The world of NFT, crypto art, blockchains, and even Metaverse isn’t easy to unravel for newcomers. But time will tell, having a firm grasp on the basics will, at the very least, keep you in the know and maybe even turn you into an aborigine or collector.
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The NFTs are digital assets that are unique, creating digital scarcity. They contain identifying information recorded in smart contracts (Blockchain) and can’t be duplicated or divided. They have many use cases, including for digital collectibles, artwork, music and in-game tokens amongst many other possibilities.
What is NFT?
Non-fungible tokens, or NFTs, are digital assets that are indivisible and provably unique. They can be used to represent both tangible and intangible items.
It’s this information that makes each NFT unique, and as such, they cannot be directly replaced by another token. They cannot be swapped like for like, as no two NFTs are alike. Banknotes, in contrast, can be simply exchanged one for another; if they hold the same value, there is no difference to the holder between, say, one dollar bill and another.
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Bitcoin is a fungible token. You can send someone one Bitcoin and they can send one back, and you still have one Bitcoin. (Of course, the value of Bitcoin might change during the time of exchange.) You can also send or receive smaller amounts of one Bitcoin, measured in satoshis (think of satoshis as cents of a Bitcoin), since fungible tokens are divisible.
Non-fungible tokens are not divisible, in the same way that you cannot send someone part of a concert ticket. Part of a concert ticket wouldn’t be worth anything on its own and would not be redeemable.
CryptoKitties collectibles were some of the first non-fungible tokens. Each blockchain-based digital kitten is unique; if you send someone a CryptoKitty and receive a CryptoKitty from someone else, the one you receive will be a completely different CryptoKitty from the one you sent. Collecting different digital kittens is the point of the game.
The CryptoPunks are 10,000 uniquely generated characters. No two are exactly alike, and each one of them can be officially owned by a single person on the Ethereum blockchain. Visa just bought one recently for more than $140,000!
What makes NFTs so special?
Non-fungible tokens have unique attributes; they are usually linked to a specific asset. They can be used to prove the ownership of digital items like game skins right through to the ownership of physical assets.
Other tokens are fungible, in the same way as coins or banknotes. Fungible tokens are identical, they have the same attributes and value when exchanged.
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How is NFT related to art?
Because it is securely stored in the blockchain, an NFT is unique and non-interchangeable. Photographs, videos, gifs, audio, and really any digital file can be represented as an NFT. Even Tweets are being sold as NFTs! NFTs can be as original as a painting or as collectible as baseball cards.
How are NFTs used?
As well as for crypto-collectibles like CryptoKitties, non-fungible tokens can be used for digital assets that need to be differentiated from each other in order to prove their value, or scarcity. They can represent everything from virtual land parcels to artworks, to ownership licenses.
Non-fungible tokens are not traded on standard cryptocurrency exchanges, instead they are bought or sold on digital marketplaces.
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How to buy NFT tokens
Non-fungible tokens can be purchased on a huge number of NFT marketplaces, including Async Art, Foundation, Nifty Gateway, OpenSea or SuperRare Marketplace amongst many others.
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