The term NFT has been popular and much hyped recently so it will be nice to make an introduction to Nfts for beginners and other internet users. Many people still find it fascinating and strange on the subject so I will try to make it as simple as anything. There are various articles and news about Nfts so you advised to keep yourself abreast with them.
Let me not bore you with many jargons, I will walk you through what an Nft really is, a simple real life definition of Nft, Nft processes and popular Nft marketplaces.
WHAT IS NFT?
Well NFTs stand for Non Fungible Tokens. A non fungible asset refers to something of a distinct value. NFTs are still part of the crypto ecosystem because they share the same functions as normal crypto tokens that is they can be stored, transferred or traded across the blockchain. But its distinct from normal crypto tokens in identity. Mr. A and Mr. B can possess the same Bitcoin token but nobody can possess exactly the same NFT tokens. They may look similar like identical twins but they have different features.
So you can store them in your normal crypto wallet if they support Nfts and you can transfer or list them in marketplaces just like you deposit and trade your tokens in exchanges.
Nfts come in the form of digital items stored in the blockchain. These includes artworks, music, videos and so on. These tokens are stored on the blockchain which gives them a different identity forever. So each NFT metadata and transaction history can is stored and can be viewed by anyone online.
REAL LIFE EXAMPLE OF NFT
I will use a real life scenario to capture an example of NFT. I’m adventurous in nature so I engage in many activities offline and online. They range from trying to cook a delicacy I saw somewhere, travelling, soccer and so on. In this particular case, I tried to cook a jellof rice I saw on the internet. After cooking my food which was slightly different and funny looking from the original version. I decided to keep a memory of it by taking a picture of it. You can see the picture below.
I can turn my food picture into an NFT by minting it on a particular network maybe etheruem. I can do that in any Etheruem Nft marketplace lets say Opensea or any other platform. By uploading it on the blockchain, a metadata which is the identity is created and stored in the blockchain and it can be accessed by anyone.
For the moment, Im still the sole owner. I can store it in my wallet or I can still decide to sell it to someone else by listing it in a marketplace like Opensea. Mr A sees my NFT in the marketplace and bids for it or decides to buy it for $1000. I get his $1000 minus fees and He gets my NFT. The NFT is now his property which He can still decide to keep or sell to another buyer. Every transaction history and details are automatically stored on the Blockchain too.
You might wonder, My food pics for $1000 dollars? That’s just an illustration, it can be less or more. In fact, some NFTs were solved for million of dollars! Yes that a Fact!
These are the stages that NFTs pass through.
- Nft creation which is the first stage where the digital art or collectible is created.
- Minting which involves uploading the art to the blockchain via a platform. These platforms are scattered across various networks from Etheruem to BSC to Matic, Solana and so on.
- Listing in Marketplace. You can upload your minted Nft to any network supported marketplace where you can trade it for another asset. You can also buy an already minted NFT if you want.
They are just secondary marketplaces where you can trade NFTs i.e. buy or sell Nfts with other assets like tokens or fiat. They charge transaction fees for transactions just like crypto exchanges. Popular NFT marketplaces includes
Opensea which is the largest nft marketplace globally. Its based on the Ethereum network.
Rarible: The most open and permissionless NFT marketplace for everyone.
Binance: The worlds largest crypto exchange by trade volume has a marketplace for Nfts.
Others includes Bakeryswap,Yooshi on BSC, MagicEden, SolanArt and Digitalmarketplace on Solana and others.