NFTs, going beyond pretty jpegs

Hi UNTAM3Rs:

In the month of May, we will be focusing on NFT’s, non-fungible (which means it is unique and irreplaceable like a rare antique) tokens.

NFTs are not just expensive jpegs.

When you hear the term “NFT,” the first image that pops into your mind is likely the pixelated CryptoPunks or those iconic apes.

While digital assets like the ones above have catapulted both the value and adoption of NFTs, the true value and utility of NFTs have yet to be fully realized.

Let’s take a step back and break down the basics of an NFT to help us understand what is all the fuss.

An NFT or non-fungible token is a digital token that represents proof of ownership . An NFT has the following key characteristics:

❄️ Uniqueness - Each NFT is unique. No two NFTs are alike and thus cannot be replaced or exchanged making them non-fungible (which means there is nothing like it and it cannot be replaced. When something is fungible, it is replaceable and exchangeable such as gold or fiat currency).

📃 Ownership – Each NFT represents a specific asset and is trackable because it lives on the blockchain, an open distributed ledger (which basically means it is a ledger system of records that is public for all to see). Within the ledger, it clearly states the owner (usually a digital wallet address) of the NFT and the previous owners (other digital wallet addresses) of the NFT for anyone to see. The NFT legitimizes who has the right to sell, while also making the transfer of ownership seamless through smart contracts (basically code that automates process or functions).

✅ Authenticity – NFTs are hard to copy and easy to verify (yes, we know you can right click but everyone will know it's just a copy once NFT verifications are commonplace). When an NFT is created, also called MINTING, it includes the creation of the smart contract containing a unique ID and metadata which includes the name, description, image, or any other attributes or even specific functions if certain conditions are met.

Note the actual asset the NFT represents does not live “on the chain” 🔗 (that would be very inefficient), just the necessary details like you would see in a title of a car or on a deed to a house.

Anything can be an NFT. The technology underpinning NFTs has transformed the meaning of ownership of both digital and physical assets. Owning an NFT goes beyond owning a fancy jpeg. An NFT is a tool. Owning an NFT can give you access to an exclusive club or earn you music royalties. It can even help you launch your own burger joint! In the coming months we will start to see more new applications and benefits to owning various types of NFTs. 🔮

👛 START WITH SETTING UP A DIGITAL WALLET

Whether you want to create an NFT or buy an NFT, you will have to set up a digital wallet. Most NFTs are built on the Ethereum blockchain, so you will want a wallet that supports ETH. Here is a guide to the latest best rated digital wallets, each has its pros and cons. The most widely adopted and supported wallet is MetaMask. Here is a guide to setting it up.