What is NFB?

An NFB (non-fungible book) refers to the concept of turning a written work, such as a novel or any textual content, into a NFT (non-fungible token). In this context, the NFB represents ownership and authenticity of the digital version of the book. This could involve tokenizing the entire book, specific chapters, or even individual pages as unique digital items on a blockchain.

Similar to how NFTs are used to represent ownership of digital art, music, and other creative content, using NFBs would allow authors or content creators to sell and distribute their works in a digital marketplace while providing a way to prove ownership and authenticity. Collectors or readers who purchase these NFBs would have a verifiable record of their ownership on the blockchain.

How do NFBs work?

NFBs utilize blockchain technology, which functions as a vast digital public ledger. The prominent blockchains are distributed across numerous nodes, essentially people's computers, making them "decentralized."

Instead of relying on a central server owned by a company, the blockchain operates on a peer-to-peer network. This not only ensures the unchangeable nature of the blockchain but also allows those operating nodes to earn rewards, rather than benefiting a single entity. This decentralized and historical nature of the blockchain makes it a game-changer for establishing verifiable authenticity and digital ownership.

When any action involving an NFB occurs—creation, transfer, purchase, sale—it is meticulously recorded on the blockchain, facilitating authentication. This record functions as a permanent proof of authenticity that is accessible to anyone. In contrast, traditional purchases of collectibles come with paper certificates of authenticity that are easily misplaced or damaged, creating a delicate system for verifying authenticity. Blockchains provide a streamlined and more secure resolution to this persistent problem.

Imagine wanting a special first edition of a famous book by Charles Bukowski. With NFBs, you can track the book's history, know its previous owners, transactions, and even trace it back to Bukowski's original writing. Without NFBs, it would be hard to tell if you're getting the real book or a great copy.

The Influence of NFB Innovation

Blockchain technology has brought about a revolution in the realm of digital assets. Through NFBs, digital items attain verifiable scarcity, seamless transferability, and ownership authentication. But you might be wondering, what's the significance?

For creators, these novel attributes wield remarkable potential. Instead of sharing their creations on platforms that historically posed challenges for monetization, they can now vend distinct, authenticated items on a blockchain-powered marketplace. Beyond the initial sale, NFB creators might also receive predetermined shares from subsequent transactions. For example, a writer could craft a character featured across multiple books or movies, possessing acknowledged authenticity and ownership. This writer could subsequently receive a share of the earnings each time that character's representation is transferred to a new owner.

This innovation holds revolutionary implications for collectors as well. Consider preparing to purchase an online concert ticket—with NFTs, the ticket's authenticity becomes trustworthy due to the indisputable blockchain history, eliminating the need to rely solely on the assurances of resellers.

The Dynamics of NFT/NFB Transactions

As the demand for NFBs surges, numerous marketplaces have emerged to cater to the rising interest in trading these assets. Each marketplace presents distinct features—some are dedicated to a single blockchain, others maintain an exclusive and curated collection, while certain ones concentrate on specific categories of NFTs. At Charles we take pride in being the pioneering platform that unites all forms of written content as NFTs on a various blockchains.

Can’t I just right-click and save or screenshot the NFB?

Of course you can save or screenshot an NFB, but that doesn’t make you the owner. Taking a picture of the Mona Lisa doesn’t mean you own it. You could print it out and enjoy the art, but you wouldn’t be able to resell it for its true value. Similarly, you could take a screenshot of a Bored Ape, but that won’t get you on the yacht!

What is a Crypto Wallet?

In straightforward terms, a crypto wallet serves as the tool that facilitates the buying, selling, and safekeeping of your cryptocurrencies, and often, your NFTs (Non-Fungible Tokens). To delve a bit deeper, a crypto wallet essentially oversees access to your private key, a critical element for controlling your blockchain wallet address. It's important to note that your cryptocurrencies and NFTs aren't physically stored within or on the crypto wallet itself; they reside securely on the blockchain. The crypto wallet acts as your means of interacting with and managing these assets on the blockchain.

Think of your crypto wallet as the key to a secure vault on the blockchain—much like you use a key to unlock a safe where your digital assets are stored within the blockchain. This key is also instrumental for sending and receiving assets to and from your blockchain address. Just like safeguarding any key, ensuring the security of your crypto wallet and its associated private key or seed phrase is of paramount importance. In this guide, we'll explore the various types of crypto wallets and guide you through the process of setting one up.

