Eduard

Posted on Feb 25, 2022Read on Mirror.xyz

NFTs: An Introduction

Non-fungible tokens, or NFTs as they are commonly referred to. You’ve undoubtedly heard of them in the previous period, and if not, there’s no need to rush because we’re still early in this new era, and you still have time to learn more about them. After studying NFTs for the past few months, I’ve decided it’s time to write this post to introduce others to this “thing” that is about to transform the world and cause a revolution in many industries. Enjoy!

What are NFTs?

If you are hearing this term for the first time, I believe it will not mean as much to you as it did to me when I first heard about it.

“Non-fungible” signifies that it is one-of-a-kind and cannot be replaced with anything else. For example, Bitcoin and Ethereum are fungible, which implies that if we exchange one Ethereum for another, we will get the identical thing. A one-of-a-kind trade card, on the other hand, is not fungible. You’d get something altogether different if you traded for another one. If you swapped a “Zion Williamson Rookie” card for a “Bill Rusell’s Rookie” card, you’d end up with something entirely different in terms of value and appearance.

I believe that NFTs have been around for a long time but that we were unaware of them. As an example, I’ll use the most popular game right now, Fortnite, although it applies to practically every game. Every Fortnite player desires a skin or a fantastic weapon to acquire greater power-ups or to stand out in-game. These weapons, skins and other items you can obtain in-game are genuine NFTs. The main distinction is that in earlier games, the company owned them, however in this new NFTs revolution, you will own them. You will be able to make money by possessing them ( we will discuss this in another article ). This, I believe, is the simplest description of what an NFT is.

My first mistake, which helped me understand NFTs better, was believing that they were primarily utilized for digital art because that was the keyword when I initially entered this space. They are, in reality, tokens (as the name implies) and can be anything digital ( music, your heartbeats downloaded and turned into AI, etc.). I want you to understand this and not confine your thinking to digital art, as I did at first. For example, ex-Twitter CEO Jack Dorsey sold his first tweet for more than $2.9 million.

NFTs terms and culture

Punk6529 has covered several words and sayings in this fantastic thread: https://twitter.com/punk6529/status/1433002033242595338

I recommend that you read it after you join the space so that you can fully understand some of the comments, news, and so on.

Why would I pay a certain amount of money for a.jpeg when I could simply “right-click” and save it?

What piqued my interest in learning more about NFTs and what drives them was seeing Beeple’s auction at Christie’s when its “Everydays: the First 5000 Days” sold for no more or less than $69 million. It’s just a .jpeg file. That’s when I asked myself, and I’m sure you did as well the above question. Let me express my perspective on this frequently asked subject.

If you had asked me this question a few months ago, when I knew nothing about it, I would have said that it is insane. But, even though I haven’t been in this space for many years, I can confidently say that practically every article and activity in this place is worthwhile. Why? Because purchasing some NFTs will provide you with numerous perks, such as airdrops for using various apps or technologies that have come to fruition in combination with the non-fungible tokens. Aside from the free benefits that I will discuss shortly, I believe that we should also support the artists. We should support all musicians, photographers, graphic designers, and 3D artists, but we should only buy the ones we love and like. (Also, before you invest in any project that you’ve heard is going to the moon, please conduct your study.) Do not listen to me, X, or Y because we may be incorrect. All I will ever say will be educational, stuff I’ve learned so far on various topics, and never financial advice. Thank you!)

Let’s get back to those freebies. Airdrops have been the most popular sort of reward in recent years. Airdrops are a technique of token distribution that allows users who have completed specified steps to claim tokens. The ENS airdrop was probably the earliest and most popular. On November 8, 2021, the Ethereum Name Service debuted its governance token $ENS, and those who owned a .eth domain before October 31, 2021, were able to claim the tokens based on a formula calculated based on the history of your wallet address. The formula looked like this: Age of the.ETH address, Expiry dates ( longer registration got more $ENS ), owners who have set their Primary ENS get a 2x multiplier.

The $SOS airdrop was another one that happened this Christmas and arrived as a Xmas Gift. The $SOS token is the OpenDAO’s token, and it has been used to reward people for using the Opensea platform. Many of us in space have been waiting for an Opensea Airdrop, but someone else has finally done it, and we are grateful.

People received large sums of money through these Airdrops, some of which were life-changing. And why is that? Because they have used and entered the NFT space by both purchasing and using their platforms. This is the demonstrated power of fully utilizing the NFTs space rather than simply “right-clicking” save.

