Blockchain Basics
What is blockchain and how does it work?
Please visit Coinbase’s Educational Site to learn about how blockchain works as well as other important topics such as Ethereum, crypto wallets, private keys, and more.
Blockchain
A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.
Some basic facts about the blockchain network:
Whenever something is requested through the blockchain network, a small amount of gas expenses that are paid to the blockchain as a kind of fee are always incurred.
Gas costs vary according to the number of users, and when gas costs are high, the fees are expensive but the processing speed is faster. Conversely, it is cheaper to use when the gas cost is low, but the processing speed is slow.
(real-time gas fee confirmation: https://etherscan.io/gastracker#historicaldata)
Chainlink VRF
Chainlink VRF (Verifiable Random Function) is a provably-fair and verifiable source of randomness designed for smart contracts. Smart contract developers can use Chainlink VRF as a tamper-proof random number generator (RNG) to build reliable smart contracts for any applications which rely on unpredictable outcomes:
Blockchain games and NFTs
Random assignment of duties and resources (e.g. randomly assigning judges to cases)
Choosing a representative sample for consensus mechanisms
Chainlink VRF enables smart contracts to access randomness without compromising on security or usability. With every new request for randomness, Chainlink VRF generates a random number and cryptographic proof of how that number was determined. The proof is published and verified on-chain before it can be used by any consuming applications. This process ensures that the results cannot be tampered with nor manipulated by anyone, including oracle operators, miners, users and even smart contract developers.
Metadata
Metadata is "data that provides information about other data", but not the content of the data, such as the text of a message or the image itself. There are many distinct types of metadata, including: Descriptive metadata — the descriptive information about a resource. It is used for discovery and identification.
IPFS
The InterPlanetary File System is a protocol and peer-to-peer network for storing and sharing data in a distributed file system. IPFS uses content-addressing to uniquely identify each file in a global namespace connecting all computing devices.
Minting
Literally any digital content or file can be turned into an NFT art or NFT asset.
Minting NFT refers to the process of turning a digital file into a crypto collectible or digital asset on the Ethereum blockchain. The digital item or file is stored in this decentralized database or distributed ledger forever, and it is impossible to edit, modify, or delete it. As is the process of creating fiat coins, when a manufacturer mints a physical coin, the process of uploading a specific item onto the blockchain is known as “minting”.
Smart Contract
A smart contract is a computer program or a transaction protocol which is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract or an agreement.
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