Varieties of Crypto Wallets

Custodial vs. Non-Custodial

Crypto wallets come in two primary categories: custodial (also known as "hosted") and non-custodial wallets. Custodial wallets are overseen by a third-party entity, while non-custodial wallets are not. Think of custodial wallets like entrusting the key to your safe to a secure facility managed by a third party (who may verify your identity before granting access to the key). In contrast, non-custodial wallets are akin to keeping your key personally or within your own space.

Custodial wallets offer convenience but entail less personal responsibility. However, they are reliant on the third party, which means your assets could be at risk if something were to happen to them, like a security breach.

Non-custodial wallets grant you complete control over your assets but necessitate a higher degree of vigilance. You're responsible for safeguarding your key, akin to not misplacing it or accidentally discarding it while tidying your closet.

Software vs. Hardware

Within the realm of non-custodial wallets, you encounter two types: software wallets and hardware wallets. These are also referred to as "hot wallets" and "cold wallets."

A software wallet, or hot wallet, is a program installed on your computer or accessible through your web browser. This makes software wallets a convenient choice for swiftly buying, selling, and transferring NFTs and cryptocurrencies.

On the other hand, a hardware wallet, or cold wallet, is a physical device that may require connection to your computer for use. Since it's not continually linked to your computer or browser, it serves as an excellent option for long-term, secure storage but is somewhat less convenient for frequent or rapid transactions.

Both software and hardware wallets typically require you to establish a personal password or PIN for wallet access. This password or PIN differs from the seed phrase used to regenerate your private key.

It's essential to note that various wallets support different blockchains, and not all wallets are compatible with NFTs. For instance, here are some wallets that work seamlessly with OpenSea:

• Metamask (Ethereum, Polygon, Klaytn)
• Safle

What is a Seed Phrase?

A seed phrase, sometimes referred to as a recovery phrase, mnemonic phrase, or seed mnemonic, functions as a failsafe for safeguarding and restoring a crypto wallet. It comprises a sequence of words generated in a random order. Seed phrases typically consist of 12, 18, or 24 words, although certain wallets might employ different lengths.

The seed phrase acts as a human-readable representation of the private key responsible for controlling access to your wallet and the assets associated with your blockchain wallet address. When you establish a new wallet or configure one for the first time, you are usually prompted to carefully record and securely store this seed phrase. In the event that you lose access to your wallet, the seed phrase can be utilized to regenerate the private key, thereby enabling you to regain entry to your wallet.

Maintaining the security and confidentiality of your seed phrase is of utmost importance. Anyone who acquires your seed phrase gains access to your wallet and its contents. Many individuals opt to store their seed phrases offline in a physically secure location, such as a safe or a bank's security deposit box. It's generally discouraged to store your seed phrase digitally or online, as doing so can heighten the risk of exposure to potential threats.

What is a Private Key?

A private key is a cryptographic code generated during the creation of a cryptocurrency wallet. It functions as a digital signature that provides evidence of ownership for the assets, such as cryptocurrency and NFTs, held within a specific public blockchain address.

Here's how it operates:

Public Address: Every cryptocurrency wallet is linked to a public address, which is a lengthy sequence of characters. For instance, on the Ethereum blockchain, these addresses consist of 42 characters and start with "0x" as a prefix. The public address is what you share with others when you engage in transactions on the blockchain. Think of it as akin to an email address; anyone who knows it can send you messages, and you can send messages from that address.

Private Key: The private key is a randomly generated string of characters, typically around 64 characters in length. It is held in strict confidence and functions essentially as the password to access and manage your wallet and the assets associated with the corresponding public address. Picture it as the password to your email account.

Access and Transactions: When you wish to transfer tokens from your public address to another public address, you employ your private key to digitally sign the transaction. This signature serves as proof that you possess authorized access to the tokens at the public address, thereby authorizing the transfer.

What is Cryptocurrency?

Cryptocurrency refers to digital money that operates within a decentralized framework known as the blockchain. It serves as a collective term encompassing all forms of digital currencies. These currencies are accessible through the utilization of a cryptocurrency wallet.

How are cryptocurrency and the blockchain interconnected?

Back in 2016, Fabricio Santos likened blockchain to a secure bank vault filled with transparent deposit boxes. These boxes allow everyone to observe their contents without granting access. Expanding on this metaphor, he explained that when a person opens a new deposit box, they receive a unique key for that box. However, duplicating the key does not replicate the box's contents; it merely grants access.

