What’s an NFT?
By now you definitely know what an NFT is but here’s a quick refresher. NFT stands for non-fungible token. This means that a thing is one of a kind and cannot be replaced by something else. Money is fungible because 100 dollars can be replaced by another 100 dollars and still retain the same value.
An explanation of what a non-fungible token is can be explained with the Monalisa painting by Pablo Picasso. Despite there being a plethora of forgeries, copies, and fakes, the most qualified art curators can spot a fake a mile away. That said, Board Apes (the most popular NFTs in the world) can be distinguished from a fake or a screenshot because playing the role of the art curator is the Blockchain. Blockchain is simply a ledger of proof of ownership. When you own crypto or NFTs, the Blockchain records your property in an interlinked chain of data and stores it. Plus, it’s open for all to see.
Why are NFTs popular right now?
NFTs are popular for three reasons.
- Firstly, the underlying technology that supports NFTs (Blockchain) is the most sought and searched for in the past few years. So by affiliation, the NFTs were bound to blow up.
- The next reason for its popularity is the amazing brands and businesses getting involved. We’ve seen mainstream brands like Asics, Clinique, and Coca-Cola involve NFTs in their marketing mix. But also, indie skateboarding brands and artists find themselves making a future from the new technology.
- Lastly, NFTs tie into the part of humans who thrive by owning rare valuables. I call this Utility clout. Humans are generally possessive and the more we own valuables the more we interact with people who have the same collector hobbies as us. This inherently creates a community of like minds. Everyone loves to be a part of a good community.
Also, why do humans buy anything of value?
The answers are brand, perception, and status. The way to communicate your status in the world we live in is by endowing yourself with the finer most expensive things in the physical and digital world. Recently, Twitter created a feature that lets you showcase your NFT as your profile picture. It reshapes your profile picture verifying its authenticity.
The idea behind publicly showcasing your valuables simply means that we want you to judge the book by the cover because what you see is who you are. Being the visual generation that we are, owning a digital asset like NFTs is a great way to do that.
The internet is where it all began, so it’s best to look back as we move forward.
History of the Internet
This shows the direction the internet is headed with this new creator economy by giving you a breakdown of the internet.
- Web 1
This era of the internet is remembered for being a read-only era. This was a period when information was one-sided. Companies would put information out on the internet for consumers to simply read, digest, and read again. Desktops were the only means to access the internet and it was certainly the dark ages.
- Web 2
For Web 2, the keyword is two-way information. Information here went two ways. We’d take what companies put out and we were also able to send information into the internet. Here content was commerce and the blogosphere and social media grew rapidly and became extremely profitable for the big cat corporations.
- Web 3
Internet ownership is the word to remember here as we slowly slip into the web3 era. When people began to lose faith in companies that held all the power, web3 came about to decentralize that power and in a way, but more opportunity back to the hands of users through tokens, aka property rights(the rights to own a piece of the internet and be compensated for it). We will see more of this as we progress.
To understand why NFTs are so big, we have to understand their features.
Minting in NFTs is the equivalent of giving your painting or sculpture to an auction house. It means you’re ready to turn your work of art into an asset. When you mint an NFT, you turn a digital file into a crypto collectible or a digital asset on an NFT marketplace.
NFT marketplaces are most often powered by a stablecoin, which means when you mint, your jpeg, audio, or video file, it becomes digital assets on the blockchain. Going back to what I stated about the blockchain and how ownership is its major duty. Minting an NFT is not an overly complicated process. A marketplace such as Opensea, Solanart, Rarible, or Foundation all provides step-by-step instructions on how to connect your wallet, create, upload, fill in the prompts, etc.
For your mint to be successful and you eventually sell artwork, you need a community around your NFT. Having a community means having a fanbase on all the major platforms designed for community breeding. Instagram, Discord, and Twitter are perfect to build a community around your project. Communities can also drive up the demand for your project. We’ve seen bidding wars happen on Twitter over projects like Cryptopunks, World of Women, NeoTokyo, etc. And these projects skyrocket in crypto value.
One thing that stands out in the NFT space is the quality of the artwork. For Jpeg NFTs (which are the most popular at the moment) Artists who pay attention to their craft and are creative with not just the art but also the storytelling, find it much easier to communicate it to their community.
When there is a story and creativity behind your work it resonates more with your audience. Similar to physical paintings like the Monalisa or Van Gogh. People love and revere this art because of the imagination, creativity, and stories told by the artists.
Now if you’ve ever asked yourself “why do I really need digital art?” then you’re not alone. For me, I’ve come to realize that owning a piece of the internet in the form of art is reason enough. But for the hard-headed cynics still out there, here’s why.
The utility is simply an added benefit or a real-world benefit to owning an NFT. In other words, when an NFT has utility, it translates to the physical world. The celebrity NFT of choice, the Board Ape Yacht Club’s awesomeness is a result of their utility and art. It includes meet-ups with owners of a bored ape collectible which in attendance will be the creme-de-la-creme of athletics, business, and Hollywood. The more your utility translates to the real world, the better your project will do.
Smart contracts act as digital mediators for value exchange on the blockchain. In other words, they oversee any transaction that goes on in the blockchain without third-party intervention. So like your lawyers, mediators, and third-party financial advisors that are involved when a high-value deal is to be made in the physical world, a smart contract acts as all this in the digital world.
Looking to get into NFTs? You’re a little bit overwhelmed? The good news is so am I and so are a million other people in a million parts of the world. Learning daily and doing your own research is the only way to be in a position where you no longer look from the outside. You have a foot in the door. All that’s left is what you do when you get in the room.
Conclusion: A new creator economy
“What’s dead may never die” if you don’t know the meaning of that phrase from the hit show Game of Thrones then let me clarify. When things seem to be dead, lost, abandoned, or forgotten to many, there is still the tiniest hope out there in the universe that it can be revived, found, saved, or remembered, thereby becoming more useful and more powerful than its past self.
The art and collectibles industry for many years struggled to be find footing in the digital era. Artists are underpaid and unappreciated and since the pokemon and baseball cards era, the collectibles industry lost its appeal. NFT is giving power back to the creators with help of the blockchain. Giving value back to the art form and the culture of creativity.