## **Discover Native Tokens**

There are currently two ways to make your NFTs:

For the less tech-savvy: through someone else. The showcase section (under NFT Support) has a few services that offer this.

Tech-savvy users can issue NFTs on a Cardano node. If you want to have full control over your tokens, you need to mint them yourself. And this is what this section is all about.
Minting requires a certain amount of skill in navigating and working with Linux through the terminal and a running Cardano node.

We will not go into how to spin up a Cardano node, but this is covered in the integrate Cardano category.

**What are native tokens/assets?**

The Cardano Blockchain has the unique ability to create, interact with, and delete bespoke tokens (or 'assets') natively. In this example, native means that, in addition to sending and receiving the official currency ada, you may interact with custom assets right out of the box - without the use of smart contracts.

Native assets can practically be treated as ada in every sense because the capability is already built-in. Of course, there are some limitations (which we'll discuss later), but you can think of native assets as a way to produce your own custom for the time being.

**What you need to know**

Before we go any further, here's a quick rundown of what you need to know.

**How we interact with the blockchain**

Almost all interactions with the Cardano network/blockchain are transaction-based. We can divide interactions into two tiers with this in mind.

![](https://developers.cardano.org/assets/images/overview_nfts-a89fdf3cca550bca8c11660f6e26df0e.svg)

The top layer emphasizes a visual approach and covers standard interaction. Sending and receiving ada or tokens, delegating your stake, and voting are all examples of this. Wallets such as the full node Daedalus wallet or the lighter Yoroi wallet can be used to carry out these interactions.

However, if we want to drill down and have more options for interacting and creating "custom" interactions, we must go one step deeper. We'll need a whole node in this layer to send transactions with specified parameters. A full node is often a built binary from the official latest cardano-node repository. There are more options, but we'll concentrate on the Linux version.

So, what kinds of sophisticated transactions can we create with a full node, and how can we do it? Working on the command line and issuing transactions from there is the current method. Stake pool operators must utilize this method of transaction to register their stake pool or make changes to their commitment, among other things. However, we may utilize this method to produce, send, receive, and burn tokens.

In the future, this probably will also be the place where smart contracts are written, tested, and maybe executed if there isn't a visual frontend.

**Constraints when working with tokens**

Since we already learned that interaction with the network is almost always a transaction, we need to be aware of a few things enforced through network parameters.

A fee must always be paid whether issuing a transaction or sending something. Currently, the cost is determined by the size of the transaction (read: how much "information" gets sent). The size of a transaction can range from a simple "A transmits 2 ada to B" to a considerably more sophisticated transaction with additional metadata.
There is a minimum value that must be sent. Currently, the value is set to 1 ada. This means that if we wish to send a token, we must include at least one ada in the transaction. This is to avoid huge amounts of custom tokens from being created and the network being flooded with custom token transactions.

We currently (June 2021) have no standard way to define an NFT. There is an open pull request, however. Most of the current NFTs on Cardano mostly follow the proposed structure, as we will in this section.
Please keep those constraints in mind if you want to work with native assets.

**Difference between "regular" token and NFTs**

In terms of technology, there isn't much of a distinction between "regular" tokens/native assets and NFTs. This is due to the fact that both can be produced using the cardano node cli and are native assets.

Unlike fungible native assets, which might consist of millions of interchangeable tokens, an NFT is a single native asset that cannot be re-minted or destroyed, and it exists on the blockchain in perpetuity.



Discover Native Tokens

Minting Native Assets

Minting NFTs

## **Authenticated Products on Cardano Store**

The recently opened Cardano Store offers sustainably produced promotional items and innovative products. The latter category in particular offers blockchain enthusiasts products and product prototypes that connect the physical world with the virtual world using blockchain technology. The first product of that kind is the POC Hoodie, which is equipped with an NFC chip that can be used to verify the authenticity of the hoodie based on the unique possibilities of the Cardano blockchain. A similar approach was already used in summer 2023 with the Lacrosse World Cup Jersey showcase. While the revised approach of the POC Hoodie offers some improvements, particularly in the area of security, it is not the end of the development process.

In the following, we briefly outline the background to the development of the POC Hoodies, provide an overview of the actual implementation and conclude with an outlook on future improvements. First, however, we will show how the hoodies work and how users can validate them.

**Proof of Concept Hoodies**

For the owner of a POC Hoodie the verification process is as straightforward as tapping the NFC tag that’s knitted into the hoodie which redirects them to a website where the verification status is displayed.

Whereas this way of verification is convenient and easily accessible for also non tech savvy people, it relies on a centrally hosted website which essentially one has to trust when being provided with the information of the hoodie’s authenticity. However, if equipped with the right blockchain knowledge and access to tools like a Blockchain Explorer, users can perform further verifications independently from the output of the website by looking up the asset name returned within the URL string of the NFC chip and checking if the policy ID of the found NFT matches e886a328333c28bf3e8fc527206b02dc9ff65fb04cf569ec71983330.

What actually happens in the background when the user taps the NFC tag is that by tapping, the smart phone gets provided with a URL that contains encrypted data that identifies and allows the backend to verify the corresponding NFT on the Cardano blockchain. Following that URL the user ends up on the already mentioned website, which forwards the encrypted data to a validation service that is able to decrypt it and use the encoded information (namely the asset id) to look for a corresponding NFT on the Cardano blockchain. If it finds one, the metadata of this NFT is analysed and compared to the data stored on the NFC chip and thus verified. This verification is based on asymmetric key cryptography meaning a signature made during the minting process is verified with the key data sent within the encrypted data.

The data on the NFC chip is encrypted using symmetric encryption keys, which means there remains a shared secret between the Hoodie (more accurately the secret was available during the preparation of the NFC chip) and the validation service in the backend. Moreover, the NFC chip keeps track of a counter which is incremented with every readout/tapping of the tag and therefore allows the backend to check for so-called replay-attacks (as it can check if a given link has already been used).

The process is depicted in here:

![](https://developers.cardano.org/assets/images/nft-merch-store-poc-9562fef000384313b739c79233c48f93.png)

All NFTs minted corresponding to the physical Hoodies can be found following this link to pool.pm or looking for the policy ID e886a328333c28bf3e8fc527206b02dc9ff65fb04cf569ec71983330 (the hash of the minting policy script) in any other suitable Explorer.

**Future Work**

The current solution is considered a POC because there are various areas of improvement left open. A major drawback is e.g. that the verification service itself is centrally hosted and the validation of the product’s authenticity cannot be completely done without that service. The NFTs bound to the Hoodies are based on the CIP-25 NFT standard which lacks certain features of the more dynamic and versatile standard CIP-68. Defining a similar standard to CIP-68 that leverages the same mechanisms but applying it to the asset ownership transfer challenge will ensure a secure and trustless transfer of ownership of the digital asset that is tied to the physical good. In that case users can own a token in their wallet, that points to the smart contract responsible for managing the actual ownership and only if a corresponding inline datum storing the list of actual owners points back to the asset, the ownership is considered valid.

The biggest improvement though would be the use of even more sophisticated NFC chips which allow for the signing of a presented payload leveraging asymmetric key cryptography which would enable a setup, where there is no shared secret between the customer owned physical goods and the centrally hosted backend. This solution would enable multi signature schemes when it comes to the transfer of ownership of the corresponding NFT.



Authenticated Products on Cardano Store

There are currently two ways to make your NFTs:

Discover Native Tokens

Course Details

Level

Ratings

Modules

Lessons

Holder $WORK Price

Contact Us

Documentation

Navigation