NFTs

NFTs are currently taking the digital art and collectibles world by storm. Digital artists are seeing their lives change thanks to huge sales to a new crypto audience. And celebrities are joining in as they spot a new opportunity to connect with fans. But is digital art the only one way to use NFTs. Let's find out ...

What is an NFT?

NFTs are tokens that we can use to represent ownership of unique items. They let us tokenise things like art, collectibles, even real estate. They can only have one official owner at a time and they're secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence.

NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable for other items because they have unique properties. Fungible items, on the other hand, can be exchanged because their value defines them rather than their unique properties. For example, ETH or dollars are fungible because 1 ETH / $1 USD is exchangeable for another 1 ETH / $1 USD.

How do NFTs work?

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs.

Where can I buy NFTs?

The sites listed below are just some of those that sell NFTs:

OpenSea

SuperRare

Nifty Gateway

Foundation

VIV3

BakerySwap

Axie Marketplace

Rarible

NFT ShowRoom

How to make and sell an NFT

01. Buy some cryptocurrency

02. Create a digital wallet to pay for your NFT

03. Add some cryptocurrency to your wallet

04. Connect your wallet to an NFT platform

05. Upload the file you want to turn into an NFT

06. Set up an auction for your NFT

07. Add a description to sell your NFT

08. Pay the listing fee to sell your NFT

Advantages of Non-fungible tokens (NFT)

NFTs and Ethereum solve some of the problems that exist on the internet today. As everything becomes more digital, there's a need to replicate the properties of physical items like scarcity, uniqueness, and proof of ownership. Not to mention that digital items often only work in the context of their product. For example, you can't re-sell an iTunes mp3 you've purchased, or you can't exchange one company's loyalty points for another platform's credit even if there's a market for it.

An NFT can only have one owner at a time. Ownership is managed through the uniqueID and metadata that no other token can replicate. NFTs are minted through smart contracts that assign ownership and manage the transferability of the NFT's. When someone creates or mints an NFT, they execute code stored in smart contracts that conform to different standards, such as ERC-721. This information is added to the blockchain where the NFT is being managed. The minting process, from a high level, has the following steps that it goes through: