginning to have more real-world utility.

Watch the full video here.

What is Ethereum Gas?

Ethereum is one of many decentralized, open-source blockchain technology and software platforms that enables peer-to-peer, or “smart,” contracts as well as decentralized applications.

In this “Crypto Clarified” video, Matthew explains Ethereum Gas, which refers to the fee required to successfully complete a transaction on the Ethereum blockchain. These fees follow the laws of supply and demand and can vary between transactions.

Watch the full video here.

What Does Fungible in Non-Fungible Token (NFT) Mean?

Each NFT is one of a kind and references a unique entry on a blockchain. This uniqueness is what makes an NFT “non fungible” and is a key feature of its real-world utility.

On the other hand, a fungible item can be replaced by a similar object. To explain the difference, Matthew uses the example of a ten-dollar bill versus an airline ticket. A ten-dollar bill is fungible because it can be replicated with another ten-dollar bill, or by different combinations of five-dollar and one-dollar bills. Now consider an airline ticket, which has a unique confirmation code, date, time, and seat number—if someone tries to steal your seat, you can quickly show ownership of that seat with your ticket.

Watch the full video here.

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IMPORTANT DISCLOSURES

Please note that VanEck may offer investments products that invest in the asset class(es) or industries included herein.

Coin Definitions

Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Amongst cryptocurrencies, Ether is second only to Bitcoin in market capitalization.

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its employees.

In consideration of the receipt of non-fungible tokens (“NFTs”) from VanEck, you represent, acknowledge, accept and agree that you received the NFTs as a gift from VanEck. You did not pay any consideration, monetary or otherwise, for the NFTs.

You may receive an NFT as a gift from VanEck. You are not paying any consideration, monetary or otherwise, for the NFT.

The NFTs are not an investment. Rather, the NFTs are digital memorabilia intended solely for entertainment purposes. As entertainment memorabilia given to you as a gift, the NFTs have no value and are not intended by VanEck to ever have any value. Neither VanEck nor anyone else will take or not take any current or future action that is designed in any way to maintain the value of the NFTs, or to cause their value to grow or increase. You must not attempt to obtain an NFT from VanEck if you view it as an investment.

As a condition of receiving the NFTs, you shall hold the NFTs for your own personal benefit, and you shall not act, and are not acting, on behalf of any other person or entity; except that, if you are an affiliate of an entity or person whose relationship or affiliation you have made VanEck aware of prior to your receiving the NFT, and VanEck consents to your receiving an NFT, you may receive an NFT. You shall not sell, assign, alienate, lease, lend, fractionalize, re-gift, convey or transfer in any way the NFTs (or any interest therein) to any other person or entity, even an affiliate. Any sale, transfer, assignment, or other action covered in the preceding sentence shall be void. You must not attempt to obtain an NFT from VanEck if you plan to sell or transfer it.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. Cryptocurrencies are not covered by either FDIC or SIPC insurance. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of cryptocurrency.

Investing in cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future.

Investors should conduct extensive research into the legitimacy of each individual cryptocurrency, including its platform, before investing. The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical, or difficult to understand or evaluate. The cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the cryptocurrency’s blockchain or other underlying technology. Some cryptocurrency transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.

  • Investors must have the financial ability, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire investment in cryptocurrency.
  • An investment in cryptocurrency is not suitable or desirable for all investors.
  • Cryptocurrency has limited operating history or performance.
  • Fees and expenses associated with a cryptocurrency investment may be substantial.

There may be risks posed by the lack of regulation for cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should conduct extensive research before investing in cryptocurrencies.

Information provided by Van Eck is not intended to be, nor should it be construed as financial, tax or legal advice. It is not a recommendation to buy or sell an interest in cryptocurrencies.

All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.

©️ Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.

Initially published by VanEck.

Alif Vasaya provides expertise in business strategy, community growth hacking, content production, content strategy, digital ads through acquisitions, raising capital, monetizing the Metaverse, NFT affiliate marketing, consulting, and marketing advising for start-up companies.Highly skilled and results-oriented professional with solid academic preparation holding a bachelor's degree in arts and extensive experience in digital marketing, content production, business transformation, and human resource. Proven ability to assess and manage complex obstacles; viewed as a decisive troubleshooter. Successful in intense and demanding environments, providing strong team leadership and structure with a track record of motivating and developing soldiers.

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