NFT 101: A Basic guide about NFTs
Gain a better understanding about NFTs and why everyone is suddenly changing their profile pictures to pixelated punks or bored looking apes.
It is 2022 and the world is still going on about NFTs. And no, they are not just jpeg images, so right-clicking and saving them will not make you an owner of one. If you went into a gallery today and took a picture of the Mona Lisa, it would not mean you owned the original piece, and your image would be worthless. There is only one Mona Lisa, anything else is an imitation. So let’s begin with basics.
What is an NFT?
The word NFT stands for non-fungible token. This means NFTs are "one-of-a-kind" assets in the digital world that can be bought and sold like any other piece of property. They can represent real-world items like artwork and real-estate, but they have no tangible form of their own.
They are cryptographic tokens that exist on a blockchain and cannot be replicated. Artwork can be "tokenised" to create a digital certificate of ownership that can then be bought and sold.
An NFT can be any digital from music and art to photography or tickets.
But why are NFTs so valuable?
Would it not be wonderful to own a one-of-a-kind piece of art? NFTs are much like any other asset. Their worth is sometimes determined by the marketplace and the principle of supply and demand. Brand association, creators, future aspirations, ownership history, and many other factors can also influence the value. It could also be the utility of an NFT for others. This implies that the NFT offers more than just the token. This could be a physical object, event admission, exclusive in-person memberships, or future digital use.
When did NFTs start?
Kevin McCoy built the first NFT, "Quantum," in 2014. Quantum is a pixelated image of an octagon filled with fluorescent pulsing shapes and was sold for $1.4 million. We then witnessed the emergence of early phenomena's such as Crypto Punks and Crypto Kitties.
Where are NFTs kept?
NFTs are stored on the blockchain, but you can view them in a crypto wallet or on marketplaces like OpenSea or Magic Eden.
People also save their NFTs in a physical hardware wallet, such as a nano ledger, for further security.
What do I need to buy an NFT?
NFTs, like most things in the world, require money to purchase. Because many NFT projects are exchanged on the Ethereum or Solana blockchains, having some cryptocurrency is beneficial.
You can buy crypto currencies via a variety of platforms, including Coinbase, Crypto.com, Binance, Kraken, and many others. Remember to always do your own research before taking any action.
Some of the jargon explained.
Minting - Minting is the process of creating an NFT and recording it for the first time on the blockchain. It is also a term that is typically used to indicate when someone becomes the first owner of an NFT.
Reveal – When an NFT has been ‘revealed’ and what it is, can be seen by the owner. This is usually after minting and dates are declared among the project communities.
Floor Price – This is the lowest price the NFT project is currently being sold for. It is usually updated in real-time.
Blockchain - A blockchain is a list of records called blocks that are linked together. Each block contains pieces of information about the previous block which then forms a chain. It is a decentralized, shared digital ledger that enables the process of recording transactions and tracking assets. Therefore, the data once recorded cannot be altered.
Are NFTs here to stay?
We believe so. NFTs have changed the game for creators. It has given ownership back to individuals like artists and musicians, allowing them to sell their work directly to customers, cutting out the middleman.
Even though just a small percentage of people have experimented with NFTs. The market continues to grow, and it is great to be in the midst of a technological revolution.
Welcome to FinTech Fridays with Gadgette. For most of us that are on-the-go Monday through to Friday; being busy with our careers, families are other commitments, FinTech Fridays is your dedicated weekly one-stop-shop for all the latest news within the world of Financial Technology and tips on Digital Banking which you may have missed out on.
This week, WhatsApp added a number of new features, including the option to mute others during group calls (via Android Central). This sanity-saving tool appears to be useful not only for muting folks who fail to do so, but also if you're in the same room as someone else in the conversation and don't want to hear an echo of their words.