THE CRYPTO BIBLE
Web3, 420:69 GM
⁶⁹Web1. is logging onto platforms using your email and password to access media to buy things online or even log into companies' online gaming databases. Humans are enthralled to embark on the internet.
⁷⁰Web 2. to access the internet employing a social presence, what we know as Instagram, Twitter, and Youtube. Companies rely on our internet usage, and individuals are paid when certain milestones are met.
⁷¹Web 3. where blockchain technology creates this part of the internet where people are identified by decentralized wallets that claim ownership of certain records of transactions, NFTs, and any crypto-asset apart of that Blockchain.
In the beginning, there was a blockchain: technology, a collection of metadata used to keep records of transactions and contracts. Blockchains are the result of cryptocurrencies we know today as Bitcoin or Ethereum.
When transactional history is established on a chain, like sending a friend 1 ETH, a record is made. The record of the transactions is deemed blocks, thus making the Blockchain a chain of recorded transactions.
The Blockchain is decentralized; there is no valid owner of these records. Instead, individuals can become contributors by buying, selling, or mining the data. Buyers and sellers trade between electronic contracts that miners create. The three factors will create a digital ledger, making the blockchain proof of a digital order book for a specific coin.
Welcome to the decentralized exchange market, where investors swap coins and tokens at all-time highs for ones at all-time lows. Where supporters create infinite value for NFTs, it's a shitload of information, some of which you may never grasp. But, with the combined effort of your due diligence and this NFT Bible, you will become a master of browsing the web and acquiring financial assets.
Non-Fungible Tokens (NFTs)
In simple terms, NFTs are representations of Blockchains. These representations can be in the form of art, music, or even in the guise of your favorite childhood memory. In reality, it's a piece of metadata that points to a blockchain's existence. The representations can be bought and sold at the Blockchain's coin value.
Let us look at OpenSea, the first and largest NFT market on the Ethereum (ETH) blockchain.
One of Ethereum's NFT Collections is the Bored Ape Yacht Club. Collections are essentially just unique jpeg images, but with digital ownership, NFTs can provide utility and incentives that the creator of the NFT essentially promises to provide. For example, NFT projects allow digital Web 3 brands to market themselves by giving exclusive club memberships and metaverse collectibles for virtual worlds. Bored Ape Yacht Club is one of over a million NFT projects on different blockchains.
To buy, sell, or even create NFTs like the ones on open sea, you must create an account using your Metamask Wallet. Finding an NFT is like finding a digital piece of yourself.
A cryptocurrency wallet is a program, software, or system that enables the storage of public and private keys, creating the functionality of sending, receiving, and monitoring money online. There are three types of wallets:
Coinbase and Binance are examples of online-based wallets that create wallets for users by providing public and private keys derived from their software. But, this is trusting your decentralized digital assets in the hands of a company.
Your public and private key are stored on a USB Stick. Without the stick, there will be no access to the Ledger.
The responsibility for knowing what your private and public keys are will be left up to you and stored suggestively on a piece of paper that is in a safe place.
Metamask is an offline software wallet. Because of its qualities, the wallet is the most popular decentralized wallet. However, the most recommended way to store crypto is through a hardware wallet. The most popular is a brand called Ledger.
Coin Vs. Token
Coins and Tokens are the driving forces of the economics behind cryptocurrency. So it's crucial to know the difference between the two.
A coin, like a Bitcoin, uses its Blockchain to keep track of all the metadata.
- i.e., Ethereum
A token is like a coin, but it is a derivative of a specific coin's Blockchain.
- i.e., Non-Fungible Tokens
A token can become a coin by bridging its network, thus producing a blockchain. For example, DeFi Kingdoms' $Jewel started as a token on Harmony One's BlockChain. It then became a coin on Defikingdom's Blockchain, providing the functionality of derivatives such as Crystavale.
A Stable coin is a utility token built on a blockchain that is not volatile. A stable coin is pegged to the U.S dollar and should always stay at that price. Allows for the security and stability of fiat while still trading crypto.
It's ultimately up to you as an investor to decide where you shall allocate your bags.
Defikingdoms is one of the many gamified NFT projects that focus on utility for NFTs with a play-to-earn system. The same crypto earning strategies are applied, but with the mask of a game behind it. Money will be made for playing the game.
While there are many genres of NFT games, projects such as EvoVerses are working on ways to enhance more of the play aspect in play to earn by revamping critical games such as Pokemon.
These games work by centralizing their ecosystem on a governance token. In EvoVerse's case, this token is called $EVO, which runs on Harmony One's Blockchain. In addition, the NFTs, or art-like addition to the game, are considered EVOs. Actions such as breeding and battling with your EVOs will all be at the cost of the governance token.
The most lucrative thing about NFT Games is the various opportunities to earn more of the coin or token without investing any more fiat.
Yield is the output per input or investment.
Farming represents the possible exponential growth of an asset.
Yield Farming is when you put your crypto in a contract that makes optimal earnings of more crypto. Think of Yield Farming as a sort of banking and or saving system for cryptocurrencies. Most NFT-based projects provide opportunities for investors to practice yield farming within their projects. Annual Percentage Rates on a currency can range from 300% to 1000% on your investment.
After you've found a coin, token, or digital asset valuable enough to own, below are three of the many ways to find yield farming opportunities:
- Being a Liquidity Provider
Investors will provide coins and tokens to a decentralized exchange that rewards the investors with the fees produced from the transactions being made on the exchange.
- Lending and Borrowing
- Lending is the act of lending out your assets on a platform to be rewarded the native coin or token of the platform at a certain apr.
- Borrowing is the over-collateralization of your assets on a platform to receive a set amount of a native coin or token and earn it at a certain apr.
- There are ways to lend, borrow, and lend on what you borrowed to increase earning rates.
Buying a coin or token and then staking it to earn it at a specific apr is yield farming. For example, liquidity providers create LP tokens staked in Liquidity Pools to acquire a native coin or token rewards.
Yield farming is a great way to earn passive income on any crypto assets you own. Of course, as an investor, it is crucial to be wise and methodical about your financial decisions. Make sure your crop is planted in the right season, or your money can wither away.