Before we get into creating and selling NFT art, we want to give you a brief refresher on blockchain technology. At its core, the blockchain is a distributed public ledger and a ledger is a fancy way of describing a database of transaction and/or item records.
Most don’t realize it, but there are lots of ledgers in the world that people have been using for decades without even realizing it. For example, banks have a private ledger of account balances. And if you’ve used a Visa or Mastercard, you’ve used a distributed private ledger. For access to Visa’s ledger using debit and credit cards, they charge businesses a ‘merchant fee’. The main difference between distributed private ledgers and distributed public ledgers like the Ethereum blockchain is that public ledgers don’t require a centralized trusted authority to verify transactions or the authenticity of goods in a person’s wallet.
The key benefit of decentralizing this authority is allowing creators and consumers to easily transact with each other. An artist creates art which is then signed with their wallet’s private signature to prove its authenticity. The signing is then recorded to the Ethereum blockchain. Then once someone buys the art, the buyer can verify the art’s authenticity using the public Ethereum blockchain.
One of the benefits of the Ethereum Blockchain is that it supports Smart Contracts. Smart Contracts allow parties to transact with each other without a centralized authority. Ethereum is the currency required to transact using smart contracts and it is required to create and buy NFTs. When you transact in Ethereum you pay a fee called the ‘gas’ fee which varies depending on Ethereum blockchain traffic. This gas fee goes towards miners who process the computations used to process the smart contracts. The video below explains how this works in further detail.