Except you live on a dry tree branch in the heart of the Sahara or you seriously don’t care about the digital world of the internet you must be asking yourself this question “What’s all the rave about NFTs?” There are equally too many articles, videos, audios etc. that seek to explain the concept of NFTs, some good, some bad and some are even NFTs themselves—This is good and I hope to sell it as an NFT someday!
WHAT ARE NFTs?
NFTs is an acronym for NON FUNGIBLE TOKENS. To easily understand this, understanding the word FUNGIBLE is highly important. Fungible is a word used to explain a situation where something is able to be duplicated, exchanged, replicated, substituted, I could go on and on with many other synonyms but I see you get the point already.
Oh, you don’t? Okay. Let’s say you lend me a fifty dollar note, It doesn’t matter if I repay you with two twenty dollar notes and a ten dollar note because it still amounts to fifty dollars. But say you lend me your house in the Bahamas for a short vacation, it would be strange and unacceptable to return a different house to you even if it is in the same area as your original house. Yeah, you got it, dollar bills are fungible, houses are non-fungible.
So, NFTs are digital assets that can’t be substituted, (inserts other numerous synonyms). I can always repay you with smaller units of Bitcoin to get you the 1 Bitcoin you lent me, you see the difference now? Great. Bitcoin is non-fungible and no, you didn’t succeed in duplicating that ugly—oops, bored apes NFT you just screenshotted from the website because just like the very famous Mona Lisa painting, there are many different copies but just one original— but don’t let me discourage you, screenshot away!
Now like the Mona Lisa painting and your house in the Bahamas what NFTs does is to give you the unique rights of ownership so that even if there are many other different copies, you remain the owner of the first and original NFT (at least till you sell it). This right of ownership is confirmed because NFTs uses Blockchain technology to keep records of transactions. So when you sell your NFT to me, anybody, anywhere can see the records of transaction on Blockchain to know that the NFT now belongs to me.
MINTING AND BUYING NFTs
NFTs can be made and sold out of virtually anything digital, from videos to songs to articles like this one but most of the rave is around using the technology to promote, buy and sell digital arts like pixelated stickers, paintings and someone’s teeth! No seriously, William Shatner sold his ‘Shatner-themed’ trading cards (one of which was an X-ray of his tooth from 1953) to SOMEONE! I don’t know what kind of person would want to buy the x-ray of someone else’s teeth!
There are also many Blockchain networks which are compatible with NFTs, and any of them can decide to make their own versions of NFTs, from Binance, to Tron and Solana but the most popular of all is the Ethereum Blockchain. Now depending on the Blockchain which the NFT you want to buy is on, there are equally digital marketplaces made for them so you can easily purchase them. Like Nifty gateway, Opensea and Rarible supports the Ethereum Blockchain, Magic Eden is the leading NFT marketplace on Solana etc.
It is also important to note that the owner of an NFT can request to be paid in any currency of his or her choice but the most common way of paying for an NFT is through the use of cryptocurrencies especially those compatible with the Blockchain network which the NFT is on. So you see where this is going? No? Okay..
Say you want to buy one of the Heroes on OpenSea, (but seriously, these NFTs are ridiculous as…) first you need ether (which is the native token of the Ethereum Blockchain since the Heroes NFTs are hosted on the Ethereum Blockchain) and this simply means you need a crypto wallet which is also compatible with the Blockchain and the best for this purpose is the Ethereum wallet on the Metamask exchange.
For the fastest and easiest route, after creating your wallet, head over to the DApps browser on metamask, it automatically connects your wallet to the market place.
Type in "OpenSea" (the marketplace for buying Heroes) on the search bar and click on the first pop-up suggestion. Click on the hamburger menu at the top right of the opensea homepage, type in "Heroes NFT collection" on the search bar
select the Hero you’d like to buy, you have the option to either buy it at its listed price or make an offer to buy it for lower or higher. click on ‘buy now’ (if you’re like me, you’d get the 'Add funds' pop-up message if you don’t have enough ETH in your Metamask wallet but if not, then simply…) click on ‘confirm checkout’ and voila! You’re a hero owner.
After a while, the NFT would be sitting pretty in your wallet while your ether may be buying other pretty things for the seller. (This process is almost the same for other NFTs. Find an NFT you like, check which Blockchain it is compatible with, create the subsequent crypto wallet, fund the wallet with the crypto in the same blockchain, go to a marketplace that supports the NFT’s Blockchain, buy the NFT).
…BUT BUT, I WANT TO CREATE AND SELL MY OWN NFTs
Oh, okay, that’s cool. I’d like to assume that even if you wanted, you lack the necessary technology, energy and coding skill required to create an NFT from scratch, even if you do, I don’t. What I do know however is that there’s an easier way for creating and putting up your NFT for sale and it usually takes almost the same process as buying an NFT which I explained earlier.
