NFTS 101
What is an NFT?
"NFT" = "Non-Fungible Token."
A Non-Fungible Token represents rights to an unique and non-interchangeable digital item stored on a blockchain that you can purchase using a digital wallet. Meaning that the token can not be copied or replaced. This is achieved through blockchains that acts as a ledger for all purchasing movements. Every transaction is transparent. Each NFT is like an original piece of art or a series of numbered prints. NFTs can be anything from a photo, video, audio, and more. Allowing people to have ownership of something that has value and meaning to them and others. Those who hold ulta-rare NFTs may gain access to exclusive events, community spaces and real-world items.
What is a Smart Contract?
Smart contracts exist on the blockchain as a digital contract between the buyer, seller and future buyers written in lines of code. This code controls the execution of the terms, and the subsequent transactions are traceable and irreversible.
The benefit? Everything is tracked publicly on the blockchain to ensure the Creator is paid every time an NFT is bought or sold.
What can I do with a NFT?
Once you purchase an NFT, you are 100% the owner of that token. Your ownership of the NFT is recorded by the blockchain by associating the NFT with your wallet ID. Therefore, you can keep it, give it away or trade it with others, just like you would with a physical collectible. However, it’s important to read the license to understand what you can legally do with your NFT (including copyrights and trademarks). Often, the license provides the right to display the digital item for personal, non-commercial use or to transfer the NFT to a third-party on a secondary market.
What does it mean to mint an NFT?
If you were the original creator of an NFT, you must mint it before you can sell it or trade it. ‘Minting an NFT’ means uniquely publishing your token on the blockchain to make it purchasable. You must have a digital wallet in order to mint your NFT. For example, if you were using the Ethereum blockchain to mint your NFT, it will become a part of the public ledger, and once that happens you can not modify it.
What is a Blockchain Wallet and how do I get one?
A blockchain wallet is a cryptocurrency wallet that allows users to manage different kinds of cryptocurrencies such as Bitcoin and Ethereum. Each wallet has an unique wallet ID (referred to as a public key). Each NFT has a unique token ID. The blockchain records ownership of an NFT by associating its unique token ID with a unique wallet ID and storing that record on the blockchain.
There’s tons of digital wallets you can sign up for but MetaMask is one of the most popular crypto wallets out there today. You can download it as a browser extension (https://metamask.io/) or a mobile app. Once downloaded, look for the “Create a New Wallet” option, securely write down your seed phrase key, and set a device-specific password. Never share your password or passphrase to anyone!
A Guide to Commonly Used NFT Terms
- GM / GN Good morning / good night.
- Mint: First purchase of an NFT creating a block on the blockchain.
- WAGMI: We All Gonna Make it!
- NGMI: Not Gonna Make It!
- LFG: Let's F@$@ing Go! (Reminder: The F word is not allowed but LFG is okay to use.)
- FUD: Fear, Uncertainty and Doubt.
- FOMO: Fear of Missing Out.
- HODL: Hold On for Dear Life!
- DYOR: Do Your Own Research (but let's be kind to newcomers!)
- Bullish: Hopeful or confident something will be successful/expecting the price to go up. Bearish Opposite of Bullish.
- Floor: Price The lowest someone has listed an NFT from the collection.
- NFA: Not Financial Advice.