What are NFTs and why should I Care
Understanding NFTs, knowing what they are, what they are used for and how to buy or sell them
“Technology like art is a soaring exercise of the human imagination.” – Daniel Bell
Summary
- NFTs are digital assets that represent a wide range of unique tangible and intangible collectible items.
- NFTs exist on a blockchain, which is distributed ledgers that record transactions.
- Most NFTs are built on the Ethereum blockchain
For the past few months, I've been hearing about NFTs and I had no idea what they were so I decided to check them out and what I found out was pretty interesting and so I decided to write an article about it to help those who were in the dark about what NFTs were like I was.
Let us Begin
below is a picture wityh the words NFTs
What are NFTs
NFTs is an acronym which stand for Non Fungible Tokens(see why they shortened it?), and they are used to describe things which cannot be replaced as they special and have special properties like your computer, your favorite dress or your key holder.
According to Wikipedia, an NFT "is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files."
In simple words, NFTs are digital assets which represent a wide range of unique tangible and intangible collectible items. Collectibles here simply mean anything of value like maybe a painting by leonardo da vinci, a football signed by leo messi, the first Apple 2 computer, things like that.
In other words, NFTs are like digital certificates which show you own a particular item.
Now we understand the meaning of NFTs let's understand...
How they Work
NFTs exist on a blockchain, which are distributed ledgers that record transactions. Think of a blockchain as a database where you cannot easily manipulate the values. Blockchains are the underlying technology which powers crypto currencies.
When you buy a collectible's NFT, it's just like getting a digital certificate saying you own that particular collectible.
Think of it this way, you and a group of other people all want a particular car(collectible) and you all bid for the car but then your price wins and you get the car. The people who were selling the car(creator of the collectible, like an artwork or something) give you a receipt proving you own the car(NFT), but to show it's real anyone can get a copy of the receipt given to you as proof that your bid got you the car(blockchain) but there will be something on you receipt which will differentiate your receipt from thee many others given to all those other people, that something serves as proof of your ownership of the car. So in case one of the many people who got the receipt want to get smart and claim they own the car(collectible) it won't stand.
In other words, it's like one person having the Mona Lisa and others having copies of the Mona Lisa but not the real thing.
Most NFTs are hosted on the Ethereum blockchain and according to the Ethereum website, NFTs have some special properties:
- Each Token minted has a unique Identifier.
- They're not directly interchangeable with other tokens 1:1. For example 1 ETH is exactly the same as another ETH. This isn't the case with NFTs.
- Each token has an owner and this information is easily verifiable.
- They live on Ethereum and can be bought and sold on any Ethereum-based NFT market.
In simpler words,
If you own an NFT:
- You can easily prove you own it.
- No one can manipulate it in any way.
- You can sell it, and in some cases this will earn the original creator resale royalties.
- Or, you can hold it forever, resting comfortably knowing your asset is secured by your wallet on Ethereum.
If you create an NFT:
- You can easily prove you're the creator.
- You determine the scarcity, because you determine how much of the NFT to give out.
- You can earn royalties every time it's sold.
- You can sell it on any NFT market or peer-to-peer. You're not locked in to any platform and you don't need anyone to intermediate.(put's art galleries out of the market ei😅)
Now that we understand how NFTs work let's see...
What they are used
NFTs are basically used for things of value like:
- Art
- GIFs
- Videos and sports highlights.
- Virtual avatars and video game skins
- Designer sneakers
- Music
To read more about the cool things NFTs are used for click here
Since we're developers we're probably thinking about ...
How Build with NFTs
Most NFTs are built on the Ethereum block chain so naturally Most NFTs are built using a consistent standard known as ERC-721 . However there are other standards that you might want to look into. The ERC-1155 standard allows for semi-fungible tokens which is particularly useful in the realm of gaming. And more recently, EIP-2309 has been proposed to make minting NFTs a lot more efficient. This standard lets you mint as many as you like in one transaction!
To read more on how to build NFTs click here
Now you are probably wondering...
How to buy NFTs
Below is a list of sites where NFTs can be bought:
End Note
NFTs are a really cool development in the tech world one that will probably cause a lot of changes in how things like art, signed collectibles(like sports jerseys signed by a famous player), artefacts and even baseball cards. But the technology is still in it's early stages and has a lot of development to do.
And that responsibility will be borne by we developers as have to create more open source tools to make life easier and innovation faster.