What is NFT, How is it Made, Where to Buy and Sell? What does it do?
NFT, one of the most interesting digital data in recent years, is closely related to many free works in the digital environment .
Digital files can be easily copied and reproduced exactly as the original. So how do we determine who is the original producer or original owner of a digital work? The only way we can do this right now is if the artifact is made into an NFT with the blockchain.
What Kinds of Artifacts Can Be NFT?
NFT is used to commodify digital assets in the arts, sports, music and many
other popular fields . It has been mentioned frequently since its
first release in 2015 and has a different application than crypto money. Thanks
to NFT, you can acquire new collections or evaluate your digital assets.
In order to learn and understand the details of NFT, you can
find all the details in our article, including what NFT is, its use, how to
turn it into money and examples..
What is the meaning of NFT?
The data unit we know as NFT is used as an abbreviation of Non-Fungible
Token (non-tradable token, non-changeable token, non-exchangeable
money) in English.
How Did NFT (Non-Fungible Token) Come
About? Date
After the production of Bitcoin with Blockchain technology by Satoshi Nakamoto , a
digital revolution took place. This was not the only thing that blockchain
technology, which became famous after cryptocurrencies, brought to
humanity. NFT, which emerged in 2015, was one of these achievements.
When it first came out in 2015, all NFTs were based on
Ethereum. CryptoKitties came out in 2017 and made a name for itself with
its immutable token technology . The increase in the
growth rate of the NFT industry also started at this time.
In 2020, NFT's market capitalization tripled to over
$250 million . In fact, it recorded such a rise that in the first
three months of 2021, nearly $200 million was spent for this sector. The
main reason for this explosion was that it became a trend in digital
collections.
Environmental Impact of NFT
The increase in NFT transactions caused environmental factors to be included among the critical
approaches . The computational processes associated with PoW (Proof
of Labor) blockchains used for NFTs require high energy and cause
global warming to increase. The carbon emission rates produced by the
energy needed to maintain blockchains are forcing those in the NFT market to
rethink their carbon footprints.
What is NFT? What does it mean?
NFT simply means a unit of data stored in ledgers, called a
blockchain, that confirms that a digital file is unique ,
regardless of type. It transforms digital artworks and collectibles into
assets that are both easy to trade and verifiable on the
blockchain.
This is such a software that; he scans the work of art or
the asset and can tell that it is unique, inimitable. Digital work (sound,
visual, video, etc.) is registered using blockchain technology and becomes a
token.
Examples of assets that can be NFTs and can be counted as NFTs
are: Any video, tweet, artwork, picture, website, posts we create on social
media, stories...
All these works, whose common feature is that they are digital
assets, can turn into an
NFT if they meet the necessary conditions.
First, let's briefly look at what blockchain and token are.
What is Blockchain?
Blockchain, or blockchain, provides a kind of notary service and functions
like a data recording tool. From whom to whom the digital documents
are sent and their signature is recorded in this system. Thus,
a document is created that is certified by other people who follow it. A
system that is decentralized and not under the aegis of any person or
institution . It is formed under the supervision of all
stakeholders.
The block chain is formed as a result of recording the data
encrypted with hash codes sequentially by millions of computers
connected to this chain system. In other words, it is not possible to
change the information on the blockchain unless all the computers connected to
the system are captured. In this way, the integrity of the chain is
guaranteed.
What Does Blockchain Technology Do?
No matter how many copies of this work, we can identify the
producer and current owner of the work, since it is registered on the
blockchain. One of the beautiful aspects of blockchain technology is that
the registration of the work cannot be manipulated by anyone. The
information recorded in this chain is recorded on millions of computers at the
same time, and it cannot be changed.
How Blockchain Works
When imagining Blockchain, think of a book. There are
millions of this book, and each one is an exact copy of this
book. Information added to this book is automatically added to other
books. At the same time, since the information in this book is approved
by everyone, it becomes impossible to doubt about it.
In order for a malicious person to make a change in this book,
he must capture all the books, update them and redistribute them. Because
if there is a book that contains different data from the others, it becomes
inaccurate and unimportant.
And the blockchain is exactly that book. It is formed by
detailed mathematical operations and deciphering the hash code in the digital
environment. Simultaneously, new data is added to the chain by millions of
users, and this information is processed in all copies at the same time.
This process is carried out with very powerful
computers. At the same time , people called miners also
support this system with powerful computers. In return, they receive
various amounts of cryptocurrency rewards per registration.
This system enables the recording of national and international
contracts, official transactions, important data and money exchanges.
What is Token?
Tokens are digital assets that do not have their own chain or
are dependent on a chain, expressed as tokens. Tokens have a unit
value. This value can be a game item, coin or digital
certificate. Thus, it can be sold and bought within the blockchain it is
connected to.
