Beginners Guide to NFTs (Non-Fungible Tokens)

An NFT is short for Non-Fungible Tokens. So, what does Fungible really mean here? Well, it simply means to exchange one good for another identical item. But here, we are specifically talking about fungibility in terms of money or assets. Doesn't that make it any clearer? Okay, so let's dive a little deep into it. You surely would have heard about bitcoins as they are so much in talk these days. Well, bitcoins are fungible. It is because you can trade one for another bitcoin and its value would be exactly the same  unlike NFTs. As they can not be interchanged for another NFT. We can say that non fungible things are like unique pieces of art that can not be replaced with anything else. Digital art and music are some most commonly bought and sold NFTs.

NFTs are digitally sold assets where people buy the ownership of that particular unique digital asset. We can also call them a cryptocurrency asset. These days, ETHEREUM is one of the leading blockchain services for NFT buying and selling but there are many other blockchains that are becoming very popular as well.

WHY ARE NFTS SUDDENLY WORTH MILLIONS OF DOLLARS?

Have you seen that 'Side Eying Chloe'? The picture of a young girl who has become an internet sensation. Her picture where she gives the expressions as if she feels utterly disgusted at one thing yet trying to act normal is being sold for thousands of dollars at the auctions. These are simply 'Non Fungible Tokens – NFTs' that is a way of owning the original digital image. 

Did you know that Twitter's founder – Jack Dorsey's first ever tweet has also promoted NFTs with bids hitting almost $2.5 million? Oh my sweet Lord! It may sound ridiculous but crypto art is no joke!

We know that digital files or data can easily be copied so, the way that these NFTs work is, the artwork may be tokenized to create a digital certificate to show one's ownership that can be bought or sold in future. NFTs also contain small contracts that they may give to the actual owner or the artist, for instance, a cut of any future sale of the token. 

You may also think 'Can't I just copy something from the internet and say that it is mine?'

Well, if you take a photo of the Mona Lisa or buy a print from somewhere, that would not mean that you have become its original owner now. This is one of the most important purposes of the NFTs that they can be used to trace an object's digital provenance. 

While buying NFTs, there are a few important things that are to be kept in mind at all times.

– Do your own research 

(Don't believe everything you see omg social media. Make your own decisions wisely.)

– Don't share your passwords or bank details with anyone 

– Involve yourself in Crypto Communities 

– Always double check all the details of people or companies you are investing into

Let's dive a little deeper into NFTs. Let's begin with NFT Art. One of the most significant fields of NFTs.

What is NFT Art?

The world is found crazy over NFT art. From the past few months, the NFT talk has literally broken the internet majorly focusing on NFT Art. From platforms like Twitter to CNBC, everyone is chattering about the hype of NFTs. 

So, what is NFT Art?

A digital asset that exists only in the digital world is known as an NFT. You may not be able to touch it, but you can own it. An NFT can be anything from an artwork, an article, music or even a meme such as the 'disaster girl' which has been sold for about $500K.

This is surely a big bang moment for NFTs. The artists, collectors, and speculators have spent more than $200 million on an array of NFT based artwork only in the past month.

Beeple

Let's say Mike Winklemann aka digital artist Beeple.  His digital art piece 'Everydays: The First 5000 Days' has wowed the expectations of people all around the world. It is considered as one of the most unique artwork in history. 

Minted exclusively for Christie's, this digital collage was offered as a single lot sale. It was sold for $69.6 million. 

Christie had never auctioned a new media artwork of this scale before. This surely was a huge deal for all.

Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’s. Image: Beeple

Hackatao

Similarly, Hackatao, one of the most well known artists in the crypto art community. They undoubtedly contributed to the rise of NFT art. The total sales volume of the Hackatao NFTs is said to be about $ 34.16K while the average price of one Hackatao was $ 34.2K. The word 'Hackatao' can be split into two words, 'hack' and 'tao'. Hack meaning the pleasure of going under skin or discovering what's hidden and tao meaning dynamic balance.

Hackatao's art pieces mainly involve the major issues of society, environment, humanity, and crypto along with the references to art history, symbolism, and psychology. 

Christie's London announces a digital companion piece to Leonardo da Vinci's penetrating study Head of a Bear in collaboration with digital artists like Hackatao, an artist from Milan and who have been pioneering the crypto art space since 2018. This masterpiece is based on the concept of the continuum and was released on SuperRare for a bid, as Christie’s auctioned off the original drawing of Bear’s Head by Leonardo Da Vinci for about 12 million dollars.

