If you don't live under a rock and have access to the internet, you've heard of NFTs, but like many people around, you're completely lost because you don't know what NFTs are and everything seems very confusing. Well... relax, because today you will understand everything! NFT comes from the English acronym Non Fungible Token, so to understand what NFTs are, let's first understand what Tokens are.
WHAT IS TOKEN?
Token It is a digital representation of an asset, such as money, land and other investments. So what is a non-fungible token? If we imagine a work of art as a token, it will be much easier to understand, since one work of art will never have the same value as another, even if it is made by the same artist.
Still don't understand? Think of it this way: a "ten dollars" bill is equivalent to two "five dollars" bills. Even if they are different, they represent the same value: US$10,00. But a “The Last Supper” and a “Vitruvian Man” are not equivalent to a “Mona Lisa”, as it is unique and irreplaceable, just like the other pieces of work. Although they are all by Leonardo da Vinci, none is equivalent to another, so they are not fungible.
Take a look at the board prepared for you:
Now that you understand the concept of Fungible and Non-Fungible Tokens, let's explore the world of NFTs and understand why they represent the next step for the Web.
WHAT IS THE WEB3?
WEB3 is the next step of WEB 2, which is the internet as we know today, its main focus is to bring the power of managing digital personal information back to the user who, for any activity on websites on WEB2, needed a record with name, photo and even address, delivering this personal information to a centralized group that will be entitled to everything they provide there. WEB 3 comes through cryptocurrencies and NFTs to decentralize the need to deliver our information to centralized institutions such as Google, Facebook, etc.
WHAT ARE NFTS?
NFTs can represent different assets, whether physical, digital or physical-digital. We have NFTs in the form of music, paintings, photos, created by unidentified artists and investors/collectors who now have the right and means to show ownership of these assets. The NFTs, in large part, are part of projects that are divided into: PFP (Profile Picture) projects and utilities projects. PFP projects were pioneers in the world of WEB 3 and this is a group of different projects that benefit from the ownership over a particular NFT and the right to use it authentically in their social networks. Crypto Punks are the perfect example of a PFP project, being also one of the firsts.
Check out the CryptoPunks on Opensea
As time went by, just having the right to use your NFT image as a profile picture seemed too little for new projects and then the projects with utilities arrived. These are projects that not only give you the power to own your NFT and use it, but also bring some additional benefit to owning the NFT.
Epic Elephants, for example, donates 20% of its sales to foundations that help keep these animals in the wild.
Check out Epic Elephants on OpenSea
Our dear Ed is another example of a project that brings not only ownership over an NFT, but also the benefits of participating in the development of the film, among other rewards.
WHAT ARE BLOCKCHAINS?
NFTs exist on a blockchain, which is a chain of blocks existing in the virtual world that connects information between hundreds of thousands of blocks, each block being connected to another and containing unique information. There are several blockchains, one being a competitor of the other, some are said to be safer, faster, but all have the same decentralization objective. Among the main blockchains are Bitcoin, Ethreum, Solana, Binance, and others.
HOW TO BUY NFT?
To buy your first NFT you will need a virtual wallet and you need to choose it according to the blockchain that the NFT you want is registered. To buy an NFT from the Ethereum blockchain you will need to use a virtual wallet like Metamask, but if it is Solana, you will need a wallet like Phantom. These changes are necessary as not all virtual wallets are compatible with all the NFT blockchains.
To find an NFT and project interesting to you, you will look for them in marktplaces. There are different types of marktplaces and, just like wallets, they change according to the blockchain that the NFT is stored on. Opensea is the biggest marketplace at the moment, with NFTs from different blockchains like Solana, Ethereum, Polygon. There is also Magic Eden, best known for most Solana Network NFTs and many others.
The NFT's world is incredible and their potential with WEB 3 is immeasurable, but like everything in our life we need to be calm and understand what we are doing before spending money on something. We need to be careful not to get caught by scammers and groups that want to take advantage of us.
Stay tunned to the news and people who are in the market and remember that much more than an image, NFTs creates communities with real people who want to build and innovate together with you on WEB3.
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This post was written by The Jana NFT which is an amazing member of Ed's Staff. Jana is from Rio Grande do Sul, is an engineer and now works helping people to understand and be on Web 3, she is the founder of the podcast @PodBahOficial, team member of @NZBR_NFT, co-founder of @MutantNeighbors, Co-host @VersefyLabs, enterpeneur, Web3 enthusiast and NFT projects consultant. Learn mor about her here.