Today, digital artifacts can be certified and recorded on the
blockchain with the logic of tokens, for a cryptocurrency that is paid as a
commission. Exactly, these tokens are called NFTs because there is no
possibility to change them.
Properties of NFTs
·
After these
explanations, we can say that NFT is actually a cryptocurrency
. But the money mentioned here is different from the meaning we
know. Any asset of value can be used as money here. Unlike
cryptocurrencies like Bitcoin, they are not interchangeable, meaning
they are not interchangeable.
How Is NFT Different From Digital Currency?
The difference between NFT and digital money; designing
each NFT to be different from each other . Thus, NFTs
cannot be changed and become original. They cannot be transferred or
copied without the permission of the owner.
·
Another definition of
NFT that combines new technology with art is; in the form of "the
reflection of an asset in the digital world that could have a collection value
under normal circumstances" .
Are NFT and Copyright the Same Thing? What
is the difference?
A person can sell an NFT that includes their work, but when the
owner of that NFT changes, the new owner does not receive the copyrights. So
the first owner can generate more NFTs of the same work. In
summary; NFT proves ownership apart from copyright.
·
At
the same time , everyone has access to copies of the original file . The copy of the original NFT
file is not accessible only to the owner of the NFT. So you can see an NFT
file, but you need an inspection on the blockchain to prove you own it or
produce it.
Why do people buy NFT?
·
You can think of NFT
versions of artworks as signed items . One-of-a-kind and
one-of-a-kind. Even if a copy of the same table is signed the same, they
cannot be identical because there are many differences such as the time and place
of the signature.
·
Each NFT has a
specific area. For example, the asset purchased for one game cannot be
used in another game.
·
NFTs cannot be
replicated or fragmented. There is no deletion or alteration, and the
authenticity of each product can be tracked and proven transparently.
·
NFT's value lies in
its uniqueness. So if you buy an NFT, you can be confident that you
have a digital presence that is unmatched by anyone else . You
can imagine owning an NFT like getting an original code in the digital medium.
·
NFTs are
purely digital assets. Just as cryptocurrencies such as bitcoin
have a monetary equivalent, NFTs also have a digital counterpart. These
can be entities with many different qualities, such as a painting, a poem, or a
work of art, as we mentioned above.
·
Unlike crypto assets,
NFTs are immutable and unique. Each of them has different
characteristics and it is not possible for two entities to be
equivalent. You can think of it like a game ticket. Two
tickets cannot be awarded to the same seat at the same time in a
match. Or, it is not possible to change two tickets so that the viewing
angle, seat number, date and teams to be followed are the same.
·
Similar to trading
cards, NFTs can be accumulated as collectibles.
How is NFT Formed?
The formation process of NFTs is as follows:
1. First , cryptographic hash sequence records are created. These
are a set of characters that prove a dataset is unique. These records are
then sequenced into previous records, thus forming a chain of identifiable data
blocks.
2. Thanks to this cryptographic transaction process, a digital
signature is created and NFT ownership can be traced with this
signature. This ensures that each digital file is authenticated.
NFT is mostly created with the ERC-721 standard, which is an
Ethereum-compatible code created by CryptoKitties developers . Apart from
this, there is another newly developed standard; it's also ERC-1155. The
advantage of the new standard is that it offers the opportunity to work
together with new opportunities. Thus, blockchains of NFTs, which are
unique and original assets, become compatible with each other and can be
transferred between different applications quickly and easily.
Most NFTs are part of the Ethereum blockchain. But other
blockchains can also implement their own NFT versions.
What Does NFT Do?
NFT prevents the making and reproduction of counterfeit
products. It ensures that all information about the authenticity of a
digital asset is obtained, from the manufacturer to the previous owner.
For example, music can be shared from person to person, and this
can be done for free. But no copyright is given to the artist for
this. But music classified as NFT does away with the copyright
issue.
The digital artifact recorded on a blockchain can be turned into
NFT and kept in a wallet like a digital currency . Or it
can be sent to someone else and sold.
Where is NFT Used?
You can use NFTs in:
·
Games
·
digital art
·
CryptoKitties universe
·
Different other
applications
How is NFT Used? How to Get NFT?
It is possible to buy and sell NFTs from markets such as
SuperRare, Nifty Gateway and OpenSea. When you want to keep your own NFT
or buy a new NFT, you can use applications like Trust Wallet . In
this way, your NFT and other blockchain tokens you own can be located on a
single and specific address.
How is NFT Made?
In order to do NFT, you need to have a digital wallet . You
can create an NFT market link by purchasing some Ethereum, so you can convert
any file you want into an NFT file.
