What Is An NFT – Non Fungible Token?
The Crypto world has been in a frenzy for the past few weeks over the Ethereum and Art love child that are NFT’s, but what is an NFT? Simply put NFT is short for “Non Fungible Token”, it is basically just a fancy way to say, “A specific crypto token that represents something unique. For example fiat currency and crypto currency are “fungible”, one bitcoin can be exchanged for any other bitcoin just as one USD can be exchanged for any other USD, they are all the same with no uniqueness. The difference between a USD and a Cryptocurrency Like Bitcoin is that a USD has a physical counterpart, the paper bill while Bitcoin is fully digital.
The art aspect comes into play and changes the “fungible” to “non fungible”, for example a famous painting, let’s say the Mona Lisa, is “non fungible” you can not exchange it for another Mona Lisa because there is no other Mona Lisa it is unique. The reason why the Mona Lisa is not an NFT is because just like the USD it is physical in the form of a painting and does not have a specific digital token assigned to it. Let’s combine all of these aspects together to explain NFT, it is a one of a kind (non fungible) piece of digital art that has been assigned a specific token on the Ethereum block chain. These artworks are not always still images, there are some NFTs that are Gifs, MP3s and MP4s many artists opting for 3D rendered visuals. NFT has become one of the best ways for artists to sell their art online in a decentralized community.
Now this all sounds great right, but of course there is the dark cloud of doubt, “if it’s digital art why would I buy it when I can screenshot it?” Well you can just screenshot or screen record any NFT you find on the internet, but that doesn’t mean you own it, you may have what looks like the NFT but according to the Ethereum blockchain you are not the owner. To explain this idea better imagine you wanted the Mona Lisa hanging on your wall, now unless you are ready to drop 125 million dollars on a painting you might want to opt for a cheaper version such as a print. This print looks just like the Mona Lisa, but here’s the kicker, it’s not the original, just like a print of an famous art piece doesn’t mean you own it, a screenshot of an NFT doesn’t mean you own it.
How are NFTs created?
So let’s say you are an artist and want to create your own NFT, how would you do it? It’s a very simple process called “minting”. A prerequisite to minting is having an Ethereum wallet set up as minting costs money (more on this later). When an NFT is minted all that happens is that a unique token is assigned to that digital art work, even if you took the same image and minted it two times, there would be two different tokens assigned the same so there are no fakes. Minting can be easily done through minters like Rarible, Oceansea or Nifty Gateway, which have a very simple minting process. Once your art has been minted you can set a price and send it out for the public to buy. As stated earlier minting cost money, minting prices do fluctuate depending on the demand for minting and can range from 10$ to about 100$. Most sites will refer to the minting fee as “gas”, basically you are paying to have your NFT delivered to the Ethereum blockchain hence the term “paying gas”.
An NFT investment.
Just like physical art some NFTs are very valuable in the public eye and receive multiple transactions a day in forms of the original artist selling the art to collectors or collectors reselling their NFTs to other collectors. On Opensea.io the most popular NFT is “Crypto Punks” which has on average
㆔ 11,960.98 (21,640,163.85 USD) worth of NFT transactions a week. The majority of these pieces are bought as an investment because of their high appeal and sold at a later date for higher than the initial purchase price from the artist. Many NFT buyers either value the art because it appeals to them or value the art because it belongs to a collection (for instance only 10,000 crypto punks were ever created) and can be resold. One of the best parts about NFT’s is that if you own a digital picture frame, you can display your purchased NFTs on your walls just like classic art.
Up Incoming NFT artist.
One of the newest prospected collections is from the artists by the tag @BlxckOut0 on twitter, this project was named by the artist as “The Halo Project”. The artist plans to create a collection of 1111 unique NFTs and no more after that so they maintain their value. You can find this collection on Open Sea at https://opensea.io/collection/thpg to begin your own “Halo” collection. The original design was created by the artist about 2 years ago when he was working on creating a clothing brand. The basic design was originally supposed to be the logo for the brand but the project was scrapped when costs were too expensive to screen print onto clothes. Recently the artist has gotten into the world of NFT and is using this platform to create the brand he was unable to 2 years ago.