Hackatao x Christie's: HACK OF A BEAR

Generative Art/ Crypto Punks

The process of algorithmically generating new ideas, forms, shapes, colors or patterns is basically known as Generative Art. All you do is create rules that provide boundaries for the process of creation and then, a computer follows those rules to produce new work for you on your behalf. But it is not as simple as that. Artists spend days or months exploring one idea. However, it is quite simpler for the generative code artists as they can create thousands of ideas in their computers within a millisecond. 

One of the best examples of generative art is CryptoPunks which is also considered as the first most significant NFT art collection.

You surely would have heard about the pixelated punk rock characters famous as CrptoPunks. These are one of the earliest examples of a 'Non-Fungible Token' on Ethereum that powers most digital art and collectibles. There are about 10,000 unique CryptoPunk characters. Most of them are punky looking boys and girls but there are a few of the rarer types as well like apes, zombies, and even an odd alien. Each one of them can be owned by a single person on the platform. They could also be claimed for free by anyone with an ether wallet. But, all of the 10,000 crptopunks were quickly owned. So, now they can be purchased via the marketplace that is already embedded in the blockchain. You can buy and sell punks through this market. 

Did you know that CryptoPunk 7523 was the most expensive cryptopunk to be sold? Who knew that an alien punk carrying gold earrings, a red knitted cap, and a medical face mask could be sold for about $ 11.7 million? 

ART BLOCKS – A Platform To Mint NFTs

Art blocks were launched in the month of November. It is a platform that is dedicated to generative art that transforms hashes, the alphanumeric strings that identify blocks on the blockchain, into colorful abstractions. The number of editions to be produced from the code is determined by the selected artists. When a sale is open, you can get a sense of the style of the work by looking at the coins that have already been issued, but you don't know what you'll get when you purchase them. The script that renders the project on the Art Blocks site is triggered by that action. The image is then minted as a token and the work shows up in the Ethereum wallet. 

Did you know that Daniel Calderon or DCA made the first work on Art Blocks? 

In August, a single Art Blocks NFT was sold for about $3.3 Million worth of ETH. It is one of the 16 art pieces in the vast collection that has now been sold for more than 1 million dollars each.

On Art Blocks, a collection entitled 'Fidenzes' by the artist Tyler Hobbs is currently the most valuable collection. Hobbs used a flow field algorithm to produce the unpredictable non-overlapping curves that are randomly colorized. It consists of 999 unique Art Blocks depicting a pattern of colorful squares and rectangles which are generated via an algorithm. This artwork has been sold for about $3.5 million. 

According to,

https://blog.coinbase.com/the-coinbase-ventures-guide-to-nfts-db1ad58b4e0d

The Fidenza #313 is part of a larger NFT boom which has seen heavy market activity driven by projects such as the CryptoPunks, EtherRocks, and Axie Infinity.

Tyler Hobbs is one of the artists who is currently featured on Art Blocks platform for Ethereum based generative art drops.

The Fidenza #313 NFT, created by artist Tyler Hobbs, just sold for 1,000 ETH.

Metaverse

We can say that metaverse is an environment in which humans interact (socially and economically) through their avatars. Remember when we talked about second life as kids? It's just like that. A virtual world, you can say where the users connect with one another. It refers to a collection of shared online worlds in which physical and virtual reality converge. You can hang out with friends, buy goods, visit places as well but these virtual worlds only exist online. The users can not move between them while retaining their identities. The metaverse could solve this problem by turning disparate online worlds into a single entity. It has been called the next evolution of the internet. 

However, an NFT is a crypto asset that can be used to represent an intangible digital item such as an image, video, or in-game token that is traded as in place of the digital asset they represent. NFTs are also used as tickets for virtual events. 

You may have heard the name 'Decentraland'.

It is one of the most popular virtual worlds. It is a software running on Ethereum that seeks to incentivize a global network of users to operate a shared virtual world. Here, the users can buy or sell digital real estate using its own currency known as 'Mana'. 

Mana is a cryptocurrency that facilitates the purchases of land, as well as virtual goods.

Crypto Culture or NFT Art

Have you ever thought how can some colorful pixelated characters be sold for millions of dollars while other similar NFT art pieces are sold for somewhat less? Well, the answer is tied to the unique culture that has developed around NFT markets. 

New forms of digital ownership have been ushered in by the digital space. The explosion of the online marketplace is changing how art is created, perceived, and owned. A new generation of art collectors is being created if post- internet art pushed artworks into immateriality.