Create a cryptocurrencies wallet (so you can receive your payment when someone buys your NFT) fund it with some cryptocurrency (for gas fee, because blockchain uses enormous amounts of energy), connect the wallet to an NFT marketplace, check for and click on ‘Create NFT’ in the marketplace, upload the file which you want to make as an NFT (Opensea accepts JPG, PNG, GIF, SVG, MP4, WEBM, MP3, WAV, OGG, GLB, GLTF. Of not more than 100mb in size), set your price and royalty fee and then click on ‘Create NFT’. You would be asked to pay a listing fee (which is basically commission paid to the marketplace).
OKAY, WHY ON EARTH ARE NFTs SO EXPENSIVE?!
Awww, c'mon! I'm sure with a bit of snooping, you could get some real cheap NFTs on some marketplaces. If you're lucky enough, you could even pick up new NFT projects before they're minted and released for sale, they usually trade for little to nothing then and you can decide to resell for any price you like. The value of NFTs come largely from the law of demand and supply. When someone decides to buy your NFT for just about any price you sell it for, they've created demand for that NFT and would in turn sell it for higher than they bought it from you to someone willing to buy it from them.
Just like physical pieces of art, some other factors that gives NFTs its value are; the popularity/credibility of the artist in the physical world, the nature of NFT, effort put in the creation of NFT, the story behind the NFT and the social currency of the artist.
WHY YOU SHOULD INVEST IN NFTs
First off, it’s not guaranteed that this boom would last and then the boom came with so many mediocre and bad NFT projects, now I’m not saying you don’t know what you’re doing when you decide to create and sell your own NFTs… I’m saying many other people with no significant knowledge about the ever growing world of Crypto just fall in love with the NFT idea and then decide to sell the shit out of it (pun not intended).
Coupled with the problem the environment faces because of the huge amount of energy the Blockchain technology uses to secure these transactions and the fact that the wallets which NFTs are stored in can be hacked and the NFT stolen into another untraceable wallet.
However, these problems can be mitigated. Even if NFTs would finally go out of vogue, we are still early on it. In fact, the Metaverse rave is proof of this. It is also very likely that you may buy some worthless NFTs but you can’t fully learn without both good and bad experiences, more research and experience will make you an NFT expert. You’d learn to be more careful and protective of your wallets and your decisions on the best NFTs and how to get them would be better informed. Also, having the environment at heart, most Blockchain have switched/are switching to another process of securing transactions called “proof of stake” which consumes lesser energy and most of them are now publicizing themselves as carbon neutral/negative.
Owning NFTs are beneficial in different ways; • Uhm, Money: I’d like to think that’s what majority of people want out of an NFT. You could buy NFTs with the hope that later on, there would be an increase in its price so you can sell it for a profit. NFTs also gives the original creator the luxury to be paid—perpetually— some percentage of 5-10% in royalties whenever their NFT is sold. Say you create an NFT and sell it to me, you receive some percentage of the payment when I sell the NFT to someone else and when that someone sells to another person and so on.
• Access to online (and sometimes offline) communities: There are communities in real life made up of people who own the same items with different prerequisites to join their community like a yacht club. This happens in the NFT space too with communities like the Pudgy Penguins and Bored Ape Yacht Club (BAYC) whose members are made up of celebrities, influential and elite people like Kanye West and Justin Bieber. Having a Bored Ape NFT for instance, automatically makes you a member of the BAYC. So say they’re having an offline meeting, you have access to attend, how cool is that?
• Serves as collectibles and utilities: If you’re an art lover, you can own and keep a collection of many different NFTs and even print them physically. As utilities, NFTs can serves as passes into online communities, to mint another NFT, receive airdrops etc. They can also serve as tools in an online game (like sandbox) and in the metaverse.
NFTs AND THE METAVERSE
OK, ready player one! (go see the movie if you haven’t, it’s a great and simple way to understand the metaverse) You know the saying “it’s a digital world”, yeah, the metaverse is a literal digital world (like the real world but online), it is where your digital self (known as your avatar) would reside—alongside other people’s avatars. It is also run on the Blockchain and technologies like Augmented reality (AR), Artificial intelligence (AI) and Virtual reality (VR) would be incorporated to enhance the way people would experience the metaverse.
I am saying people are bored of the real world (we spend most of our time online anyways) and soon we’ll all reside, do business and even get married online—who knows, maybe in sooner years we can also eat and have sex online! All this would take place in the metaverse, so no, even though Facebook is now ‘metaverse’, the metaverse is a whole lot different and bigger than it is because the goal of emerging technologies is decentralization whereas Facebook’s Metaverse is more like a centralized virtual world where Mark Zuckerberg holds the ultimate power to control and manage things within his Metaverse. (any rich and tech-savvy person can have their own little metaverse... Yes you can have your own metaverse, who can stop you?)
It is also likely that cryptocurrencies would be the universal currency of the metaverse with which you can buy and receive payment for properties, items, services etc. On the other hand, these houses, tools, arts, books, music and basically every other digital asset you can own in the metaverse are NFTs. The ownership of these NFTs can also give you access to digital communities in the metaverse plus other cool benefits of NFTs I’ve mentioned throughout this article.
I am trypophobic and I’ve been typing NFTs all night, it’s beginning to almost literally crawl up my skin!