The surge of cryptocurrencies, blockchain technologies, and smart contracts over the recent years has evolved into something even broader, the creation of Blockchain-based Digital Arts and Assets called NFTs.
NFTs or Non Fungible Tokens are unique, algorithm-based works of arts, music, videos, gif, cards, templates, or anything from the real world that can be uploaded as an image file to the Blockchain.
They are coded into digital, virtual pieces of artwork and held in the secure database of the blockchains.NFTs are minted and transferred ownership through several Smart Contracts which is a special feature of the Blockchains.
The economic term fungible means “interchangeable” and this applies to cryptocurrencies like Bitcoin, Ethereum, Litecoin or so many others which can be swapped from one to the other.
Hence, non-fungible means which can’t be interchanged, and each nonfungible token [NFT] is unique, one-of-a-kind, and different from each other in characteristics and traits.
The unique characteristics and traits make NFTs valuable, and value increases more depending on their scarcity and also depending upon the creators and holders of the NFTs.
Sylvester Stallone, Madonna, Grimes, Snoop Dogg, Eminem, LeBron James, Johnny Depp, and many other celebrities have bought or created their own NFTs which all are valued at a few hundred thousand dollars each.
Some of the famous names behind the creation of those NFTs are Yuga Labs, Beeple, Larva Labs, Micah Johnson, Pak, and currently they are the biggest creator names in the NFT world.
Games, merch, events, clubs and fashion wares, and much more have been designed around NFTs. The first-ever NFT game developed was Etheria, back in 2015.
From 2020-2021, NFT market trading volume has risen 21,000% to $ 17.6 Billion.
What are Blockchains and Smart Contracts?
A Blockchain is a database operated by a distributed network of participants. It is more like an electronic ledger that keeps records of transaction certificates or contracts, but here, data can be entered but can’t be altered or erased.
A single entity is not used to enter information; multiple participants use cryptography [encryption or coding of data] to validate new entries.
Usually, these are done through a computer network belonging to the miners connected to exchanges and NFT marketplaces, and these are public blockchains and anyone can look upon the transactions and data.
The first-ever Blockchain is the Bitcoin blockchain, created back in 2009. There are private blockchains too, that are used for business deals by companies like IBM, Amazon, JP Morgan, Intel, Mastercard, Paypal, and some others.
Specially coded encrypted codes are used at both ends of the computerized network. These are the Smart Contracts.
Due to the encryption, they are safe and quite impossible to be hacked and these codes carry out the functions of the Blockchains without interference from any intermediaries.
If someone sends a lesser amount of crypto or fiat currency than it’s supposed to be sent, the transaction will not take place and that’s how these smart contracts are programmed, to accept commands exactly as they are programmed to.
How to mint an NFT, from where to mint an NFT?
NFTs are minted and are acquired through Cryptocurrency Wallets. Metamask, Trust Wallet, Binance, Math Wallet, Coinbase, and Alpha Wallet are some of the top wallets that give access to NFT minting and the marketplace.
Different wallets have access to different marketplaces. Metamask is the most widely used and is specialized for minting Ethereum based [Erc721] NFTs. Erc721 is the most widely used chain to mint, hold or sell the NFTs.
Some of the best and trusted NFT Marketplaces are :
Opensea [Erc721 NFTs], Rarible [uses token RARI to mint NFTs], Nifty Gateway [for art, curation and music]Mintable,Theta [uses its own tokens THETA for minting],NBA Top Shot [for Basketball video clip NFTs].
The most popular place for minting and selling NFTs is the Opensea. And it’s quite simple to create an NFT using their tools.
- At the top right corner of their website is the “Create” button
- Next comes a button “Connect wallet”
- Select “My collection”
- Upload Artwork
- Add a name and description
- Create a folder
- Assign image
- Add a banner image
- Click “Add new item”
- Sign a message through the wallet
- Upload an NFT image, an audio file, gif, or 3D
- Add traits and attributes
- Sign using the wallet to confirm the creation
The NFT is created and appears in the collection.
For the above process, the wallet needs to have enough Ethereum to cover the gas fees, which is a fee imposed by the Ethereum network to compensate the miners to provide the security and computing power that is needed to carry out the whole process.
The subject NFT might seem very complex to many, but with the modern Blockchain technology and the Crypto wallets combined with the marketplaces and developer tools, it has become very easy for the general digital assets lovers.
It’s important to understand NFTs because, in the not-too-distant future, they will be the future of both modern and ancient arts.