Blockchain technology stands out because it permanently records all transactions for public viewing. The blockchain ledger is immutable, meaning its history cannot be altered, only added to. Cryptocurrency relies on this decentralized blockchain network of computers to validate and verify ownership.

The Advantages of Cryptocurrency

1. Secure, Instant Transactions: Cryptocurrency prioritizes privacy, eliminating the need to share personal information with every transacting party. This safeguards financial and personal data from potential access by unauthorized parties, such as advertisers. Cryptocurrency also enables near-instantaneous transactions, reducing the typical 3-4 day wait for transfers in traditional banking.

2. Self Custody of Cryptocurrency: Traditional banking systems necessitate trust in the entity holding your funds, potentially exposing your currency to various uses. Cryptocurrency allows for decentralized finance, removing intermediaries and making transactions trustless and permissionless. Non-custodial wallets empower users to safeguard their funds while providing unrestricted access.

However, some cryptocurrency transactions, especially on centralized exchanges like Coinbase and Binance, still involve intermediaries akin to traditional banking, offering added convenience to users who prefer not to shoulder the responsibility of non-custodial wallets.

3. Anonymity and Privacy: Privacy is a cornerstone of cryptocurrency, with transactions being pseudonymous rather than fully anonymous. They don't require government names or identifying information but are tied to wallet addresses. This confidential access is particularly valuable for marginalized groups.

Considerations When Using Cryptocurrency

1. Ongoing Evolution: Blockchain technology, dating back to the '90s, is relatively young. Everyone is learning to use it concurrently, leading to shared experiences and growth challenges.

2. Decentralization: Blockchain's decentralized nature means there is no central authority to address issues. This is especially true for non-custodial wallets, emphasizing the importance of securing your access key.

How Do People Use Cryptocurrency Today?

Cryptocurrency's scope and usage have expanded significantly since Bitcoin's inception in 2009. Now, cryptocurrencies are used to purchase items ranging from NFTs on platforms like OpenSea to physical goods and services (e.g., McDonald's and Google Cloud accepting Bitcoin).

Potential Future Uses of Cryptocurrency

More merchants and industries are poised to accept cryptocurrencies as a payment method. Blockchain technology is also finding applications in various sectors, from medical records to mortgages.

Types of Cryptocurrency

Coins and tokens represent two distinct cryptocurrency categories:

Coins are tethered to specific blockchains and rely solely on the blockchain's decentralized system. They can be more volatile. Prominent examples include Bitcoin (BTC), Ethereum (ETH), Polygon (MATIC), Solana (SOL), and Avalanche (AVAX).

Tokens, on the other hand, are built on top of blockchains and can serve various purposes. Stablecoins, a common token type, are designed to reduce volatility. Notable stablecoins include Tether (USDT), USD Coin (USDC), and Dai (DAI).

Advantages of Decentralization

Blockchain technology lacks central control and relies on a multitude of computer systems (nodes) to uphold its security. Nodes validate transactions through a consensus mechanism (e.g., Proof-of-Work or Proof-of-Stake). While cryptocurrency is considered secure, best practices for safeguarding your crypto are crucial, such as protecting your wallet's seed phrase and exercising caution with NFT purchases.

How to Access Cryptocurrency

Cryptocurrency can be accessed using a crypto wallet. It's essential to remember that your cryptocurrency doesn't physically reside in your wallet; rather, the wallet serves as a key to unlock access to crypto stored on the blockchain. You can acquire crypto by purchasing it on exchanges like Binance or Coinbase or by directly adding it to your wallet using services like Moonpay or Wyre, integrated into many NFT-compatible wallets.

How Are Cryptocurrency and NFTs Connected?

Cryptocurrency and NFTs both rely on blockchain technology. The key distinction is fungibility: cryptocurrencies are fungible, meaning they are mutually interchangeable (e.g., one Bitcoin equals another), whereas NFTs are non-fungible, unique, and not interchangeable. To buy NFTs, you need both cryptocurrency and a compatible crypto wallet. NFT transactions occur using cryptocurrency, and some NFTs can be bought with a credit or debit card on platforms like OpenSea.

What are gas fees?

In the realm of web3, "gas fees" signify the charges requisite for the execution of transactions on the blockchain. These payments serve as compensation for the individuals who operate the network nodes, thus ensuring the continuous operation and integrity of the blockchain ledger.

We will guide you through the rationale behind gas fees, the factors influencing their magnitude, methods to steer clear of excessive fees, the distinctions in fee structures across various blockchains, and elucidate how OpenSea simplifies the process of cost reduction. Let us delve into this subject.

