What does NFT stand for?
Non-fungible token.
What does fungible and non-fungible mean?
Fungible — All units are the same, equal in value and easily exchangeable. Example: Dollar bills, grains of rice, tennis balls.
Non-fungible — Each unit is unique, different in value and not easily exchangeable. Example: The original Mona Lisa is not the same as a poster from the gift shop.
What are NFTs?
A digital certificate that verifies ownership over a digital asset. It is similar to an artist’s signature that proves a painting is original, but NFTs cannot be forged.
Where are NFTs created, stored and used?
On a blockchain, most likely Ethereum.
What is a blockchain?
A digital record of money changing hands (think of the Venmo Transactions tab). Records are called blocks and they are linked together to make a chain, hence — the blockchain.
Why is it important that NFTs live on a blockchain?
Blockchain technology is secure and ledger entries cannot be modified.
The blockchain records who owns the digital asset, who sold it and when — this ensures that there is only one owner at a given time.
The blockchain ensures the NFT’s authenticity and scarcity — which makes the asset valuable.
What can you buy and sell as an NFT?
Almost anything: art, music, tweets, trading cards, video game elements, etc.
Why are NFTs important?
It can change the way we authenticate ownership of art, deeds, leases, etc.
NFTs can be resold and the creator gets perpetual royalties.
How do I get started with NFTs?
Choose a marketplace (Rarible, OpenSea, SuperRare, NiftyGateway).
Create an account and link it to your crypto wallet.
Create art, upload it and auction it off.
Who can profit from NFTs?
Creators who sell their work to fans.
Investors who think someone will buy their asset for more than what they paid.
Why are NFTs helpful for artists?
Artists get a commission every time their work sells. This commission can increase over time if an artist gains popularity and their work sells for more money. In contrast, if a Picasso is resold, the artist/estate gets zero.
Previously, artists relied on client work to earn a living; now they can sell directly to collectors and spend more time in the studio.
What’s the cost?
There are “miner fees,” AKA service fees for trading on Ethereum. Artists have to pay for tokens and buyers are charged a processing fee.
There’s an environmental impact — mining cryptocurrency takes powerful computers that consume a lot of energy and add to the carbon footprint.
Should I make an NFT?
Are there people who would want to buy your stuff?
Does your audience know what crypto art is?
Can you promote your work?
What is NBA Top Shot?
Created by Dapper Labs (FKA Axiom Zen), NBA Top Shot is a website that allows folks to collect notable basketball moments. Think basketball cards, but instead of owning a card of Shaq, you own a video of him scoring in a game. The footage can be seen by others, but ownership is solely yours. In < 1 year, the beta version of the site processed $200m in sales. A clip of Lebron James dunking sold for $200k+.
What are some notable NFTs?
CryptoKitties — Launched in 2017 by Dapper Labs, CryptoKitties is an online game where users can breed and trade digital cats. Each cat is an NFT which certifies its originality and ownership. CryptoCats are cool, because genes in their code define the 12 features (cattributes) of their physical appearance, and these traits carried in their code show up in their litter.
Nyan Cat —A 2011 viral meme of a cat with a cookie body that spews a rainbow behind it as it hops forward. In February 2021, the original GIF was sold at an online auction for 300 Ether or $600k USD.
CryptoPunks — created by Matt Hall and John Watkinson, a collection of 10k unique characters that were given to Ethereum users for free. Some Punks have since been sold for millions of dollars.
Taco Bell sold a GIF for $20k, proceeds going to the Taco Bell Foundation.
Jack Dorsey, Twitter CEO, put his first tweet on auction, the current highest bid is $2.5m.
If anyone with WiFi can view a digital asset, why/how does it have value?
The same reason anyone can view a Monet, but only one person owns the original — it is rare. The asset can be copied, but the token of ownership cannot.
Million dollar question:
Does ownership alone make digital assets valuable?