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Publisher
NFT
@NFT
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What is an NFT? A dummies guide to the future
Genre
Published
Nov 23, 2021
12:38 AM
Photo: Rachel McIntosh via Finance Magnates
Photo: Rachel McIntosh via Finance Magnates

What is an NFT?

An NFT is a one-of-a-kind verifiable digital asset. The current craze surrounds digital art but in theory an NFT could be a song, a drawing, a virtual blunt… anything turned digital.

Photo: Bored Ape Yacht Club #8817 by Yuga Labs via Forbes.com
Photo: Bored Ape Yacht Club #8817 by Yuga Labs via Forbes.com

What does NFT stand for?

Non-fungible token.

Although let’s be honest, does anyone outside of this space truly grasp wtf a non-fungible token even is? Allow me to elaborate.

“Non-fungible”

In basic English, non-fungible simply means that it’s unique and one of a kind. You can not replace one NFT for another unlike crypto coins. For example, you could trade one Bitcoin for another and it would still be the exact same value. You can not trade a one-of-a-kind Bored Ape NFT for another. While some may have similar monetary values, they will never be identical assets.

Photo: Dragon #896775 by CryptoKitties
Photo: Dragon #896775 by CryptoKitties

‘Bitcoin and other crypto coins are fungible af. NFTs are not.’ - Shanni Suissa

How do NFTs work?

NFTs exist on a blockchain. Most of the current NFTs exist on the Ethereum blockchain although other blockchains support them as well.

Photo: Ethereum.org
Photo: Ethereum.org

Don’t know what a blockchain is? Let me elaborate.

A blockchain is essentially a digital ledger of transactions that is distributed across the entire network of computer systems on that blockchain. So basically a record of every single transaction is added to every participant’s ledgers.

In other words, everyone and their mothers can see where and when I was scammed for 500 USD worth of Bitcoin. But let’s not revisit traumas. After all this is not an ayahuasca retreat.

Photo: Cool Cat #275 by Cool Cats NFT
Photo: Cool Cat #275 by Cool Cats NFT
Photo: Party Degenerates #4246 by Party Degenerates
Photo: Party Degenerates #4246 by Party Degenerates
Photo: Moving On by Fewocious
Photo: Moving On by Fewocious
Photo: Beeple in front of a background of his NFT artwork via GQ Magazine
Photo: Beeple in front of a background of his NFT artwork via GQ Magazine

How do NFTs benefit the creators?

One of the coolest facets of NFTs is that the artist or creator always receives a commission when an NFT is sold. Often times in traditional art, a piece will only gain value later in it’s lifespan. With NFTs the creators will always benefit as their work increases in value over time.

NFTs not only benefit the creators, they also benefit the consumers.

As an owner of an NFT, you can increase both your net worth and network significantly. Many NFT projects increase in value over time allowing the original owners to sell at a profit. And while making money is delectable, one of the biggest benefits of owning an NFT is the community it comes with.

Owning NFTs can grant you entry into exclusive parties, conventions, meetups, talks, discords (online platform for group chats) and so much more. There is no shortage of friends and family within the NFT community. I have been fortunate to experience the community first hand and it is beautiful.

How to buy NFTs?

Full guide below.

Photo: Screenshot of OpenSea when searching for popular NFT collection CryptoPunks
Photo: Screenshot of OpenSea when searching for popular NFT collection CryptoPunks

A step-by-step guide to buying NFTs

**All of the exchanges, wallets and marketplaces mentioned below are available as phone apps as well for easy use.

1. Purchase Ethereum (or whatever currency your marketplace accepts) on any crypto exchange like Coinbase, Kraken, eToro, etc…

2. Open a cryptocurrency wallet to transfer your coins to like MetaMask (the most popular wallet in the NFT community), Coinbase wallet, etc…

3. Connect your wallet to an NFT marketplace like OpenSea (the most popular marketplace currently available), Rarible, Nifty Gateway, Mintable, etc… There are also some niche marketplaces specializing in specific types of NFTs like NBA Top Shot - where you can purchase NBA highlights as NFTs.

4. Once you’ve purchased an NFT, it will be stored in your connected wallet. If you would like to store your digital assets offline, companies such as Trezor and Ledger offer cold storage options or essentially just hardware wallets that are not accessible via the Internet. This does add a layer of protection and security however it can be cumbersome to access your assets.

5. Enjoy your new digital assets. You can now use them as your Twitter profile pictures which is rumored to be the reason any influencers have purchased NFTs.

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