For example, CryptoPunks and Fidenzas, both have a great significance for the crypto community. The foundation of the entire NFT market is credited with being created by CryptoPunks. While Fidenzas were the first visually appealing collection of on-generative NFTs. In this regard, their selling price is worth millions given their cultural significance for investors in crypto. These rare NFTs are a status symbol that are not displayed in one's home but in online communities as well as on social media platforms like Twitter and Discord.

NFT GAMING

Well, the NFT gaming market is witnessing a vast expansion. More and more games are coming up that can earn players crypto rewards. It is expected that the e-gaming industry is going to boom in a few coming years.

NFTs are unique digital collectibles on the blockchain so they can be used as representations as characters, consumables, and other tradeable items in games. 

NFT games are so in trend these days as they are a great way to earn money. You can easily sell your in-game NFTs to other collectors and players and earn tokens with play-to-earn models. 

But make sure to transfer your gaming NFTs to a compatible wallet when moving. When you send the NFT to an NFT marketplace or other user, look out for common scam. Read the rules of any NFT game very carefully.

From the beginning with the CryptoKitties craze, the NFT games have developed and begun to offer play-to-earn models. Game-fi mixes the worlds of finance and gaming, giving players opportunities to earn income as they play. So, you really do not need to depend on winning, finding, or breeding a scarce collectible worth thousands of dollars anymore. Players can experiment with multiple gaming models in different themes. 

Here are a few of the games that you can play to earn cryptocurrency rewards.

Gods Unchained – It is a free to play card game that combines NFT components to traditional card trading games where players have to get high ranking cards. Then these  high-quality cards can be traded for cryptocurrencies on the platform's marketplace.

Evolution Land – In this game, the players have to indulge in activities like construction, mining, science in player-versus-player format. To send, receive, and manage assets from other players, as well as in the form of game rewards, players are required to create a crypto-wallet.

Zed Run – It is a horse riding NFT game. In this game, the players need to purchase the NFT cards of their choice of horse. And, on winning they can make substantial profits by trading their NFTs for cryptocurrencies.

You may have heard the chatter about people earning thousands of dollars a month through 

Axie Infinity. But what really is Axie Infinity? Let's find out.

This is a game made by a Vietnam-based company named Sky Mavis. Axie Infinity has almost 1.3 million users that are surely the NFT gaming world's crown jewel. But what is this game exactly? Simply, it is a Pokémon on the blockchain. It is not available in app stores. You can either download it onto your desktop or sideload it onto your Android phone. Axies are one of a kind digital objects stored on its own blockchain. But if you wish to create new ones, you must breed them by spending currency that is earned within the game or purchased through an exchange. Winning battles simply means earning more of the game's currency. These earnings can then be sold on the open market for real money. This is a great way for players to earn money. Dedicated players are earning thousands of dollars a month by playing Axie. The total sales for these in-game NFTs have recently crossed over 2 billion dollars making it one of the highest selling NFT collections of all time.

Axie Infinity sees you collect cute monsters to battle with. Image: 

NFT PHOTOGRAPHY  

Everyone is talking about NFTs and NFT Photography these days, thinking what the hype is all about? No need to worry! Here, we have got it all covered. 

The digital art work and collectibles is really what sparks up the craziness behind these Non-Fungible Tokens or NFTs. 

But what is NFT Photography or how NFTs impact photography? 

Photography is a popular form of art and when we talk about NFT photography, you have the power to tokenize a photograph that is known as an NFT Photo. And, if you own this token, it means that you own this NFT photograph. 

The value of these tokenized cryptocurrencies is determined by their exclusive ownership. The guarantee of authenticity that comes with owning is something that buyers don't have to worry about. When investing into a speculative market, the value of rarity or popularity of an artist is unquestionably the most important factor.

In 2017, the Canadian photographer, Cath Simard clicked a picture of an empty road on a Hawaiian Island and posted it on her Instagram account. She had no idea that her picture could go so viral and people would go nuts reposting it on their feeds. Four years later, Simard took control of her work by selling this photograph as an NFT for 100 Eth to a collector @gmoneyNFT. The project was called #FreeHawaiPhoto.

Canadian photographer Cath Simard sold her widely stolen photograph of a road in Hawaii as 

an NFT worth $300,000, then released its usage rights.

So, this is our 101 guide on NFTs where we have talked about what NFTs are, why they are becoming so popular day by day, how they are worth millions of dollars, and all fields of NFTs including collectibles, photography, gaming, etc. We have also discussed why creators should turn to NFT platforms. For more, keep following us.