What is the purpose of gas fees?

Gas fees serve as compensation for node operators or network validators who validate transactions on the blockchain. Each supported blockchain (Ethereum, Polygon, Klaytn, Arbitrum, Optimism, Avalanche, and BNB Chain) has varying gas fees depending on its transaction validation method.

Users often inquire about the recipients of gas fees, which depends on the blockchain's validation method. Let's delve into the two primary methods: Proof-of-Stake and Proof-of-Work.

Proof-of-Stake and Proof-of-Work

Blockchains using Proof-of-Stake rely on validators who stake significant amounts of the blockchain's cryptocurrency. These validators verify transactions and monitor blockchain activity for accuracy, with validators voting on outcomes.

Blockchains employing Proof-of-Work utilize miners tasked with solving complex math equations to validate transactions. Both methods are intricate and time-consuming, ensuring blockchain security, which is why gas fees are rewarded to operators.

What is The Merge and its impact on gas fees?

Ethereum formerly used Proof-of-Work but transitioned to Proof-of-Stake in "The Merge." This transition significantly reduces energy consumption by ~99.95%, although it wasn't intended to lower gas fees, as per the Ethereum Foundation.

What affects gas fees and how are they computed?

Gas fees rise when more users use applications on a blockchain network, leading to competition for block space, akin to Uber's surge pricing during peak hours.

Fees apply to actions like data storage, token transfers, NFT minting, sales, or purchases, each requiring a specific gas fee. Notably, gas fees don't affect the NFT's price but influence the overall transaction cost, potentially increasing during network congestion.

How to mitigate high gas fees?

OpenSea lacks control over, sets, or receives gas fees; they all go to network validators or miners.

To avoid high gas fees, consider conducting transactions during low network usage times, such as midday or early morning. OpenSea displays the gas fee breakdown by your wallet provider during the NFT purchase process, allowing you to complete the transaction at a lower fee. You can also check historical and current gas prices on EthereumPrice.Org/Gas to find periods of lower activity.

What is a blockchain?

A blockchain is a decentralized ledger that derives its name from the way it stores data. When a set of transaction data reaches a certain size, it forms a "block." This is where every transaction on a blockchain is verified and then permanently stored. The "chain" aspect of a blockchain refers to a series of consecutive blocks linked together, creating an immutable ledger.

How does a blockchain differ from a traditional database?

A blockchain differs from a traditional database in two key ways: its operational model and the responsible entity. A blockchain operates independently, without the oversight of a company or financial institution, while a traditional database is typically owned and managed by a single entity. It enables trustless and permissionless transactions.

Here are five distinct characteristics that define blockchain technology:

1. Decentralization: No single entity owns a blockchain; instead, it relies on a network of computers ("nodes") to validate transactions through consensus mechanisms.
2. Validated by multiple independent nodes: Consensus mechanisms involve multiple independent nodes validating and recording digital items or information on the blockchain. This leads to the addition of new blocks once a set number of transactions are verified.
3. Public and transparent: Despite its decentralized nature, a blockchain's ledger remains public and transparent while preserving user anonymity. Every transaction is permanently recorded and accessible to the public.
4. Immutable: Once a block is added to the chain, it becomes immutable, meaning it cannot be altered unless the majority of independent nodes reach a consensus to approve the change, making manipulation difficult.
5. Trustless and permissionless: Blockchain transactions are trustless, as they do not require trust in another organization or entity. They are also permissionless, as they don't need third-party approval, being executed by a network of computers.

Types of blockchains

There are different types of blockchains, including Layer 1, Layer 2, and sidechains, each with varying gas fees and scalability.

• Layer 1 blockchains: These are the primary blockchains that execute and validate transactions independently. Examples include Ethereum, Solana, and Avalanche.
• Layer 2 blockchains: These act as scaling solutions for Layer 1 blockchains, processing transactions on their chain and then summarizing completed actions on the Layer 1 chain. Examples include Optimism and Arbitrum.
• Sidechains: Separate, independent blockchains linked to Layer 1 chains through a two-way bridge. They efficiently process transactions and maintain their security, connecting to the main blockchain to transfer digital items. An example is Polygon, an Ethereum-compatible sidechain.

Consensus mechanisms

Blockchain transactions are validated through consensus mechanisms, including Proof of Stake and Proof of Work.

• Proof of Stake: Validators verify transactions, and a committee of validators determines the block's validity. Ethereum uses this method.
• Proof of Work: Miners race to solve complex math equations, with several miners verifying the fastest miner's solution. Bitcoin is an example of a blockchain using this method.

