So what are non-fungible tokens really? They seem to be everywhere, from ape-themed profile pictures to companies like Starbucks using NFTs as digital loyalty program.
An NFT is basically a digital asset stored in a blockchain. A blockchain is a public and shared ledger recording transactions across several nodes in the network. That sharing across nodes is called replication, it means that the data is duplicated and distributed across the entire network, so every node has access to the same data. This data is immutable, so it can not be altered without the whole network agreeing and knowing about it (consensus) and without altering any subsequent blocks.
So a non-fungible token is just an entry stored in a blockchain with some data attached to it. The data attached to an NFT could be anything, generally NFTs reference digital files such as images, videos and audio. Since ownerships are recorded in the blockchain and can be transferred by the owner, NFTs are tradable assets.
NFTs differ from cryptocurrencies such as Ethereum in that they are non-fungible, so they are uniquely identifiable assets, not interchangeable.
NFTs gained huge popularity as a way to buy and sell digital artworks. Even though anyone can view and make a screenshot of the art there is always only one uniquely identifiable owner. Just like in traditional art, the buyer owns the original item.
This ownership model can be expanded, buyers can have access to special perks such as private communities or maybe a printed copy of their art. A recent example would be NFTiff, an NFT collection created by Tiffany & Co, granting the holders the rights to a physical pendant of their CryptoPunk NFTs. So NFTs have a built-in authentication allowing you to authenticate owners of original NFTs.
NFTs vs Traditional Art
NFTs, just like traditional art, are valuable because they are rare or unique. It is often the reputation of the artist and the community behind the NFT which renders an NFT expensive. NFTs are also used as a status symbol, many celebrities endorsed and bragged about owning certain NFTS.
So how do NFTs differ from traditional art? Data is stored on a blockchain and can be verified by anyone looking for it, so the digital signature replaces experts having to authenticate and appraise the art. The digital nature of NFTs gives them many other potential uses besides just being art, as example as an access tool similar to a ticket, in-game items, membership confirmation and so on.
NFTs can be viewed from anywhere in the world, so it is simpler for owners to check up on their art pieces, there is no weight, mass or location attached to an NFT like it is with traditional art, the is also no security having to guard NFTs so they don't get stolen.
Furthermore, NFTs also cut out the middle man. Artists can just create and sell NFTs to their liking and get paid directly without having to go through additional instances. For an artist non-fungible tokens also hold the additional benefit of being more accessible by the general public, which could mean a greater audience. It's a new platform for artists which did not exist before.
There are more benefits to NFTs for creators, especially secondary market royalties. This means that artists get paid for their creations even after the initial sale. Every NFT market out there has a revenue share model, so each time a piece is bought or sold the creator receives a percentage. This can prove to be a very good long-time income in case your collection becomes very popular.
What does it even mean to mint an NFT? Simply put, to mint an NFT means to publish it on the blockchain. It is the first creation of your token so to speak. The mint of your collection is also called the initial sale or initial mint. Whenever you create a new collection, all of the items inside this collection need to be minted first, after minting they will be visible/ accessible on secondary marketplaces like OpenSea.
The initial mint usually takes place either directly from the contract (not user friendly) or like in most cases from a specialized website. Luckily, we provide those websites for you and you don't have to do anything to enable this functionality. After an user mints your NFT, this NFT will be in your users possession and he is free to sell it on secondary marketplaces.
So it is not you who mints your collection, it will in almost all cases be your community. This is called lazy minting, a process where the fees from minting are passed onto your users, so you don't have to pay them. Paying the transaction fees for thousands of items will be very costly!
Creating NFT collections can be a hard and frustrating experience if you have no programming knowledge, luckily we solve that issue for you with our launchpad ↗. Creating NFTs has never been that easy!
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