To convert a virtual artifact to NFT, you must save the
artifact on the blockchain network. This transaction is mostly carried
out on the Ethereum network. You must then log into the NFT market for
the product you want to convert to NFT. Then you have to upload the file
called "NFT printing".
The next step is to determine the unchangeable parameters of the NFT to be
loaded . You should determine the features such as how many of
this NFT will be produced and how much profit share will be received from the
next sale. After paying the Ethereum transaction network fee, your NFT is
produced.
There are websites that are used to create NFTs for this process
and are called NFT marketplaces. Thanks to the sites, you can create your
own NFTs and sell them to the collectors here.
NFT Sites, Where to Buy NFT?
There are many collectors on Rarible.com, and you can sell your
NFT works to these people for a fee you specify. At the same time, you can
create as many copies of each of your works as you want.
mintable.com
It is necessary to pay a commission (Gas Fee) to block an NFT to
the Ethereum blockchain. But there are also new marketplaces that offer
free services. Mintable.com is one of them.
What is Opensea?
Opensea is an NFT market like any other. It was established
in 2017. Here, buyers can create NFTs, sell directly or auction for
free. As of April 2021, more than 20 million assets are available on
OpenSea. In January 2022, it was $3.3 billion. It also has its own
mobile app for Android and iOS.
How To Make Money With NFT?
By converting digital artworks you create, a photograph you
take, a picture you draw or a song you compose to NFT, you can sell them in
global markets. NFT sites often have collectors waiting for new
items. These can get your NFTs at the price you quote.
Why Invest in NFTs?
·
Some expensive NFTs
are profiled on their social media profiles as a sign of wealth .
·
At the same time, many
people buy NFT in order to be a part of this online community.
·
Owning certain NFTs
gives those people access to exclusive content and live
events .
·
Digital investors are
also using the NFT market to make huge amounts of money in a short
time. Today, business models in many industries are being rebuilt to
include NFT trading.
·
NFTs can be traded
multiple times. However, royalties are paid to the original owner of the
asset in every sale transaction. Since it has full traceability, it can be
traced from the first to the last owner. Thus, each time NFT changes
hands, the artist can receive either 10% or 50% royalties and earn a profit.
NFT Examples
Everydays - The First 5000 Days
·
One of the pioneers in
introducing NFT technology, digital artist Beeple is one of
the most well-known foreign examples of NFT. Beeple's (Mike Winkelmann)
NFT work is a combination of many works that belong to
him. Winkelmann 's digital artwork "Everydays -
The First 5000 Days" sold for US$69.3 million in 2021. This was
the highest value NFT sale to date.
Football Boots and Jerseys of the Future
·
The most well-known of
the domestic NFT examples is the "Future Football Boot and
Jersey" designed by Mesut Özil and sold with NFT .
·
The NFT market
features art collections like Bored Ape Yacht Club, Cryptopunks, and Cool
Cats. Each of these is limited to 10,000 digital artworks. People can
also collect in the NFT industry. In fact, in February of 2021, a LeBron
James dunk NFT card sold for $208,000.
·
NFTs can also be used
to represent in-game assets. Assets can be bought and sold without the
permission of the game developer. For example, in 2021, Axie Infinity sold
$1.5 million in a single sale for its digital titles.
·
Musicians can also
feature their work on blockchains, via NFTs. Movies can also be printed as
NFTs, but due to their length and size, they can be difficult to store on
blockchains.
NFT Project Examples
In addition to NFT-related trading, there are also project
examples.
CryptoCrystal
CryptoCrystal is actually a crypto mining game. The
mining you can see in the game is generally in the style of Bitcoin and
Ethereum. In the game, users get coins called pickaxes from the company
and produce crystals.
HyperDragons
HyperDragons is also a game, but there are little creatures
here. This game interacts with projects belonging to other teams and
consists of three parts: collecting, producing, consuming. The game also
features the business model of collectible NFT .
CryptoVoxels
I'm Nolan, a game developer. When he realized the impact of
blockchain on user experiences, he attempted to create a digital world for
these users. CryptoVoxels is played with virtual reality glasses and
some special materials can be sold together with land construction in the
game.
rarible
Rarible is a platform whose purpose is to bring art
lovers and artists together . Secured by blockchain
technology. Thanks to Rarible, you can search for buyers for your digital
collections and sell them.
Who Can Do NFT?
Anyone can do NFT. You can make, sell and buy as many NFTs as you want as long as
you have a digital wallet and register the artifact on the blockchain.
IMPORTANT NOTE: THE INFORMATION WE SHARE HERE IS GENERAL AND IS NOT INVESTMENT CONSULTANCY.
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