Before I start explaining what is nft and how does it work Let me try and help you wrap your head around the idea behind NFTs
If you have been around for a while you probably noticed that collecting precious and one-of-a-kind rare items have a certain appeal to it.
I know I would love to find some long-lost artwork that will make me richer overnight like the story about the Chinese bowl that was bought for $35 at a yard sale and netted at an auction around $721,000 because it was a lost one-of-a-kind piece of art.
Even Pokemon cards are becoming highly collectible items as a mint condition Topsun Charizard Blue Back can sell for around half a Million Dollars
Say What??
Yea crazy money for a piece of paper I know.. (wish I had one to sell)
What does this have to do with NFTs?
Don’t Rush it I’m getting there
Then technology came along and changed the whole picture,
What would you say if I told you there are digital, (Yes Digital) pictures of monkeys (Yes Monkeys) that can put the numbers above to shame?
Like the Bored Ape #8585 which was sold for 2.7 million (yes 2.7 million USD) Just last October.
And this is just the tip of the iceberg.
Nah I don’t believe you, No way.
That’s some serious money for a picture you can just screenshot, isn’t it?
Yes, Yes it is.
Blockchain Technology made this possible (this is the technology behind Cryptocurrency)
By simply attaching a file folder to a transaction on the Ethereum blockchain, Since this Transaction is one of a kind and unique this specific file folder will forever hold the data on it.
Since the blockchain is public and anyone can view it, it becomes known to anyone that checks that this specific NFT is owned by the guy that paid an eye-watering 2.7Million for it and no one else.
If he chooses to sell it, it will be documented on the blockchain for everyone to see and the ownership of the monkey will be moved to someone else.
Yea Yea digital Monkeys, I still don’t get what is an NFT
Non-fungible tokens (NFTs, or “niftys”) are digital media with a permanent attachment attached by whoever creates it, this digital media can hold many types of flies in it, but for the moment what dominates the NFT market is Digital Artwork.
Anyone with access to a digital platform — which is practically everyone these days — can create one, authenticate it, and sell it.
What makes them special is the fact each NFT is a unique asset that can’t be replaced with something else, unlike a $10 bill, if you exchange it for 2 $5 bills you will essentially have the same amount of money which makes it a fungible asset, and that’s why NFT’s are Non-Fungible.
Okay, so how do people buy it/sell it, I mean there’s no NFT supermarket(right?)
Actually…
These NFT’s can be bought and sold on different online platforms like OpenSea and others and the currency used to pay for them is actually not a regular currency like dollars but cryptocurrency and since the majority of NFT’s are created on the Ethereum blockchain they are bought or sold using ETH.
Let me get this straight, These are online pictures that are sold for millions because the owner documented it on some blockchain?
Exactly, you can also buy Gifs and videos,
Oh and by the way, There’s a guy selling a house,
Yea a real-life house,
As an NFT and within the media file there’s some kind of proof of ownership of the house.
Umm… Okay, Anyways, how does the process work?
Well, Let’s say that I want to sell a picture of my backyard as an NFT, What I will do is I will “mint” this picture into the blockchain, in the process, I will be paying fees for the network, and then ill have this picture as an NFT forever on the blockchain.
Then if I want to sell it I simply post it in one of the markets, Like OpenSea or Niftygateway or any other platform that sells NFT’s, put a price tag on it, and wait to see if anyone bites.
How can you choose what to sell it for?
Just like any item, Especially one-of-a-kind items, Simply worth what another person is willing to pay for them.
So if I listed my backyard picture for 10ETH (Which is about $45,000 at the moment) I have a hard time imagining anyone would even consider buying it. But who knows.
Bottom Line
NFT’s are similar to other collector’s items, such as paintings, sculptures, and vintage baseball cards, however, instead of purchasing a physical thing, you pay for a file and documentation that you hold the original copy.
Soooo Should I buy any?
Some say that this is a temporary craze for something new that will die out eventually.
Some are saying it’s the future of artwork and the way it will be sold.
Some are saying that this is a much bigger thing than just a way to buy and sell artwork online since it can store other important files and proof of ownership that can’t be denied.
But who knows.
In the meanwhile, you can start Investing in regular Crypto if you haven’t started yet to get your feet wet and then see if the NFT market is the right place for you!
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