What are Smart Contracts
A simple definition of smart contracts might be that they are immutable computer programs that operate independently on a blockchain and are executed when certain conditions are met specified by the smart contract developer.
You can think of a blockchain as a public ledger or database that perminently records every single transaction or function called in the smart contract. All smart contract transactions are made public establishing full transparency of the smart contract activity.
Transparency is important and is one great reason to use a smart contract. If activity on the blockchain regarding your smart contract is erronious it will be immediately visible which will enforce the terms of the contract.
Smart contracts “live” at an address on the blockchain. Someone interacting with the smart contract also has an individual address, most frequently called their “wallet.”
What is an NFT
It can be pretty confusing to understand what an NFT is if you are just hearing the term. It has become a popular topic and NFTs or “Non-Fungible” tokens aren’t going away anytime soon. Fungible just means the value is interchangeable with another asset of the same value, like Bitcoin. For example a one dollar bill can be exchanged for another one dollar bill.
A Non-Fungible Token (NFT) is a representation of an asset that can be of any value. An NFT is not a cryptocurrency. For example an NFT can be a representation of the percentage value of a property in real estate. You could own 3% of the total value of an apartment complex represented by an NFT. Other NFTs represent digital assets like artwork and digital game assets.
An NFT is just another smart contract that adheres to certain standards( contains specific methods ) agreed upon by the blockchain community so they can be operable on different wallets and platforms. An NFT uses the ERC-721 standard.
Most NFTs are supported on the Ethereum blockchain along with it’s cryptocurrency. You use something called “Gas” on the Ethereum blockchain to pay for an NFT smart contract transaction. A typical transaction would be the Mint method that adds the NFT purchaser’s Ethereum wallet address to the NFT smart contract, thus proving ownership.
