top of page

NFTs FOR STARTERS

A non-fungible token (NFT) is a unique, unrepeatable and indivisible digital asset that, linked to the development of blockchain technology and can't be regular cryptocurrencies, as each NFT has a distinct value, hence non-fungible.


NFTs, which are unique digital assets that live on the blockchain, started to gain steam in the digital art world, but quickly expanded into luxury fashion, music, video games, social media and sports. Pop culture became saturated with NFTs throughout 2021, from X-ray images of William Shatner’s tooth, to a digital replica of Twitter founder Jack Dorsey’s first tweet and numerous memes preserved as NFTs.


Enter 2022, and NFTs are becoming even more mainstream. Samsung, for instance, unveiled plans to bring NFT marketplaces to its smart TVs ahead of the 2022 Consumer Electronics Show.



What’s the definition of an NFT?


NFT stands for a “non-fungible token,” which is guaranteed to be a one-of-a-kind digital asset that lives on the blockchain. The first NFTs were created in 2017 before the term even existed. Shortly after, crypto-kitties and crypto-sharks coined the term on the market and standardized Smart Contracts, a program that runs on the Ethereum blockchain which is like a “paper contract operated by a computer,” said Calderon.


“I think if there's a single takeaway, for the first time in history, we're able to prove that we own a digital asset,” he added.


How is an NFT different from Cryptocurrency?


NFT stands for non-fungible token. It’s built using the same kind of programming as cryptocurrency, like Bitcoin or Ethereum, but that’s where the similarity ends.

Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. They’re also equal in value—one pound is always worth another pound; one Bitcoin is always equal to another Bitcoin. Crypto’s fungibility makes it a trusted means of conducting transactions on the blockchain.

Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible).



How do NFTs work?


At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like Bitcoin or Dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from an ETH coin.




What’s the point of NFTs?


That really depends on whether you’re an artist or a buyer.


I’m an artist.

You might be interested in NFTs because it gives you a way to sell work that otherwise might not be much of a market for.


Also, NFTs have a feature that you can enable that will pay you a percentage every time the NFT is sold or changes hands, making sure that if your work gets popular and appreciates in value.


I’m a buyer.

One of the obvious benefits of buying art is it lets you financially support artists you like, and that’s true with NFTs (which are way trendier than, like, Telegram stickers). 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. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.


I’m a collector.

NFTs can work like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit.



Is every NFT is unique?


In the boring, technical sense that every NFT is a unique token on the blockchain. But while it could be like a Picasso where there’s only one definitive actual version, it could also be like a trading card, where there’s 50 or hundreds of numbered copies of the same artwork.



Who would pay hundreds of thousands of pounds for what basically amounts to a trading card?


Some people treat them like they’re the future of fine art collecting


(read: as a playground for the mega-rich), and some people treat them like Pokémon cards (where they’re accessible to normal people but also a playground for the mega-rich).




What are the most popular NFT marketplaces?

Once you’ve got your wallet set up and funded, there’s no shortage of NFT sites to shop. Currently, the largest NFT marketplaces are:

OpenSea.io: This peer-to-peer platform bills itself a purveyor of “rare digital items and collectibles.” To get started, all you need to do is create an account to browse NFT collections. You can also sort pieces by sales volume to discover new artists.

Rarible: Similar to OpenSea, Rarible is a open marketplace that allows artists and creators to issue and sell NFTs. RARI tokens issued on the platform enable holders to weigh in on features like fees and community rules.

Foundation: Artists must receive “upvotes” or an invitation from fellow creators to post their art. The community’s exclusivity and cost of entry—artists must also purchase “gas” to mint NFTs—means it may boast higher-calibre artwork. For instance, Nyan Cat creator Chris Torres sold the NFT on the Foundation platform.

It may also mean higher prices — not necessarily a bad thing for artists and collectors seeking to capitalise, assuming the demand for NFTs remains at current levels, or even increases over time.







bottom of page