Everything You Need To Know About NFTs (Non-Fungible Token)
There is no doubt there’s plenty of information out there about what an NFT (Non-Fungible Token) is but what is hard to find is something that we can easily understand. And by we, I mean people that aren’t crypto heads or enthusiasts, something for us regular people. So we are here to provide you with some information on NFTs that’s easy to get your head around. We will be explaining everything from “What is an NFT?” Why would someone want to buy an NFT?” How does the concept of NFTs work?”, as well as the types of projects that are out there. We can’t tell you which project to invest in, as like any other investment, before putting in your money, you need to do some research with due diligence.
Making It Easier To For You To Facilitate NFTs
So if for any reason you get confused or have any questions about it please please please feel free to message us on Instagram, Twitter or Messenger. We will be more than happy to provide some sort of clarity. We understand the frustration of wanting to know something but not always being able to get a clear answer. After all we all want to jump on this new age wagon, that is to shape the future of the economy.
So let’s jump right in, or if you would like to go straight into the topics you are looking for, here are the quick links to each topic:
NFT is an abbreviation of Non Fungible Token. Now that we know what it stands let’s jump in to understand what it means and most important what it actually is.
Fungible means replaceable, or being the same as something else. A dollar bill, for example, is fungible, you can swap it for a different one and you’re back where you started, it’s a different dollar bill but to you it’s the same; it’s worth a dollar. Now imagine that your dollar bill had been signed by a sportstar or celebrity. Would you still swap it for a different dollar? No, it’s now unique, non-fungible, and it has an intrinsic value because it is a one-of-a-kind. That’s how NFTs work, they’re unique, autographed and therefore collectable.
An NFT comes in digital form, it can be virtually anything virtual; image, audio, film, or even a cosmetic adaptation within a video game to enhance a character with weaponry, armor etc. When created, or to use the proper technical term ‘minted’, in a blockchain, it becomes non-fungible due to its ability to be uniquely identified and digitally owned. The value of an NFT stems from its collectibility or rarity, and can increase in value due to demand. Some of them also come with perks, benefits of ownership known as utilities; these can come in the form of exclusive merchandise, access codes for events or gifts that are given purely for owning a specific NFT. The combination of collectibility, the challenge of finding that rarest of NFTs, the lure of the benefits offered by the utilities which come with it, partnered with the use of new and exciting technology explains why NFTs have taken off. Like the speculators of old, people are drawn in by the thrill of the chase.
>> What is the purpose of an NFT?
What NFTs do is provide evidence of ownership over something which initially seems endlessly copyable by recognizing the difference of an original over a copy, something which was previously difficult to do. The market is built on respecting this recognition, those who commit to purchasing an NFT are committing to its ownership and in turn establishing the value of it.
>> So what does the future hold for NFTs?
Their future and our future are closer knit than many people would imagine or even realize. Companies are seeing the unique aspects of NFT technology as a means to offer, for example, teared access and entry levels at festivals, events and concerts. The growing metaverse will soon see user ID built into non-exchangeable NFTs. There are many ways in which NFT technology will be interwoven with modern life, often without us even noticing.
Why Would Somebody Buy Or Need An NFT?
Currently people are misunderstanding why someone will want to own something digitally and even though NFT can represent many things but having an NFT is similar to why people have a Rolex or Louis Vuitton bag, it is status and the authenticity to the value of things, as the blockchain is a transparent ledger of who own it as transparency matters. Moreover, NFTs can also bring different benefits or Utilities as they call them in NFT land.
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To gain profits
As with any type of speculative spending, there is no guarantee that any NFT will automatically go up in value. There is, though, the benefit currently of getting in at the start-up stage, there is the chance of grounding out to zero or seeing huge gains. As with anything of this nature, never spend more than you can afford to lose.
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To access exclusive perks
The utilities or perks of owning an NFT can be thought of as a kind of dividend, a payout given to the holder. They can come in the form of exclusive entry to physical events, online events, forums, or a sneak early peak at forthcoming NFT releases to give them first choice of what might be coming out soon.
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Secure digital ownership
It’s unfortunately the case that wherever there are legitimate and honest people, there are thieves. Using decentralized blockchain as a means of verification makes NFTs remarkably safe; however, the lure of easy money has seen a recent rise in scammers. Never give any information to anyone about your digital wallet.
Ethereum is the main player when it comes to NFTs, it’s where the vast bulk of them are created and stored, although there are other networks such as XRPL, Flow and Tezos. The transparency of blockchain allows anyone with access the ability to check the validity of ownership while still being able to keep your anonymity.
One of the beauties of the system is that anything digital can be “tokenized” in this manner, whether it be art, audio, video, an item from a game, a video still; the opportunities are endless. In addition, because the blockchain only holds ledger information and not the original file, there is no limitation to the file size of any NFT.
As with all creative and intellectual property, copyright is not included with the NFT unless specified. If you buy a painting, you can’t reproduce it as you do not own the copyright, the artist does. It’s the same with digital art and NFTs. In some instances though, the copyright will be included and this will be clearly stated in the purchase procedure.
The Future Us Of NFTs Is Limitless
As already mentioned, the future use of NFTs will not be limited to the creative field. It’s possible that universities could administer degree certificates to students in the form of NFTs to enable future employers to view their education history, or event organizers to release tickets and VIP advantages in this form to help stamp out ticket fraud which can be a major problem.
1. Art
Art is where NFTs were born, the first one sold was a short digital video. It was seen as a way to allow artists to sell and keep track of their work which up to that point was being widely shared and unattributed online. The largest proportion of NFTs are in the visual arts and where the biggest price tags lie. Digital art, short videos and gifs are flying off the virtual shelves with often million dollar premiums.
Example: Beeple | Notable Works: Everydays: The First 5000 Days, sold at Christie’s for $69 million.
2. Music
Music is something which has been sold but also freely shared for many, many years, first with cassette tapes, then CD copies and now very easily via various digital means. Creatives within the music industry, musicians and DJs alike, have taken a keen interest in the growth of NFTs and are now selling their music through its machinery, often with great returns.
Example: Kings of Leon – “When you see yourself” album
3. Video games items
The video game industry is big business, millions of dollars are exchanged for games and in game purchases. However, what’s on offer within the games are generic. In order to stand out from the crowd, you can purchase in-game NFTs in the form of skins or characteristics which are completely unique. In addition to the regular DLC, limited editions can be tendered on the NFT marketplace.
Example: Axie Infinity game
4. Trading cards/collectible items
People have been collecting and trading cards for centuries, companies would print them as a form of advertising and people would buy and swap them. Cigarette cards are probably the best well known form of this, then came sports such as baseball and football, and then Hollywood joined in with film cards. NFTs are the perfect vehicle for the next generation of this tradition. There’s always that one rare card which can be added to a collection.
Examples: Gods Unchained/SoRare/Candy Digital
We hope that this helps you, even if it is just in some ways, to understand more about NFT is all about and why it is so important for the near future. If you have any questions at all please feel free to join our discord group here: https://discord.gg/wUA6AhXr and our team and many others like you will be happy to help.