Aside from the perks, the community is what I appreciate most about the NFT environment. The NFT community is one of the most significant communities on the Web and beyond. These are only two of the reasons why I believe it is worthwhile to spend X dollars on an NFT rather than simply “right-click” saving it.

NFTs Royalties

Royalties are, in my opinion, one of the most potent instruments available to NFTs. Royalties can be used in a variety of fields and have a power that will be found soon. Let’s get started:

Royalties — If your NFT creation is sold on a marketplace, you will receive a percentage of the sale. NFT royalty payments are permanent and are carried out automatically through the use of smart contracts ( we will dive into this subject in a different article ). Most marketplaces let you choose your royalty percentage. A basic royalty rate of 5–10% is recommended.

I’ll give you an example of how these royalties are applied. We’ll look at Bored Ape Yacht Club, or BAYC, which is likely to be one of the biggest and most popular projects in 2021. They were first released in April of this year, and each Ape could be minted for 0.05 ETH ($190 at the time). All 10,000 apes were sold within 12 hours, earning the BAYC creators $1.9 million from the inaugural sale. Taking into consideration MAYC and BAKC, their sales have totaled around $1.5 billion since their inception and up to the present. BAYC has earned more than $37.5 million through secondary sales, with a royalty rate of 2.5 percent. This is just one example of the power of royalties.

The royalties can be employed in a variety of areas other than the arts. Take, for example, the architectural business. Assume we are architects, and here is how our conversation would sound without this tool: “ I recently finished the project for your residential complex. I want to be paid for everything I’ve done.” With the advent of NFTs, this conversation may change: “ I recently completed the project for your residential complex. I’m not looking for a specific sum of money, but I would like a 2.5 percent royalty on any sales or rentals you make.” Does that make sense?” This will undoubtedly be a yes. Why? Because it benefits both the investor and the architect. The builder may put that X amount of money to good use, and the architect can earn a nice and well-deserved passive income for the rest of the building’s life.

The NFTs Revolution

Because of their utility and the technology that powers them, NFTs are igniting a revolution in a variety of industries. Fashion, music, art, and gaming are just a few examples. I’d want to talk a little bit about the music industry since I believe it will be the scene of the greatest transformation in 2022.

Artists have never had the right to completely receive what they deserved since the advent of music labels. Apart from building communities surrounding them, they did not and still do not receive the financial rewards they deserve. The label receives the most percentage of the proceeds from every song, album, event, and so on. This is about to change with NFTs, and what’s even better is that not only will the artist be able to gain entirely from their work, but they will also be able to give their fans the option to earn some money from it. Allow me to explain:

I’m releasing an album as an NFT for 50$ (0.0133.. ETH, I’ll talk in $ because it’s easier for you to understand) with a 5% royalty on each sale. So, every time my album is sold on the secondary market, I receive 5% of the proceeds. (For example, sell for $100, I will receive $5.) Aside from the utility of NFTs, we will undoubtedly see further developments in the music industry in the next years.

Aside from the music industry, the fashion industry will see significant changes in the coming year. As the metaverse and NFTs become more trendy, digital fashion will become increasingly popular. As long as I am active in the fashion industry, I will write a separate article in which we will examine how fashion may evolve as a result of NFTs, Metaverse, and so on. Don’t assume that clothes will go away because we can’t walk around nude, yet garments in the digital world may become more vital… We will discuss it, so stay tuned!

How to buy and sell an NFT?

Howfinity’s instruction for buying and selling an NFT is arguably the finest on the Web. I appreciate how well he outlines all of the actions required to acquire or sell your NFT. I opted to send you his video because I believe that a clip is better and easier to understand than just words and photos. However, if you have any questions or don’t fully understand a step or something in this process, please ask and I will gladly walk you through it.

Here is Howinfity’s video, and I hope it will assist you in joining this fantastic community.

Conclusions

We’ve reached the end of this post, and I hope I’ve piqued your interest in learning more about NFTs and better understanding them. The goal of this blog is to invite as many people as possible into this place because it reflects our world’s future. NFTs, along with Web 3.0, Blockchain, Decentralization, Smart Contracts, and many other innovations, will shape the world in the coming years. In future posts, we’ll discuss and try to understand them.

I am thrilled about this space and everything that is and will be happening in the coming years. Many industries are set to undergo major revolutions, and a better world dominated by communities is likely to emerge.

Feel free to ask any questions you have on these or other issues, and please let me know if I missed anything.

*The story was first published on Medium on December 30, 2021. I decided to relocate it here for a step-by-step migration to Web 3.0.

Thank you very much! Have a wonderful day!