The buzz surrounding NFTs has grown quite alarming. My pals had to ask me what this NFT thing was that everyone was talking about.
How can I describe this without using terms like Metaverse, Web3, and the rest of these jargons? In this essay, I will explain NFTs in such a way that even a 4-year-old will comprehend them, or at least try.
Here are ten things you need to know about NFTs to grasp them like a four-year-old.
1. NFT is an abbreviation for NON-FUNGIBLE TOKENS. “Non- Fungible” is simply an English word, a synonym for something that is Unique and also means that there can only be one version of it. 1$ Note is Fungible, meaning 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. However, 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 will never be able to have the same original Mona Lisa painting again. Any other version is a forgery or a replica. A "token," on the other hand, is an object that serves as a concrete representation, a voucher, or a ticket for anything. As a result, when the two are combined, it might simply refer to a one-of-a-kind tangible depiction or a ticket for a certain digital piece of art. NFTs can now take the shape of ART, MUSIC, VIDEO, or any other type of art or item made.
2. To help you comprehend, when you think about NFTs, think of Artwork Collections at a Physical Art Gallery. Nike Art Gallery in Nigeria, for example, or the Louvre Museum in France. It becomes simpler to grasp what they do in an Art Gallery if you understand what they do—creating arts and holding exhibitions. Bidding, sales, and collections of these arts, as well as everything else that happens at a real Art Gallery. NFTs are essentially the digital equivalent of what we do at Art Galleries-, but with a little more excitement and benefits.
3. When it comes to the NFT space, there are several players. You can choose between becoming a "Creator" or a "Collector." Creators, as the name suggests, are people who make the arts (The NFTs), whilst "Buyers" or "Collectors" are those who purchase from them. Some claim that there is a distinction to be made between a Buyer and a Collector. Buyers, they claim, are those who buy and resell relatively soon after the price or worth of the NFT has climbed and they earn their profits, whereas Collectors are those who buy these items and keep them for the long term. (Perhaps they are intending to sell it in the future, or they simply want to have it in their hands.)
4. Now that you realise that NFTs are similar to what we do in Art Galleries in the physical world, let's look at how we do it in the digital world. Now, where do we go to buy and sell these digital arts? MARKETPLACE is the name of such a location. A MARKETPLACE is similar to a "Art Gallery," where you may show, bid on, and purchase NFTs. At the time of writing, the most popular NFT MARKETPLACE is known as OPENSEA. The URL is http://opensea.io.
However, there are other Internet Marketplaces, like RARIBLE, SOLANART, BINANCE NFT MARKETPLACE, and others. As a Creator, you may show or sell your NFT on various Marketplaces, and as a buyer or collector, you can purchase an NFT. As a buyer or collector, it is usually recommended to know the specific NFT you wish to purchase before entering the Marketplace, so that you are not confused by the plethora of NFTs available on these Marketplaces.
5. Of course, when you go to a physical Art Gallery to buy artwork, you have your money in your hand. You may now hold your digital money, which is Cryptocurrencies, in the digital Art Gallery of NFTs, The Marketplace. Different digital currencies are accepted by various marketplaces. Each Marketplace specifies the specific digital currency or cryptocurrency that they will take in order for you to show or acquire artwork from them. OPENSEA, for example, gathers just ETHEREUM, whereas SOLANART collects Solana and BINANCE NFTMARKETPLACE collects Bnb, Busd, and Usdt. As a result, you must understand the sort of money that the Marketplace you intend to utilise gathers in order to show or purchase your NFT.
6. I get a lot of questions about how, because all of these arts are digital, can't someone just download them or even take a snapshot or a screen record of them? This is where Blockchain technology comes into play. Blockchain technology is one of the most exciting developments in the digital environment at large. When an NFT or digital Art is made, it is kept on the Blockchain Technology Network, which acts as a ledger or record-keeping book to demonstrate the NFT's uniqueness and authenticity. The Blockchain will display all information about the NFT, including the Creator, the current owner, the history of how the NFT came to be, and the many prices it has been traded for. What about another plus? It is visible to everyone. As a result, if someone claims to hold an NFT, you can simply verify its legitimacy using the Blockchain Technology Network.
7. How do you earn money with NFTS? I know this is the bit that has piqued your attention. See you, you have an unhealthy obsession with money. Who doesn't, after all? As previously noted, there are several participants in the NFT space. You have the option of being a Creator or a Collector/Buyer. You may construct a Collection of different NFTs if you are a Creator. Each of these NFTs in this collection will be sold at a price you choose, and you will profit when a buyer sees and purchases it. When you acquire an NFT as a collector or buyer, you become the owner and determine how much you want to resell it for. Another interesting aspect is that even if it is passed from one person to the next, you will still earn a certain amount of money, similar to royalty. Yes, it is that nice.
8. It should be mentioned, however, that NFTs are not just for making money and buying and selling. It also offers a lot of advantages, depending on the NFT and what they provide. Some Creators, like musicians or artists, provide free entry to their live physical events and exhibitions to collectors of their NFTs. Folarin Falana(Falzthebahdguy) & BNXN are involved in some way with their NFTs.
I've even heard that certain airline is providing extra meals and other amenities to NFT holders. The list is extensive.
9. I will discuss and clarify some often used words in NFT transactions.
PRICES ON THE FLOOR. This simply implies the smallest sum for which an NFT in a specific Collection of NFTs can be purchased. MINT. Typically, Creators choose to debut their NFTs on their personal websites before launching them on these major Marketplaces. So, once it is published on their website, some of the individuals who have access to that website may buy it there, which is known as "minting"—basically, buying it before it becomes widely available. WL stands for Whitelist. This is more akin to a ticket or access that Creators provide purchasers to go mint on their website before it goes public on Market Places. They get an edge since the price will almost certainly be lower on their website before it is made public on the Marketplace. PULL THE RUGS. This is when someone builds a fake or copy of a genuine NFT, pretends to be the owner, and decides to sell it. The purchaser is claimed to have been rug-pulled. He was duped and purchased a bogus NFT. There are further words, but I'll stop here. You may simply conduct more research on these terms.
10. Whether we like it or not, NFTs are here to stay. However, not all NFTs will do well; in fact, many will fail. Having a good understanding of how to work in the space can help you get a long way.
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