Understanding NFTs: A Beginner’s Guide

The NFT space isn't just for selling and buying of arts. There's the DeFi side of NFT trading, there's the gaming aspect and a lot more you won't necessarily know except you are told or you are a researcher on your own. That's what will then lead us into today's class. We will be teaching you the basics but we will also assist you by sharing a 30$ material with you to aid your journey.

The best knowledge you can equip yourself with in this century would be Fintech knowledge. YeleTech is doing this for free, not because the knowledge isn't valuable but because you need the knowledge more than we need the money.

NFT trading and the Blockchain industry entirely isn't a rollercoaster. It's either you're making money or losing it. But you can always withstand all that with your curiosity and consistency. The journey may not be an easy one but it will be worth it, eventually.

Get this straight… In this space, you have to do the hard work and that means no one can teach you everything you need to know about the NFTs within a few minutes. You have to be willing to do more research on your own, if you want to know more than the basics.

But for this session, let's examine these:

1. What is NFT?

2. How do NFTs work?

3. What’s worth picking up at the NFT supermarket?

4. Do people really think this is like art collecting?

5. How do I create my first NFT?

There’s nothing like magic in the NFT space. “Um… what’s going on here?” That’s the feeling you experience while reading about people selling pictures for millions of dollars. Or seeing a pot like human head art being sold for thousands of dollars.

Sometime ago, the founder of Twitter put up an autographed tweet for sale as an NFT and it got sold for over a million dollars. This year, the highest bidder so far is bidding to buy that valuable million dollars autograph for just $200. That sounds crazy, right? Well, you will find a lot of crazy things in this space. Bored Ape Yanct Club launched their NFT collection last year's April with a floor price of $200 each. Ladies and gentlemen, the cheapest BAYC NFT you will find on Opensea NFTs Marketplace is worth more than $300,000. It's rare, it's unique and it's interesting.

They recently airdropped their token (Apecoin) to all Bored Ape Yanct Club NFT holders which got some people rich with tens and thousands of dollars depending on how many you hold by the way. In fact, someone borrowed 5 BAYC to earn 1M$ plus in Apecoin airdrop. That's almost #600M when converted to naira. I bet you're now wondering, “what is an NFT”?

Okay, let’s start with the basics.

What's an NFT? WHAT DOES NFT stand for?

Non-Fungible Token.

That doesn’t make it any clearer. Right, sorry. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different.

A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio. Wikipedia

In simpler terms, NFTs are art and art is NFT. The difference now is that unlike the normal art that you know, this one is built and established on the Blockchain.

How do NFTs work?

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or doge coin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs. Blockchains such as Binance Smart Chain, Solana, Fantom and Polygon Matic.

What’s worth picking up at the NFT supermarket?

NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.

I don’t think anyone can stop you, but that’s not really what I meant. A lot of the conversation is about NFTs as an evolution of fine art collecting, only with digital art.

Do people really think this will become like art collecting?

I’m sure some people really hope so — like whoever paid almost $390,000 for a 50-second video by Grimes or the person who paid $6.6 million for a video by Beeple.

Yes, that’s where it gets a bit awkward. You can copy a digital file as many times as you want, including the art that’s included with an NFT. But NFTs are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). To put it in terms of physical art collecting, anyone can buy a Monet print but only one person can own the original.

That's the flex of owning an original Beeple... I think I remember hearing that NFTs are already over. Didn’t the boom go bust?

But have you heard of Penguin Communities?

People have long built communities based on things they own and now, it’s happening with NFTs. One community that’s been exceedingly popular revolves around a collection of NFTs called Pudgy Penguins, but it’s not the only community built up around the tokens. It could be argued that one of the earliest NFT projects, CryptoPunks, has a community around it, and there are other animal-themed projects like the Bored Ape Yacht Club that have their own clique.

Of course, the communal activities depend on the community. For Pudgy Penguin or Bored Ape owners, it seems to involve vibing and sharing memes on Discord, or complimenting each other on their Pudgy Penguin Twitter avatars.

What’s the point of NFTs?

That really depends on whether you’re an artist (creator) or a buyer.

I’m an artist.

First off: I’m proud of you. Way to go. You might be interested in NFTs because it gives you a way to sell work that there otherwise might not be much of a market for. If you come up with a really cool digital sticker idea, what are you going to do? Sell it on the iMessage App Store? No way. Also, NFTs have a feature that you can enable that will pay you a percentage every time the NFT is sold or changes hands, making sure that if your work gets super popular and balloons in value, you’ll see some of that benefit.

You just want to buy and sell back?

One of the obvious benefits of buying art is it lets you financially support artists you like, and that’s true with NFTs (which are way trendier than, like, Telegram stickers). Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.

So every NFT is unique?

In the boring, technical sense that every NFT is a unique token on the blockchain. But while it could be like a van Gogh, where there’s only one definitive actual version, it could also be like a trading card, where there’s 50 or hundreds of numbered copies of the same artwork.

Are NFTs now mainstream?

It depends on what you mean. If you’re asking if, say, my mom owns one, the answer is no but does the world know about NFTs yet? Yes. That's why you're here to know more.

But we have seen big brands and celebrities like Justin Bieber, Snoop Dog, Nike, Puma, Marvel and Wayne Gretzky launch their own NFTs, which seem to be aimed at more traditional collectors, rather than crypto-enthusiasts. While I don’t think I’d call NFTs “mainstream” in the way that smartphones are mainstream, or Star Wars is mainstream, they do seem to have, at least to some extent, shown some staying power even outside of the cryptosphere.

Look? Where?

There are several marketplaces that have popped up around NFTs, which allow people to buy and sell. These include OpenSea, AirNFT, Rarible, and Grimes’ choice, Nifty Gateway, but there are plenty of others.

Could I pull off a museum like heist to steal NFTs?

Part of the allure of blockchain is that it stores a record of each time a transaction takes place, making it harder to steal and flip than, say, a painting hanging in a museum. That said, cryptocurrencies have been stolen before, so it really would depend on how the NFT is being stored and how much work a potential victim would be willing to put in to get their stuff back.

Note: Please don’t steal. you could get yourself in a lot of trouble.

Should I be worried about digital art being around in 500 years?

Probably. Bit rot is a real thing: image quality deteriorates, file formats can’t be opened anymore, websites go down, people forget the password to their wallets. But physical art in museums is also shockingly fragile.

I want to maximize my blockchain use. Can I buy NFTs with cryptocurrencies?

Yes. Probably. A lot of the marketplaces accept Ethereum. But technically, anyone can sell an NFT, and they could ask for whatever currency they want.

Can I build an underground art cave / bunker to store my NFTs?

Well, like cryptocurrencies, NFTs are stored in digital wallets (though it is worth noting that the wallet does specifically have to be NFT-compatible).

Humans are unstoppable. You can learn whatever you set your mind to learn. Nobody taught many of us these things. We do not have that luxury but we still got it in our own way.

Click on the YouTube link to access a free step-by-step guide on how to create your first NTF. Click here, to access the YouTube video.