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Studio Home Events Studio Home Events Subscribe NFTs Daily Inspiration Explore our daily picks of NFTs: crypto Inspiration by different…
NFTs Explained : What Are They and How Do They
Work ?
This is a quick introduction for the urbanites on the run! Find out what are NFTs, What makes them unique, what’s the hype about and why would anyone invest and pay millions for these digital non-fungible tokens.
Published on March 15, 2021
NFTs Explained : What Are They and How Do They Work ?
A quick introduction to NFTs for urbanites always on the run!
You’re probably here due to the buzz around this alien term “NFT” is everywhere. I understand, I was in your shoes a few days ago and after days and hours of surfing the web, multiple YouTube videos, and endless scrolling through NFT marketplaces trying to understand what is selling high, what people are creating, I think I can explain what essentially is NFT.
So let’s break it down into steps…
What is an NFT ?
NFT stands for non-fungible tokens. NFTs are digital assets with a unique identity on the blockchain. However, unlike cryptocurrencies (which are fungible), NFTs cannot be traded or exchanged at equivalency like bitcoins and other cryptocurrencies… Let’s simplify this one step further!
Fungible tokens like bitcoin mean that 1 bitcoin is equal to 1 bitcoin while 1 NFT is not equal to another NFT. Thanks to this property, NFTs are authentic as the NFT’s token proves that this is the original asset.
Now you may be wondering but what is really an NFT, how does it look like…
What are the possible formats of an NFT ?
NFTs can be in the form of jpegs, gifs, mp4, and pretty much anything that the creator wants to sell as an NFT… even a tweet as recently seen in the news!
How do you define the value of an NFT ?
The value of an NFT is based on factors such as how desirable it is, its rarity, how exclusive, etc. pretty much like physical art. This value, however, is determined using a cryptocurrency like ETH (Ethereum).
Fungible tokens like bitcoin mean that 1 bitcoin is equal to 1 bitcoin while 1 NFT is not equal to another NFT. Thanks to this property, NFTs are authentic as the NFT’s token proves that this is the original asset.
Where can I buy NFTs ?
There are several marketplaces (which resembles etsy or eBay) to buy NFTs such as Opeansea (currently the largest NFTs marketplace, mintable, Foundation.app, Superrare, Rarible, Makersplace, NBA Top Shots, Nifty Gateway are some of the prominent marketplaces.
But why would anyone buy NFTs!
I understand it may seem confusing or even startling that anyone would invest in a digital artwork or jpeg or gif that everyone can see, save, and download on the internet for free. However, I may argue that this could be a financial investment much like investing in a real physical artwork that everyone can have a non-original copy of.
These NFTs could also hold a sentimental value. Others opt to purchase NFTs that are associated with their favorite artists or brands!
Are NFTs here to stay ? Well, I think the short answer is yes! And we are already starting to witness revolutionary concepts emerging from NFTs such as Decentraland which is a virtual reality that is an Ethereum-based blockchain where users are the owners and they can purchase, build, and monetize assets.
What's the point ?
Well, if you’re an artist or a designer and thinking of selling your digital art, this is a great outlet to sell your art on these marketplaces and grow your audience base. NFTs also offer a “royalty” or a percentage that the creator will always gain from the reselling of his/her own NFTs
If you’re a collector, then you could invest in NFTs that you speculate can grow in value in the future and gain profit from that. It is also a way to support your favorite artist and own some of their creation!
Now this is a brief introduction into the world of crypto art and NFTs, there is also another side that we cannot ignore which is the environmental impact of minting these NFTs… but that’s for another time!
Until then, Stay healthy, stay strong!
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