An Introduction To NFTs
Unlocking The Potential Of Blockchain Technology
NFTs, or non-fungible tokens, are one of the most exciting areas in blockchain technology. This introduction to NFTs will give you an overview of what NFTs are and what they can do and introduce you to some of the best places to buy NFTs. The opportunities are endless, so what are you waiting for?
What is an NFT?
Non-Fungible Tokens (NFTs) are simply digital assets that are unique and distinguishable from other digital assets. The term "non-fungible" refers, more or less, to anything that is one of a kind and cannot be switched out for anything else. For instance, a Bitcoin is fungible, meaning that if you swap one Bitcoin for another, you will end up with the identical item.
The difference between non-fungible and fungible tokens is significant - an individual fungible token isn't necessarily differentiated from any other token. That means there isn't any single point where an entire fungible token's history can be traced back to its beginning. This differs significantly from non-fungible tokens, which contain information that enables each token to have a distinct existence on a blockchain.
What is a Blockchain?
A blockchain is a distributed, public ledger. It functions as a globally available data source that provides transparency and trustworthiness that is not guaranteed by current centralized institutions, such as banks and governments. In addition, it works continuously without a central repository or singular administrator.
For example, if you wanted to open a bank account at your local bank, but they were too busy or didn't have enough employees at one time to fulfill your request, how would you feel? You probably wouldn't be happy because banking isn't available when you need it. A blockchain can solve that problem.
With NFTs, you can attribute a physical item to a token that proves its authenticity. And while NFTs are a very new concept, they have been proven extremely valuable in cases where one digital copy or instance of an item cannot be replicated or separated from another copy.
Ishita Banerjee, the artist behind Soul Curry Art, has created many NFTs, many of which are available on Ethereum’s blockchain. Each one is unique and can't be copied or reproduced.
The most popular NFTs by far are called PFP or Picture-for-Proof tokens. These allow users to simply pre-order products or services and have them delivered later.
Bored Ape Yacht Club is one example that has enjoyed considerable success—owning a Bored Ape Yacht Club token grants holders access to exclusive communication channels, discounts on branded services, events, and other VIP benefits. For example, their ApeFest 2022 event was a smashing success, featuring live performances from Amy Schumer, Future, Haim, Snoop Dogg, Eminem, and more. This creates an even more social experience than it would be if tokens were only limited as usable for purchases by members themselves alone.
What makes Access different from PFP and Utility? There are two types of access tokens, non-tradable and tradable. Non-tradable access tokens can only be used by a specific group or person, while tradable access tokens are available for sale or trade on a cryptocurrency exchange.
These tradable access tokens may also be considered a ”club membership” of sorts, at least a digital version, where ownership is verified, and benefits exist within the closed system of the club. Meanwhile, non-tradable access is typically used by organizations to sell goods and services that are delivered digitally, such as video games and movies or web content.
Admit One, a private group limited to 1,000 people, is a popular example of an Access NFT. Holders of the Admit One NFT get special access to concerts, Discord servers, live events, and more. Proof Collective is another private group where being a holder of the PROOF Collective NFT is the only way to join the Discord server, attend various in-person events, and even get access to special mints from various NFT artists.
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Where Can I Buy NFTs?
The good news is that there are a few platforms, known as NFT marketplaces, where you can buy and sell them. OpenSea lets you browse and buy over 700 crypto-collectibles from 200+ dApps, with more added weekly. OpenSea focuses on ERC-721 and Ethereum-based collectibles, so if you're looking for something different, check out LooksRare or X2Y2.
For collecting the industry's best visual art, there are platforms like SuperRare, KnownOrigin, and many more. Many NFTs are not only unique but add value and overall aesthetic appeal to the owner. While OpenSea is the #1 current marketplace for NFTs, many more are emerging and being built right now! Magic Eden has grown considerably, built upon the Solana ecosystem, providing artists and collectors an alternative blockchain to interact with!
NFTs Empower the Creator Economy
NFTs provide a whole new means for creators to monetize their efforts. Thanks to NFTs, artists can create limited-edition digital artworks that can be sold or traded among collectors. Musicians can profit from live recordings or songwriting royalties that cannot be reproduced or redistributed.
In addition, each artist can customize their platform and channel by setting custom rules and parameters via smart contracts. For example, a concert ticket might only grant access when a fan is wearing an RFID wristband with a particular ID code registered in advance on the blockchain.
The royalty structure of NFT smart contracts is the real “next level” opportunity for creators since they can immediately benefit from secondary sales of their work, earning royalties in perpetuity due to the blockchain's nature.
For example, a SoulCurryArt piece can be sold originally from the artist, Ishita to a collector. At any point, that collector can easily resell that piece (if they so choose), and Ishita would receive her royalty based on what she chose when initially offering the work. This secondary sales revenue has not existed for artists… until now.
Allowing Creators to Control Their Content
It’s no secret that content creators have a hard time controlling their intellectual property in today’s digital world. For example, if an artist creates an image or piece of art, they cannot prevent it from being used in ways they didn’t intend.
Likewise, some publishers and film companies struggle to stop other people from uploading altered versions of their work online. Developers can create verifiable scarcity by turning any digital asset into a token on Ethereum’s blockchain and attaching it with metadata and a unique ID. This means a creator could track who owns their images or whether someone has plagiarized their written work.
Digital artwork is gaining more exposure worldwide, giving artists greater control over their creations and enabling buyers to acquire valuable pieces at an affordable price. Unlike traditional art, crypto-collectibles are not easily replicated or damaged, making them rare in ways that appeal strongly to investors and collectors.
The best part? The crypto-art market is just getting started.
It's poised for growth as it gains popularity among enthusiasts and new users. With blockchain technology providing a secure way to store these unique art pieces, it's time for you to get involved with these exciting new assets. If you're interested in learning more about how blockchain technology can help transform your business processes, reach out today!