NFTs, explained in the simplest ways possible, by VICTOR ABIOLA.

The Buzz about NFTs has become really disturbing. My friends have had to ask me, what is this NFT thing, people have been saying all around.

Is there a way to explain without mentioning Terms like Metaverse, Web3, and the rest of these Jargon? Well let’s see, however, Victor Abiola did a wonderful job in this post.

In this article, Victor Abiola Explains NFTs in the simplest way that even a 4-year-old will understand or at least, will try to get a grasp.

Everyone has been talking about NFTs lately and it seems we all know what it is – except you, but what exactly is an NFT?

Thread carefully

NFT stands for Non-Fungible Token.

However, when you cannot interchange something for another thing of the same type, then that thing becomes non-fungible. For example, your identity card cannot be interchanged with another identity card of another person because both cards are unique. No two identities are the same.

Now that we have understood what fungibility means, we can move on to understand what an NFT really is and how they work.

What is NFT?

Okay, let us start with the name. NFT is an abbreviation for NON-FUNGIBLE TOKENS. Now, before you get bored with my article, I will explain what Fungible and Non-Fungible mean in a simple way.

“Fungible” simply means you can interchange this item for that item. For instance, you can give me a dollar bill or any other dollar bill; it doesn’t matter which one it is as long as it’s a dollar bill, we are good! Why? Simply because there are tons of 1$ notes printed and if I exchange a 1$ note with another 1$ note, I will still get the same thing and the same value.

“Non- Fungible” is simply an English word, a synonym for something Unique, and also means that there can only be one version of it. For instance, If I have the Mona Lisa Painting, that is Non-Fungible! There are only one of the Original Paintings. If I decide to exchange it, I cannot get the same Original Mona Lisa Painting again. Any other version will be fake or a duplicate.

“Token” on the other hand, can be referred to as a thing, serving as a tangible representation or a voucher or a ticket for something.

Thus, if you put the two together, it can simply mean a unique tangible representation or a ticket to a particular digital piece of art.

“NFTs can be in form of an ART, MUSIC, VIDEO, or any form of art or piece created.”

“NFTs are non-fungible tokens. They are one-of-a-kind, digital collectibles. You can use them to represent ownership of virtual items in the digital world.”

The Pedagogy of NFTs as Digital Art Gallery

One easy way to understand NFTs is through a real-world analogy. For example, you can think of NFTs as a trading card collection. However, we will liken NFTs to A physical Art Gallery.

For easy understanding, when you think of NFTs, I want you to think of Artwork Collections in a Physical Art Gallery. Examples, Nike Art Gallery in Nigeria and Louvre Museum in France.

To sum it up, I should say NFTs are basically the Digital representation of what we do in Art Galleries, well, just with a little bit more frenzy and advantages.

Therefore, when you understand what they do in Art Gallery, it becomes easier- Creating Arts, Holding Exhibitions. Bidding, sale, and collections of these Arts and everything else they do in a physical Art Gallery.

NFTs Players

There are different players when it comes to the NFT space. You can either be a “Creator” or a “Collector”.

Creators, as the name implies are those that create the Arts (The NFTs) while

Buyers or Collectors are those that buy a digital piece of art from the creators.

Ps: Some have argued that there is a difference between a Buyer and a Collector. They say Buyers are those that just buy and resell almost immediately after the price or the value of the NFT increase to recoup their investment and make their Profits, while Collectors are those that buy these digital arts and keep them for the long term. (Maybe hoping to sell in the future or just having it in their possession).

Now that you understand that NFTs are basically what we do in the Art Galleries in the physical world, and replicated in the digital world. Now, I know you are eager to get started but not yet, why? You have a long way to go; there are things you’ve to know to be able to milk the opportunities in NFTs.

Let’s get to the next question.

How do you create NFTs?

Anyone can create NFTs. As a Creator, You can draw or take a picture of anything, human, nature, animal, object just anything and decide to list it on your Website and give WL to certain people to mint it or you can go on any of these Popular Marketplaces and list it there.

I will lay more emphasis on this in my next blog.

How do you buy and sell your NFTs?

First, the place where we buy and sell these Digital Arts is called MARKETPLACE. A Digital Market Place.

What Is A Marketplace?

“A MARKETPLACE is basically like the ‘Art Gallery’ where you go to exhibit, bid, and buy your NFTs.”

The most popular NFT MARKETPLACE at the point of this writing is called OPENSEA. The website is http://opensea.io

However, there are several Marketplaces on the Internet; there is RARIBLE, SOLANART, BINANCE NFT MARKETPLACE, and others. On these Marketplaces, as a Creator, you can go and exhibit or sell your NFT and as a buyer or collector, buy an NFT.

Ps: As a buyer or Collector, It is always advisable to know the particular NFT you want to buy already before entering the Marketplace so that you do not get confused by the myriads of NFTs you see on these Marketplaces.

Currency of Exchange in the marketplace

Of course, when you go to a physical Art Gallery to purchase Artwork, you hold your money. Now, in the digital Art Gallery of NFTs which is The Marketplace, you hold your digital money too which is Cryptocurrencies. Different Marketplaces accept different Digital Money.

Each Marketplace stipulates the exact digital money or Cryptocurrency they will accept for you to exhibit or purchase an Art from them. For Example, OPENSEA collects strictly ETHEREUM, while SOLANART collects Solana and BINANCE NFT MARKETPLACE collects Bnb, Busd, and Usdt.

