What are NFTs? NFTs Explained in the Simplest Way

Published: July 21, 2022
Ila Bappa Ibrahim mostly known as IB is a proud Computer Scientist, and the founder of MediaHooch, a Kaduna State based branding and marketing company. IB is passionate about writing, teaching, body building, music, art and photography. He has also made a personal commitment to helping those less fortunate through his work with various non-profit and charitable organizations.
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The Buzz about NFTs has become really disturbing. My friends have had to ask me, what is this NFT thing, people have been saying all around. Now, how do I explain without mentioning Terms like Metaverse, Web3, and the rest of these Jargons? In this article, I will Explain NFTs in the simplest way, even a 4-year-old will understand, or at least, I will try.

What Does NFT Means?

NFT is an abbreviation for NON-FUNGIBLE TOKENS. “Non- Fungible” is simply an English word, a synonym for something that is Unique, and also means that there can only be one version of it. 1$ Note is Fungible, meaning there are tons of 1$ notes printed and if I exchange a 1$ note with another 1$ note, I will still get the same thing and the same value.

However, If I have the Mona Lisa Painting, that is Non-Fungible! There is only one original. If I decide to exchange it, it can simply mean a unique tangible representation or a ticket to a particular digital piece of art.

Now, NFTs can be in form of an ART, MUSIC, VIDEO, or any form of art or piece created. For easy understanding, when you think of NFTs, I want you to think of Artwork Collections in a Physical Art Gallery. For Example, Nike Art Gallery in Nigeria or Louvre Museum in France.

Now, when you understand what they do in Art Gallery, it becomes easier- Creating Arts, Holding Exhibitions. Bidding, sale, and collections of these Arts and everything else they do in a physical Art Gallery. NFTs are basically the Digital representation of what we do in Art Galleries, well, just with a little bit more frenzy and advantages.

NFT Players

There are different players when it comes to the NFT space. You can either be a “Creator” or a “Collector”. Creators, as the name implies are those that create the Arts (The NFTs) While “Buyers” or “Collectors” are those that buy from them.

Some have argued that there is a difference between a Buyer and a Collector. They say Buyers are those that just buy and resell almost immediately after the price or the value of the NFT has increased and they make their Profits, while Collectors are those that buy these arts and keep them for the long term may be hoping to sell in the future or just having it in their possession.

NFT Marketplace

Now, that you understand that NFTs are basically what we do in the Art Galleries in the physical world, but it is done here in the digital world. Now, where do we go to buy and sell these Arts in the Digital space? That place is called MARKETPLACE.

A MARKETPLACE is basically like the “Art Gallery” where you go to exhibit, bid, and buy your NFTs. The most popular NFT MARKETPLACE at the point of this writing is called OPENSEA.

However, there are several Marketplaces on the Internet, there is RARIBLE, SOLANART, BINANCE NFT MARKETPLACE, and others. On these Marketplaces, as a Creator, you can go and exhibit or sell your NFT and as a buyer or collector, buy an NFT.

As a buyer or Collector, It is always advisable to know the particular NFT you want to buy already before entering the Marketplace so that you do not get confused by the myriad of NFTs you see on these Marketplaces.

Of course, when you go to a physical Art Gallery to purchase Artwork, you hold your money. Now, in the digital Art Gallery of NFTs which is The Marketplace, you hold your digital money too which are Cryptocurrencies. Different Marketplaces accept different Digital Money.

Each Marketplace stipulates the exact digital money or Cryptocurrency they will accept for you to exhibit or purchase an Art from them. For Example, OPENSEA collects strictly ETHEREUM, While SOLANART collects Solana and BINANCE NFTMARKETPLACE collects Bnb, Busd, and Usdt.

As such, you need to know the type of money the Marketplace you are going to use collects to be able to exhibit or buy your NFT.

Can’t I Just Screenshot an NFT?

I get many questions like since all these Arts Are Digital, can’t someone easily just download them or even take a screenshot or a screen record of them. That is where Blockchain Technology comes in.

Blockchain Tech. is one of the best things to happen in the digital space at large. When an NFT or digital Art is created, it is stored on the Blockchain Technology Network, which will serve as a ledger or a record-keeping book to show the originality and the authenticity of the NFT.

The Blockchain will show all the information concerning the NFT which will include the Creator, the current owner, the history of how the NFT came to existence, and the different prices it has been sold for.

Another good thing? It is available for everyone to see. Thus, when someone claims to own an NFT, you can easily check on the Blockchain Technology Network to confirm the authenticity.

How Do You Make Money via NFTs?

I know this is the part that might you make get more interested. See you, you like money too much. Well, who doesn’t? As earlier stated, there are different players in the NFT space. You can either be a Creator or Collector/Buyer.

If you are a Creator, you can create a Collection of different NFTs. Each of these NFTs in this collection will be going for a price you set it at and when a buyer sees and buys it, you make your money.

As a Collector or a buyer, when you purchase an NFT, you become the owner and you also decide the price you want to resell it another juicy part is that there is a feature that comes with selling NFT, that even when it gets resold from another person to the next, you will still get a particular amount of money, like royalty. Yes, it is that nice.

It should be noted how,ever, that NFTs are not only for you to make money and buy and sell. It also has great benefits, subject to different NFTs and what they offer.

Some Creators who are Musicians or Artistes gives the collectors of their NFTs free access to their Live physical events and shows falzthebahdguy & BNXN are doing something related with their NFTs.

I even heard an Airline is also offering extra meals and other services to holders of their NFTs. The list is numerous.

NFT Common Terms

I will be mentioning and explaining some popular terms used in NFTs Transactions.

FLOOR PRICE.

This means the lowest amount you can purchase an NFT in a particular Collection of NFTs.

MINT

Most of the time, Creators love to launch their NFTs on their personal websites before launching them on these popular Marketplaces.

WL (WhiteList)

This is more like a ticket or access that Creators give buyers to go mint on their website before it becomes public on Marketplaces. They get more advantage because the price will most likely be lower on their website before it goes on public on the Marketplace.

RUG PULL

This is basically when someone creates a fake or duplicate of a real NFT, claims to be the owner, and decides to sell it. The buyer that buys it is said to have been rug-pulled. He has been scammed and bought a Fake NFT.

Conclusion

The truth is, whether we like it or not, NFTs are here to stay. However, not all NFTs will do well, as a matter of fact, many will not last. Having the right amount of knowledge on how to operate in the space will help you go a long way.

I hope this article helps in get a good head start in your NFT Journey. Drop your questions, thoughts, and comments. Remember to share with someone that might need this.

FAQs on NFTs

How do I start?

You can start your NFT journey by watching Youtube videos like this NFTs for beginners.

What’s the difference between using a gas fee and minting for free?

For the “free mint” u will need to pay a gas fee; if u won an airdrop they would mint using your address or they can transfer an nft to your account.

I’ve been trying to connect the opensea to my wallet, but it’s not connecting. What should I do?

I use and recommend MetaMask wallet. Download and Create a Metamask account. Fund it or deposit it with ETH. You can now connect your OpenSea with it. Easier using a PC. You can also check step-by-step guidelines videos on YouTube for that.

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