For you to be reading this, it means you might have heard much about NFTs and you want to know more about it. For some it is majorly on how it can be of benefit to them financially. Let us delve into this short article that gives a simplified explanation of what NFTs are.
A digital asset is any content that can be stored digitally. This means virtually anything you can think of that you have ever stored on your phone or your computer. Examples are PDFs, Video and Audio files, Images and Graphics, Presentations etc. (Just remember, whatever you can download or “Ctrl + S”).
Even though whoever named this concept “Non-Fungible Tokens” should be punished because it sounds terrible and unattractive, it is what it is. 😂😂😂
Fungibility is the property of a good or a commodity with individual units that are identical and interchangeable. What this means simply is that a person can swap these goods for other goods of the same kind. For example, if Tolu borrowed you 45,000 naira to chill during the festive period last December and you want to pay because you just got your salary, you wouldn’t look for the same naira notes to pay him back. Instead, you would pay him with another set of naira notes.
What this means is that currencies like USD, AUD, CASD Sterling and even cryptocurrencies like Bitcoin, Solana and Ethereum are fungible and can be easily interchangeable. Indirectly, what this also entails is that you can’t use what is fungible to establish identity or verify the uniqueness of a digital content. “This is where Non-Fungible Tokens come in” (In Professor’s voice, Money Heist).
Non-Fungible tokens are unique tokens built on top of blockchains like Ethereum, Solana, Fantom and many more which are not identical and cannot be replicated.
So, what’s the point of an NFT basically?
Since an NFT is created on a blockchain network, it means it can be used to represent digital entities. Since most of the contents created and stored digitally are unique, ‘making an NFT of them’ means you can now save them permanently on a blockchain through a process called “Minting” and you get a token that represents that asset.
Minting is the process of producing a new item (historically, a coin) from a template or a readily available infrastructure. What this means for NFTs is that you can create or produce the original version of that your digital asset on the blockchain of your choice.
After minting the NFT of your digital content, it means you are the only one able to legally transfer or sell these digital assets. You might say, “But I saved some NFT images online two nights ago, does that mean the NFT of the same image is now useless to me?” No. The pictures taken of the Monalisa painting cannot be sold like the original artwork located in the Louvre Museum in France.
How can You make money from NFTs?
- If you are content creator (e.g., a Writer), you can mint your contents that you have written as an NFT and then you sell it.
- If you are a musician, you can make your songs as NFTs for your fans
- If you are an artist or a designer, you can mint your artworks as NFTs and sell it to art lovers. (e.g., Degenerate Ape Academy, Bored Ape Yacht Club, Aurory etc.)
How to buy NFTs
There are two steps in minting NFTs, these are:
- Create a wallet that is compatible with the blockchain you are interested in (not an exchange-based wallet): If it is on Solana for example, you can create a wallet from Solflare or Phantom and if it is from Ethereum, you can create a wallet using Metamask.
- Fund the wallet with either Ethereum or Solana as your choice may be from an exchange wallet like FTX or Binance.
There are different platforms already available to trade verified NFTs depending on the blockchain network you are interested in. The most popular marketplace is Opensea and it is on the Ethereum Network.
After connecting your wallet that has enough funds to purchase the NFTs, then you can buy the one you’d like to purchase. Don’t fret if you cannot afford the floor price of a Bored Ape Yacht Club, I can’t too. That makes two of us. There are many more NFTs on Ethereum and on different Chains with different prices that you can buy.
If you want purchase an NFT that is on Solana network, you can navigate to MagicEden, connect your wallet and explore.
The above NFT known as the Degenerate Ape Academy is the most traded NFT on Solana – over 1 million SOL has been traded on this collection of excellent handwork. The Art speaks for itself – really degenerate and spoilt apes!
The name of this NFT collection is Solana Monkey Business. It is also one of the most popular and widely traded NFT on the Solana blockchain.
How to Sell NFTs
To sell your NFT is as easy as buying one. All you have to do is connect your wallet to the Marketplace of your choice and click on the SELL button wherever it is on the app. After setting the price then you list the NFT.
Make sure you do not make a mistake while listing. An example of this kind of mistake was when in mid-December, 2021, someone mistakenly listed their Bored Ape Yacht for $3,000 instead of $300,000. And a fast buyer quickly relieved the seller of their NFT. Sad.
Communities and NFTs
If you notice from some of the NFTs I have mentioned above, they are part of a collection of similar artworks. You might think “How can they be non-fungible since they look alike?”. If you look at them closely, they are similar in appearance but each of them possesses some traits that makes them unique.
The Degenerate Ape
What this does to holders of this NFTs is a fostering of individuals and groups from different part of the world with different backgrounds and different experience. They get to build things together around their mutual interest and just, you know… vibe.
(Note: Some parts are not deeply explained like how to mint your own NFTs because that would make this article bulky. I might release some tutorials that would explain that.)