Tim Mattison

NFT presentation research

My questions

  • How do I explain wrapped Ethereum?
    • The ERC-20 standard was created after many people had Ethereum tokens. Ethereum tokens don’t conform to ERC-20. “Wrapped Ethereum” or wETH is a way to make Ethereum conform to the ERC-20 standard. This allows wETH to be exchanged for other currencies. ETH can be exchanged for wETH 1:1. This is called wrapping (converting to wETH) or unwrapping (converting to ETH).
  • How do I explain dApps?
  • How do I explain fungible vs non-fungible tokens?
    • Fungible tokens
      • Conform to ERC20
      • Divisible, can you split an amount of a token with another wallet
    • Non-fungible tokens
      • Conform to ERC721
      • Not divisible (you cannot own a partial NFT) so each token is always wholly owned by one address
    • Multi-token standard
      • ERC1155
      • A single smart contract can represent multiple fungible and/or non-fungible tokens
  • What is gas?
    • Gas is a fee you pay to have your contracts executed. Supposedly paying less makes your contract run slower - https://www.youtube.com/watch?v=AJvzNICwcwc. This video is terrible “the gas mechanism makes Ethereum extremely efficient at allowing (allocating?) scarce resources on the network”.
  • What happens if a transaction runs out of gas?
  • How do I explain DAOs?
    • Decentralized Autonomous Organization is a kind of dApp
    • It automatically performs certain kinds of operations. For example, you could have a venture fund DAO that people could put money into, then they could vote on where the money goes, and then any money returned to it would be distributed back to investors based on how much they staked.
    • How do DAOs get data from outside the blockchain? Oracles. Why? Because the smart contracts need to have all of the data in one place. If they reach out for data different nodes could end up with different states.
    • Oracles are problems for smart contracts since they are a single point of failure/compromise. This is why distributed oracles (e.g. chain.link were created). They have multiple oracles that combine to create consensus.
  • What are these tools?
    • Remix, Truffle, and Tenderly
  • What is ERC-20?
    • ERC-20 is a standard for creating tokens on the Ethereum blockchain. It requires compliant tokens to implement 9 methods and 2 events.
    • Methods
      • function name() public view returns (string)
function symbol() public view returns (string)
function decimals() public view returns (uint8)
function totalSupply() public view returns (uint256)
function balanceOf(address _owner) public view returns (uint256 balance)
function transfer(address _to, uint256 _value) public returns (bool success)
function transferFrom(address _from, address _to, uint256 _value) public returns (bool success)
function approve(address _spender, uint256 _value) public returns (bool success)
function allowance(address _owner, address _spender) public view returns (uint256 remaining)
    • Events
      • event Transfer(address indexed _from, address indexed _to, uint256 _value)
event Approval(address indexed _owner, address indexed _spender, uint256 _value)
  • What is layer 2?
    • Layer 2 refers to off-chain networks to TODO
  • What is an internal transaction?
    • References
    • It is essentially a trace of a contract calling another contract
      • Using these opcodes
        • CREATE - 0xF0 - create a child contract
        • CALL - 0xF1 - calls a method in another contract
        • CALLCODE - 0xF2 - apparently even the reference site doesn’t know
        • DELEGATECALL - 0xF4 - calls a method in another contract using the storage of the current contract
        • SELFDESTRUCT - 0xFF - destroys the contract and sends all funds to a specific address

Three major blockchains to be aware of

Smart contract terminology

  • allowance gives the smart contract the ability to transfer between two parties
  • transferFrom transfers some or all of the allowance