Gas fees

Gas fees are payments required for executing transactions on a blockchain, compensating node operators. Different blockchains have varying gas fees, depending on how they validate transactions.

How is the blockchain commonly used?

Blockchain finds application in various use cases, including money transfer, purchases, storage, and tracking of items. Newer blockchains like Ethereum and Polygon enable these use cases, while Bitcoin primarily serves as a ledger.

1. Cryptocurrency: Virtual currencies like Ether (ETH) exist on blockchains and are accessed through crypto wallets for buying, selling, and managing assets.
2. DeFi (Decentralized Finance): DeFi operates financial services and exchanges on blockchain, facilitating activities like earning interest, borrowing, lending, and trading.
3. Smart contracts: Automated programs enforce coded rules through "if this, then that" logic, powering NFTs and dApps.
4. NFTs (Non-Fungible Tokens): Unique digital items with blockchain-managed ownership, including digital art, collectibles, and more.
5. Supply chain: Blockchain helps track items in supply chains, aiding in detecting counterfeit drugs or food recalls, as exemplified by IBM Food Trust.

Future potential uses of blockchain

Blockchain's future applications may include safeguarding medical records, disrupting industries like real estate, insurance, and automotive, and exploring various innovative solutions across different sectors.

What is web3?

Web3 refers to the idea of a decentralized internet that is built on blockchain technology. While web 1.0 marked the creation of the internet and web 2.0 introduced a social platform-centric internet, web3 signifies a transition towards a decentralized and publicly-owned internet that emphasizes user ownership.

In essence, web3 empowers users by giving them control and ownership, reducing external influence from third parties. The term web3 is commonly used to encompass various components of this ecosystem, such as cryptocurrencies, blockchain tech, decentralized finance (DeFi), non-fungible tokens (NFTs), the metaverse, and decentralized applications (dApps).

What were the characteristics of web 1.0 and web 2.0?

During the late 1990s and early 2000s, when the internet gained widespread popularity, it primarily served as an information source through text-based content. This era, known as web 1.0, featured personal blogs, company websites, and message boards, relying on open protocols. It was mostly static, lacking interactivity, often referred to as the "read-only" web.

Web 2.0 marked the next phase, driven by the mobile internet and dominated by social media platforms and major financial institutions. Many still use web 2.0 platforms and services today. It introduced user-generated content and customization, allowing individuals to personalize their online presence. However, the data and information shared on these platforms remained the property of the corporations that owned them. Web 2.0 is often termed the "read-write" web.

Web3 envisions a shift in ownership from large corporations to users, enabled by blockchain technology. It aims to establish a "read-write-own" web, where individuals have control over their digital assets.

What are the fundamental principles of web3?

Web3 emphasizes decentralization, transferring ownership and control from large entities to users. It addresses the trust required in web 1.0 and 2.0 by leveraging blockchain technology, which maintains a decentralized and immutable record. This allows for trustless and permissionless transactions, reducing reliance on third parties.

Web3 utilizes cryptocurrency as an alternative to traditional banking systems, offering users greater financial autonomy.

How is web3 currently applied?

Web3's current applications primarily focus on financial transactions and ownership:

1. NFTs (Non-Fungible Tokens): NFTs represent unique digital assets stored on a blockchain, serving as proof of ownership for various digital items, including art, collectibles, domain names, and more.
2. DeFi (Decentralized Finance): DeFi encompasses financial services operating on blockchain technology, facilitating trustless and permissionless transactions.
3. Cryptocurrency: Digital currency backed by blockchain, enabling transactions verified by a network of computers rather than centralized authorities.
4. DAOs (Decentralized Autonomous Organizations): Organizations without centralized leadership, governed by members who vote on proposals, with their own tokens indicating membership and voting rights.
5. dApps (Decentralized Applications): dApps utilize blockchain technology to operate, offering decentralized protocols and peer-to-peer networks for various purposes.
6. Metaverse: A virtual and augmented reality space for user interaction, where individuals can socialize, play games, customize avatars, and connect with others. Some metaverses incorporate web3 technology for ownership of virtual goods.

The future of web3

Web3 remains an evolving concept with potential innovations, including enhanced digital storage, secure internet browsers, transformative financial systems, improved online gaming and social experiences, user-centric social networks, and advanced operating systems. As web3 continues to develop, the term itself may become outdated, reflecting its integration into existing technologies.