Understanding NFTs - A Beginner's Guide

What are NFTs? What does it mean to mint? How can I get my first NFT? Can I make one myself?

So you must have heard that Jack Dorsey, CEO of Twitter and Square, sold his first tweet as an NFT (Non-fungible token) for over $2.9 million on March 2021.

When I first started learning about NFTs, I saw them as weird because I did not understand the fundamentals, which was my main challenge. This was my motivation to write this post because I might be educating someone. I have also tried to link amazing resources that have helped me massively in this space.

Introduction

We've seen a number of trends over the last few months, especially in the worlds of crypto, blockchain, and technology.

NFTs are quickly evolving, and though the NFT technology has been around since 2014, over the course of the past 12 months, the general market value of NFTs has only been increasing.

NFTs, unlike cryptocurrency, are not interchangeable, they are unique, and they provide exclusive ownership on the blockchain, which is the source of all the hype. NFTs are changing our world; therefore, understanding and appreciating what NFTs are at a fundamental level is required to appreciate the significance of their innovation.

What are NFTs?

An NFT or Non-Fungible Token is a digital token or asset that we can use to represent ownership of unique items stored on the blockchain. These items could be motion artworks, in-game items, digital collectibles, audios, domain names, and even articles like this one.

Non-fungible tokens (NFTs) are stored and sold on a blockchain network, with Ethereum being the most popular. Because counterfeiting is difficult for a decentralized and permanent record, it becomes trustworthy and tamper-proof.

The ERC-721 standard gave rise to NFTs. ERC-721 defines the minimum interface – ownership details, security, and metadata – required to exchange and distribute gaming tokens. It was created by some of the same people who created the ERC-20 smart contract.

Why is it called “non-fungible”?

Non-Fungible tokens refer to tokens that aren't interchangeable; this basically means that each token is different from another in value and properties.

Fungible tokens are interchangeable and can be split into smaller pieces to produce the same value. For example, if you can exchange a $100 bill for another $100 and you still have $100.

Why Are Non-Fungible Tokens Important?

NFTs are no doubt the big thing right now but let us take a look at why it has gained so much popularity in recent times:

NFTs are important because they are proof of ownership because the blockchain is built to associate ownership to a single account. NFTs are also transferrable, meaning ownership of an NFT can be transferred for-profits can be done easily and quickly as all transaction records are stored on the blockchain.

When we talk of some use cases, NFTs are also used in the sports industry to take records of special moments in football and basketball, which could later increase in value with time and can also be used to generate funds for athletes, teams, and sports leagues.

As a result, the ability to use the blockchain to exchange genuine trade-in assets demonstrates the benefits of non-fungible tokens. NFT purchasers may also resell the NFT for a profit if they think it necessary.

This seems interesting, can I own an NFT?

Owning an NFT is quite easy; you would have to set up your Metamask, a digital wallet that can hold cryptocurrencies and connect it to your NFT marketplace. An NFT marketplace is essentially a platform where you can buy or sell your digital collectibles.

Some of the popular marketplace for NFTs are:

Users do not have to pay minting costs every time they create new NFTs on OpenSea. When you build up your collection on OpenSea for the first time, you are only required to pay once. In subsequent cases, buyers of your NFTs will cover the gas costs.

NFT Marketplaces came limelight when the popularity of NFTs started growing, and more people became interested in the NFT space.

What is Minting?

Minting simply refers to the process of publishing a non-fungible token (NFT) on the blockchain and making it available for purchase. This decentralized database or distributed ledger stores the digital item or file, making it impossible to edit, remove, and change.

Ethereum is the most well-known blockchain for minting NFTs, but Polygon, BSC, and Solana are a few other blockchain platforms that also support NFT minting. Minting an NFT for yourself is pretty easy, so we would be focusing on the largest decentralized platform, which is the Opensea marketplace, and here is how to do it:

Connect your Metamask wallet to Opensea)

Metamask is a cryptocurrency wallet used to interact with the Ethereum blockchain. I have linked the correct website URLs; nonetheless, cross-check every link and website you visit before connecting your wallet.

Open the collection that you have made.

This refers to the art collectible you wish to mint.

Click Add New Item at the top right bar.
Upload the NFT add a name and description to your item.
Next, choose the collection where you want your NFT and fill in the necessary properties and levels
Then, add some stats to your NFT, which are numerical traits that show as numbers
Select unlockable content If it's you wish to hide a piece of information to be revealed only by the owner
Also select Explicit and Sensitive content
Next, choose the number of copies that can be minted and the blockchain network you wish to use.
Lastly, click on Create, and your new item will appear in your collection.

Further Learning Resources

I curated these resources from my research and from the numerous spaces and online communities that I was privileged to be a part of:

This Free NFT Beginners Course was put together by some NFT enthusiasts to help people just coming into the NFT space.
This YouTube Video was shared by a friend of mine who is building a community to help those with limited understanding of NFTs.
Also, keep a close watch on my Twitter posts, I share resources that you would find useful.

FAQs

Let's answer some frequently asked questions about NFTs!

How do I know if an NFT is authentic?

Since NFTs are recorded on the blockchain and the concept of the blockchain is such that it was designed to be decentralized, meaning no one controls it. Hence, every digital asset can be accounted for because each token has verifiable metadata and transaction log that is helpful in telling the owner of such digital token.

You do this by going through the Ethereum transaction directly to know the contract the NFT was minted from; you would need the public contract of the project, which you would find on their Discord channel.
Next, you click on the contract tab in front of you followed by read contract.
Then you navigate to the bottom of the page where you would enter the tokenURI , this is usually the mint number of the NFT you are checking out.
Finally, click on Query button, and you would be given all of the metadata in a readable string format.

How can I make an NFT?

Anyone can make an NFT practically; you can follow the simple steps below to get started:

Create your Collection

The first thing you want to do is to create a collection of art collectibles, making sure it has a nice concept behind it.

Choose your blockchain

Once you have created your collection, you want to choose a blockchain technology you will use to Mint your NFTs. The common ones amongst creators are Ethereum, Polygon, and Solana.

Set up your digital wallet

You would have to set up your wallet compatible with your choice of blockchain. There are dozens of secure wallets, the most popular ones being Metamask (mostly used to access the Ethereum network) and Coinbase.

Pick an NFT Marketplace

We spoke about NFT marketplaces previously, so you can pick any NFT Marketplace of your choice, the most popular being Opensea, which is popular and easy to use for all types of NFTs. We have other marketplaces like Rarible, a community-owned NFT marketplace.

Connect your wallet

Connecting your wallet is pretty an easy step as this would allow you to pay the necessary minting fees for your NFT. all you have to do is visit Opensea for instance, head to the profile icon where you would be prompted to connect your wallet.

It is advised to use the browser provided by your digital wallet, such as the one provided by Metamask.

List your NFT

Your preferred NFT marketplace should have a simple guide that shows you how to list your digital file on their platform. However, I'll link resources on how you can do this on Opensea and Rarible.

Conclusion

NFTs are still a very recent development and will dramatically transform entire industries by radically altering how we share and consume nearly everything. That's a huge development, but we're still only at the beginning of the NFT adoption process.

Binance, a Cryptocurrency exchange company with over 28.6 million users, also has created its own NFT marketplace and has recently partnered with a South Korean entertainment agency to collaborate on a range of blockchain projects, including the NFTs. Collaborations like this will shape the perception of many who are looking to get started in this space.

Thank you for taking the time to read this article, and I hope you enjoyed it! I'm looking forward to seeing how you take advantage of this evolving space.

If you have any questions feel free to reach me on Twitter or Linkedln.

If you want to get started with smart contract development, check out my article.