The most simplified explanation of NFTs for beginners

You’re probably feeling left out… everywhere you turn, someone is talking about NFTs (Non-Fungible Tokens), and you don’t even know what it is. If you are interested in learning what the rave is all about, this is the most simplified explanation you’ll find.

1. NFTs or non-fungible tokens are like the e-receipts you get after purchasing a product on Amazon or an online store. The only difference is that these “digital receipts” are stored on the blockchain, so they can’t be duplicated or altered.

A blockchain is like an exhaustive school register containing the names and details of every student, teacher, and non-teaching staff, both past and present.

1. If NFTs are digital receipts, why do people spend millions buying them?

This has to do with what they provide (value — I’ll explain this in a bit). To understand this better, you need to know what “fungible” and “non-fungible” mean.

A fungible item has several replicas that can replace the other without changing value. For instance, $1 is $1, no matter how you look or use it. If we all hold a $1 bill each, we can swap it among ourselves, and the value will remain the same irrespective of who’s holding whose.

Non-fungible, however, means that the item is unique and irreplaceable. For instance, no two persons have the same fingerprint, so we use them for identity verification.

So you can say your fingerprint is a nonfungible asset because if you place it on any ID scan, it’ll only bring out your info, not mine. This is what non-fungible tokens “NFTs” help us achieve with digital assets.

1. Are NFTs only JPEGs and Gifs?

Contrary to what people believe, anything can be a non-fungible asset. NFTs can represent artworks, pictures, videos, music, skits, tutorials, title deeds, certificates — any digital asset.

1. How do NFTs make digital assets valuable?

NFTs get their value from the community behind them. Here’s a relatable example. In Dubai, people bid for vehicle number plates. Lower numbers like 1–10 are more valuable and can go for millions of dollars. In other places, number plates are… well, number plates.

No one cares what number they have. So you can say the Dubai community has given number plates value.

You can also say the same for nonfungible tokens. When a digital asset has a large community, the value increases, especially if it’s scarce (maybe a 1of1 art like the Monalisa painting or a limited supply collection like Cryptopunks) and has utility (allows you to earn passive income, gives you access to premium content, back-stage passes, etc.).

1. Can’t I just right-click and save the image and still get the same benefits?

Yes, you can right-click and save. No, you won’t get the same benefits. Thanks to the blockchain, only the valid owner can verify their ownership when it’s time to reap the benefits.

1. How do I make money from NFTs?

The list is endless. You can make money as a creator, buyer, or service provider.

You can create your own non-fungible asset and list it on popular marketplaces like Opensea. When people find your project and mint, you get paid. (I will make a separate thread)

Secondly, you can buy NFTs and flip them when they gain value. You either grind for a whitelist (more like VIP access) or buy in the secondary market (from people who minted during launch). (I will also make a separate thread).

Thirdly, you can offer NFT-focused services. This includes content writing, website design, social media marketing, graphics design, community moderation, etc. (Another thread)

1. Where can I learn more about NFTs?

There are many resources online. The best ones include:

How to get started with NFTs - Ebutemetaverse

How to transfer NFTs to another wallet - Ebutemetaverse

Conclusion

NFTs are an exciting new technology that is bringing digital assets into the real world. They’re used by creators to reward early adopters, buyers to prove ownership, and service providers to monetize their skills.