NFT - Explain Like I'm 5
Non Fungible Tokens (NFT) is the ability to create 100% unique, digital 'finger prints' that can be bought, sold, or transferred.
Basically, NFT = "hey I own this (item) and I can prove it with the unique token I have in my crypto wallet"
NFT Frequently Asked Questions:
Q: What do I actually own when I buy an NFT?
A: You get a 100% unique Ethereum token in your wallet that represents whatever art you chose to purchase (and can be verified). This token can be transferred, sold, etc...
Q: Can I buy NFTs with dollars or real world money?
A: No, well, kind of. NFTs are on the Ethereum blockchain, and are bought and sold with the Ethereum crypto currency. (ETH). However, you can buy ETH with real world money on Coinbase and purchase your NFT with that ETH. The price of ETH fluctuates, keep this in mind.
Q: But can't the .jpeg file I buy be copied / pasted etc...?
A: Well, the mona lisa is "copied and pasted" every day, and hung in homes, offices, etc... But copy / paste doesn't mean they own the Mona Lisa. Value is in ownership. Which NFTs can prove very easily.
Q: Can't people crop / alter existing NFT art and re-sell it?
A: Sure, just like many people have sold fake million-dollar art work in the physical world. The obvious answer is to buy from verified artists on NFT marketplaces. Do your research into an artist or project before purchasing an NFT, just like you would with a car, house, physical art, etc..
Q: How can the REAL artist prove that a copy is a FAKE?
A: this is what makes NFTs revolutionary. Every time an artist mints an NFT, it is permanently timestamped on the ethereum blockchain, and cannot be reversed or deleted. So pointing your finger to your "time stamp" is all you need.
Q: Can only GIFs and images be sold as NFTs? What about physical items?
A: Surprisingly, NFTs have no bounds! Check out these phyiscal Uniswap socks that released as an NFT. At the time of the screenshot, they're going for $115,000!
Where to buy NFTs?
Just like collectible baseball cards, NFTs can be purchased from an artist or organization's website when they are created (i.e Crypto Punks) , and later can be transferred and esold on NFT marketplaces such as Rarible.
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How To Collect Digital Art. Discover Tokenized Digital Art. Artists issue authenticated single edition digital artworks. These are certified on the Ethereum blockchain to prevent forgery and provide historical provenance. Buying & Selling Purchase at the asking price or make an offer by placing a bid.
Known Origin is a digital art marketplace powered by Ethereum. Discover, collect and invest in rare, limited edition digital artworks from some of the world's leading artists and creatives.
Foundation is a creative playground for artists, curators and collectors to experience the new creative economy.
Mintable.app - The best marketplace for artists and sellers of digital items. Private, unlimited, files on the Ethereum blockchain
How To Purchase NFTs?
👉 Check out our guide on purchasing NFTs here: Buying NFTs
How To Mint and Sell NFTs?
👉 Check out our guide on minting and selling NFTs here: Sell NFTs
NFT Royalty: Crypto Punks
There are 2 NFT projects that basically revolutionized and inspired the creation of the NFT token itself which we now know was Ethereum's 'ERC-721 token.'
Basically, when you buy an NFT, you're buying a unique 'ERC-721' token, which represents the item you have purchased ownership of.
The main catalyst of NFT's:
Crypto Punks - Most recent record sale = $13 million USD.
- Crypto punks are a set of 10,000 unique pixel art avatars which have different attributes.
- Attribute examples: Glasses, beard, male, female, smile, frown, etc...
- These 10,000 punks got randomly mixed with different attributes, some rarer than others.
- in 2017, each of the 10,000 punks were redeemable for FREE by LarvaLabs.
- Now, since no more will ever be made, they are being re-sold for insane amounts.
Why so expensive?
- Punks are seen as the first NFT. ("NFT Royalty"), which gives them historic value.
- 10,000 punks means very limited supply, and demand is only INCREASING.
- Punks are showing to be a great Store of Value for Ethereum holders. Like real art.
Where can I buy punks?
Popular NFT Collections
NFT Flipping Opportunities Everywhere:
Watch this story of Mark Cuban's NFT saga, and how an experiment turned into a lot of money:
BE CAREFUL: NFT is a revolutionary movement in ownership and the market is being saturated with NFT art. Many NFTs will NOT be a good investment in the long term. Purchase what you can afford to not resell. Not financial advice, but crypto punks are probably the safest bet for long term Store of Value.