5 major misconceptions about NFTs, cryptocurrency, and block chains

  • What people think - Only the owner of an NFT can see it. Reality - Anyone can see an NFT and even copy it.
  • What people think - NFTs will stay on the block chain forever. Reality - Only the contract and ownership information is on the Ethereum blockchain forever.
  • What people think - NFTs are images on the block chain. Reality - NFTs are links on the blockchain to images stored elsewhere. Beeple’s famous image would cost ~$470k to store on the Ethereum blockchain. Many NFTs are already broken because their images are stored carelessly. This has been used for outright scamming by minting NFTs and then destroying the images. (Significant potential for abuse in my opinion)
  • What people think - NFTs are all limited edition. Reality - NFTs are mostly limited edition but unless you check the contract you can’t be sure. (Significant potential for abuse in my opinion)
  • What people think - NFTs are randomly generated when you purchase them. Reality - NFTs are generated ahead of time and if you know what you’re doing you can increase your chances of obtaining one with the attributes you want. (Significant potential for abuse in my opinion)

  • What people think - Blockchains follow rules that can’t be changed. Reality - They can be changed if people agree to change them. However, getting a critical mass of people to accept changes is very difficult.
  • What people think - Transactions are anonymous. Reality - Pseudonymous. Block chains are forever. If you are associated with a wallet your anonymity is gone.
  • What people think - Blockchain rules are infallible, or if something goes wrong you’ll get your money back. Reality - Smart contracts have bugs and sending your crypto to an incorrect or invalid address can burn it for good. Even setting the Ethereum “gas limit” too low can make you lose money.
  • What people think - Cryptocurrencies will displace banks because you can send money very quickly for free. Reality - Transactions can get stuck for hours, days, or longer. Transaction fees can be high if the network is busy. If a transaction fails the originator still pays the fees, no refunds.

Differences between the three?

  • Bitcoin mostly “just” a crypto currency although the original implementation did have features to support more complex transactions. Those features have been mostly disabled except to enable a few additional standardized transaction types like multi-sig.
  • Ethereum has the Solidity programming language to write smart contracts
  • Solana?

Avalanche FAQ - https://support.avax.network/en/collections/2353492-blockchain-basics

Out of gas transaction example - https://etherscan.io/tx/0x679d887dd23623c5477bffb62f854215b9736734c89b4579a6e9e1a93457a8c3

Proof of stake notes

What is going on?

sudo fs_usage -f diskio

https://cloudflare-ipfs.com/ipfs/QmeSjSinHpPnmXmspMjwiXyN6zS4E9zccariGR3jxcaWtq/1

Check quality of NFT

Beeple

Bored Ape Yacht Club BAYC

  • First one - ipfs://QmeSjSinHpPnmXmspMjwiXyN6zS4E9zccariGR3jxcaWtq/1

Bored Ape Yacht Club #1

Ethereum “yellow paper” - http://gavwood.com/paper.pdf

Post explaining cost per GB on Ethereum - https://ethereum.stackexchange.com/a/896

Looks like 172 Gwei is today’s gas price. 20k gas to store something with Gsset (for an SSTORE). SSTORE stores 32 bytes of data.

Beeple image size = 319168313

Beeple image size / 32 = 319168313 / 32 = 9974010 (rounded up by one)

9,974,010 SSTORE operations to store the image

Gas for 9,974,010 SSTORE operations = 9,974,010 * 20,000 = 199,480,200,000

Gas to gwei = 199,480,200,000 * 114 = 22,740,742,800,000

Used https://nomics.com/markets/gwei-gwei/usd-united-states-dollar for calculation

Gas vs. gwei from Reddit - https://www.reddit.com/r/ethereumnoobies/comments/gyrheo/comment/ftcqclb/?utm_source=share&utm_medium=web2x&context=3

1 wei is the smallest unit of eth. 1 gwei is one billion wei.

The gas price is how many gwei you pay for 1 gas.

Gas is a way to measure how much computation a smart contract or a transaction requires.

The Gas limit is how much gas you are willing to spend for a transaction to go through.
This prevents faulty transactions to burn unlimited amount of ether because they went into an infinite loop.

https://chipin.lol/

Marketing rug pull - algorithmically generated, problem is that ownership can be concentrated, NFTs can be minted ahead of a game release