If you asked this question, you are not the only one. Millions of people across the world are trying to figure out the same. If you do not know what exactly NFT is, you are still not alone. It is relatively a new term, and like you, there is an umpteen number of people who are curious and are trying to demystify it.
This article is for beginners only, who want to understand its basics. Some of the analogies may not be perfect but are used for making some complex concepts easy for beginners. For all experienced readers who have either launched their NFT or are comfortable with the subject, share your experience in the comment section.
So, let’s get to the meaning of the term, what does it mean and how could you possibly participate and contribute?
What is an NFT?
NFT stands for non-fungible token. If we have to define it in a simplified way, they are one-of-a-kind digital assets that represent real-world objects. NFTs can also be digital items, such as digital art, GIFs, in-game items, and tweets.
An NFT can only have one owner at a time as the Ethereum blockchain secures it. This technology does not allow to modify the record of ownership or copy/paste a new NFT into existence. As the ownership is managed through the uniqueID and metadata, no other token can replicate the same. For example, if your digital asset is on the online platform and it isn’t converted to an NFT, there’s a chance it could be copied and claimed by others to be their own, and it might be difficult for you to prove it even. But in the case of an NFT, that wouldn’t be possible. And that’s because of the uniqueID.
These tokens are called non-fungible because they are not interchangeable, unlike fungible tokens like bitcoins. Hence NFTs cannot be exchanged in the same manner that cryptocurrencies can. All transactions in NFTs are done online and are controlled by a digital ledger. (For other basic crypto terms, you may visit this page).
NFT isn’t limited to art and artists
This latest tech development is a massive gamechanger for artists, musicians, and other creative people. It resolved their most significant issue – the ownership of their creatives in the digital space. It’s a new way to create digital assets, monetize intellectual property, and verify the validity of real items over the internet.
But before you jump to the conclusion that NFTs are only artists and musicians, consider the following two NFTS. Even a tweet or a LinkedIn post can be converted to an NFT.
Beyond these, this blockchain-backed technology can help resolve issues for a broader audience and in real life. For example, Domain Name Ownership, Real Estate, Identification and Documentation, Real-World Assets, and on and on. Let’s take the example of a real-world asset. We know a physical property deed is an ultimate document that proves our property ownership. But imagine what if someone comes with a sale deed with your signature, claiming that you have sold the property to him? Such forged deed activities are not common, however not unknown.
There are many incidents reported involving a notarized fraudulent signature, and a new sales deed is being done. Now imagine if your deeds are transformed into tokenized digital assets moving your physical assets like houses or land into the blockchain network, how secured it would be. No one can create a fake owner paper, and if they do, you can still prove your ownership.
It might take some time for the NFTs to become mainstream, but keeping in mind the values that it brings, its benefits will undoubtedly touch people’s lives beyond art and collectibles!
For now, let’s focus on the art and other collectibles that have been making crazy news for the last year!
Before that, let’s recap some of the breaking news in 2021 that made you anxious and forced you to think why and how these NFTs are sold for the kind of prices you never heard of!
- Pak’s ‘The Merge’ — $91.8m
- Everydays: the First 5000 Days — $69.3m
- Beeple’s HUMAN ONE — $28.985
- CryptoPunk #7523 — $11.75m
- CryptoPunk #3100 — $7.67m
- CryptoPunk #7804 — $7.6m
- Beeple’s Crossroad — $6.6m
- XCopy’s A Coin for the Ferryman — $6.034m
Where do you find those NFTs?
One can find them on marketplaces that help you buy, sell, or trade NFTs. There are many such marketplaces, each with its unique collection. OpenSea (the leader in NFT sales), Axie Marketplace, Larva Labs/CryptoPunks (you might say who has not heard about it!), NBA Top Shot Marketplace (if you are a fan, you will definitely visit), etc. Then there are more like Rarible, Looksrare, SuperRare, Nifty Gateway, etc. Every other day we come to know about new ones, and it isn’t going to stop any time soon.
So you might think NFT marketplace as a kind of digital exhibition or an e-commerce site where you would find the stuff you are interested in – right from animated videos to music, football match clips to tweets, and so on. The answer is yes and no. Yes, because these marketplaces have items that are up for sale for a price.
No, for several reasons. NFT marketplaces are giving more power to content creators than ever before. It is a much more secure platform than the usual digital art exhibition because it is powered by intelligent technology.
Secondly, unlike e-commerce or any digital art exhibition, you can not pay through the usual currency or online wallet. The payment is made only through a crypto wallet – and there are several options available. The crypto wallet keeps cryptocurrencies – from bitcoin to all alternative coins, including Etherium, Cardano, etc. They are a pretty safe place. For more on the crypto wallet, please read our previous blog.
Okay, let’s get started.
So now you have some idea about what is an NFT and why unique ownership is important, why not make the first purchase? For the sake of an example, let’s open looksrare.
You have two options – Explore and List. To start with, let’s buy or say explore what is available. Click EXPLORE. That will take you to a page where you can see the collection.
Let’s go, for example, Nudie Community Official #3138. Isn’t she too cute to be missed out on?
You would like to know more about it. Click the ABOUT tab, it is mentioned:
The Nudie Community is an NFT collection of 10,000 unique ERC-721 tokens stored on the Ethereum Blockchain.
You can also check the Token ID, Creator, Contract, and Token Standard in the About section.
Suppose we go to buy this. You need to connect your wallet – click on Connect Wallet green tab. It will take you to another screen like this:
The site recommends MetaMask wallet, so let’s go for it. Make sure you are using Google Chrome. Remember, if you aren’t browsing on google chrome, it will show you an error. If you want to know more about MetaMask or want to set up the wallet, click here.
You login in to MetaMask. Make sure you have sufficient balance. You can see I do not have sufficient balance, hence I need to add some more currencies.
You can make an offer by clicking the green tab. The NFT is now yours. Remember, NFTs are minted through smart contracts that assign ownership and manage the transferability of the NFT’s. And yes, go and add your NFT as your profile picture on Twitter – as long as you have Twitter Blue.
Isn’t it as tough as you had assumed?
Similarly, if you want to list one of your creatives, you can do it in a few minutes. Please follow the video below:
NFT are BIG and they are here to stay
Yes. Undoubtedly. And it will create a whole new chapter for many who leverage the technology for their benefit. Many have already started, and millions will join soon to create another revolution.
Think about what you can do with it?