As such, you need to know the type of money the Marketplace you are going to use collects to be able to exhibit or buy your NFT.

NFTs Uniqueness – why you can’t download or take a screenshot of NFTs to resell

What makes an NFT valuable?

I get many questions like since all these Arts Are Digital, can’t someone easily just download them or even take a screenshot or a screen record of them and You might also be wondering how these digital objects can have any value at all. After all, anyone can copy and paste an image of an NFT online, right?

This is where cryptography comes in; it’s a type of computer science that creates complex math problems to encode information so it cannot be copied easily (or sometimes at all).

“You shouldn’t download or take a screenshot of exhibited NFTs that aren’t yours– you should only do that for fun because they will be valueless.”

Why? Blockchain technology.

What does cryptography do to NFTs?

Blockchain Tech. is one of the best things to happen in the digital space at large.

4. When an NFT or a digital Art is created, it is stored on the Blockchain Technology Network, which will serve as a ledger or a record-keeping book to show the originality and the authenticity of the NFT.
5. Whenever someone makes an NFT, they use their wallet’s private key (a long string of numbers and letters) to sign it, similar to how your signature identifies you as the owner of a check.
6. The Blockchain will show all the information concerning the NFT which will include the Creator, the current owner, the history of how the NFT came to existence, and the different prices it has been sold for.
7. Another good thing is they practice open data, that is, the data is available for everyone to see. Thus, when someone claims to own an NFT, you can easily check on the Blockchain Technology Network to confirm the authenticity.

How do you make money via NFTs? 

I know this is the part you are waiting for. See you, you like money too much. Well, who doesn’t? As earlier stated, there are different players in the NFT space. You can either be a Creator or Collector/Buyer.

As a Creator: you can create a Collection of different NFTs. Each of these NFTs in this collection will be going for a price you set it at and when a buyer sees and buys it, you make your money.

As a Collector or a buyer: when you purchase an NFT, you become the owner and you also decide the price you want to resell it another juicy part is that, there is a feature that comes in selling NFT, that even when it gets resold from another person to the next, you will still get a particular amount of money, like a royalty. Yes, it is that nice.

It should be noted, however, that NFTs are not only for you to make money and buy and sell. It also has great benefits, subject to different NFTs and what they offer.

1. Another benefit of buying art is it lets you financially support artists you like, Some Creators who are Musicians or artists give the collectors of their NFTs free access to their live physical events and shows.
2. Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture – you can definitely see people use their NFTs as their profile pictures. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.
3. I even heard an Airline is also offering extra meals and other services to holders of their NFTs. The list is numerous.

Some Popular Terms Used In NFTs Transactions. 

1. FLOOR PRICE: simply means the lowest amount you can purchase an NFT in a particular Collection of NFTs.
2. MINT: Most of the time, Creators love to launch their NFTs on their website before launching them on these popular Marketplaces.
   So after it is launched on their website, some of the people who are privy to that website can buy it there and that is called “minting”- basically buying it before becomes very public.
3. WL {White List}: This is more like a ticket or access that Creators give buyers to go mint on their website before it becomes public on Marketplaces. They get more advantage because the price will most likely be cheaper on their website before it goes on public on the Marketplace.
4. RUG PULL: This is basically when someone creates a fake or duplicate of a real NFT, claims to be the owner, and decides to sell it. The buyer that buys it is said to have been rug-pulled. He has been scammed and bought a Fake NFT.

There are other terms, but I will stop here. I will lay more emphasis on it in my next blog post.

Note: whether we like it or not, NFTs are here to stay. However, not all NFTs will do well, as a matter of fact, many will not last. Having the right amount of knowledge on how to operate in the space will help you go a long way.

Takeaways

1. NFTs are non-fungible tokens that are digital collectibles on the blockchain.
2. NFTs are not just images, but they are actually the rights to an image, a song, or a video file.
3. The most popular use of NFTs is in the art world, where artists can sell their works as collectibles and trade them for money.
4. They are rare, unique, and limited edition artworks that are sold from one collector to another, like a painting or a sculpture.
5. NFTs can be owned by anyone who purchases them and can be resold over and over again for a profit if their value increases.

6. A MARKETPLACE is basically like the “Art Gallery” where you go to exhibit, bid, and buy your NFTs.
7. Each NFT is unique because it’s linked to a specific piece of art or media file which makes it more valuable than other types of digital assets such as cryptocurrencies or even traditional commodities like gold or silver coins which only exist in large quantities (which means they aren’t scarce).
8. An artist can create original work with his/her own style using different mediums (painting, photography). Then they upload this artwork onto a marketplace where buyers purchase it using Ethereum (ETH) cryptocurrency or other accepted cryptocurrencies through smart contracts so that ownership rights will be given to them.
9. There is a feature that comes with selling NFT, that even when it gets resold from another person to the next, you will still get a particular amount of money, like a royalty.
10. You shouldn’t download or take a screenshot of exhibited NFTs that aren’t yours – you should only do that for fun because they will be valueless. you’re free to admire.

Read also: What To Expect In Web3

The Universe Or The Metaverse?

Notice: This piece was pulled out from victor Abiola’s Twitter handle and modified for techpadi’s readers.