NFTs, Explained for People Who Still Don’t Get It

0
124
Chasing the rainbow by Arya Mularama

“Chasing Rainbows”, NFT artwork by Arya Mularama. Image: Arya Mularama

Even if you’ve lived under a rock since the beginning of the pandemic, you’ve probably heard a chat about non-fungible tokens (NFTs). It’s hard to ignore hype when someone can take an unpretentious selfie and make a million dollars.

In addition, it is almost impossible to ignore the skepticism and ardent criticism surrounding emerging products such as NFT theft (also called copy minting), NFT fraud, and environmental costs of blockchain operation.

However, even if you already know that an NFT exists, you are more likely to not know what the NFT really is.

It can be pretty scary to delve into this new world without prior knowledge, so we hired an expert to break things down like a kid.

David Tng is responsible for the growth of TZAPAC, the Asia-based ecosystem adoption arm of the Tezos blockchain. This basically means helping people enter the world of NFTs. Below are his answers to questions about NFTs.

SWEY # 088 by Sarisa Kojima.jpg

Sari Kojima’s NFT artwork “SWEY # 088”.Image: Sarisa Kojima

Simply put, what is an NFT?

I think the easiest way to describe an NFT is to use it as an autographed poster for your favorite artist. For example, you like Madonna and she created a poster for her latest album. She has just published 100 copies of this poster with her signature, all serialized. Therefore, if you buy an NFT, you will buy one of these 100 copies. Of course, you can always download one copy on the Internet. But it’s not her signature, nor is it serial numbered. You are not buying the copyright for her artwork, you are buying a copy of what the artist has signed.

NFTs are unique digital objects with their own traceable history, each object having a record on the blockchain. Going back to the poster example, you can see who was the past owner of each copy, and that it was originally created by Madonna.

In some cases, there is an NFT that was previously owned by another artist or another star, “Hey, this NFT is unique. It has a traceable history. You can see that it is also owned by other celebrities. Therefore, it brings more value. Some people like that kind of charm.

What is a blockchain?

I see it as a general record book that anyone can see. Anyone can add it to the record. Again, it’s decentralized, so it’s not just one person holding a book.

What is the type of NFT?

NFTs come in many forms, but usually represent digital ownership.

The most famous type of NFT is provided in the form of a copy of the artwork. When looking at NFTs of artwork, they usually make little sense other than buying artwork that can be viewed and said “I own one of 100 copies of this artwork”. There is none. You could also create a virtual gallery in the Metaverse to showcase NFT art, but it’s a more entertaining and engaging experience that doesn’t need to be monetized.

However, NFTs may also be provided in the form of digital plots of land in the Metaverse. Alternatively, it can be in the form of an in-game asset such as a dedicated skin.

Next, there are NFT collections that allow access to membership clubs such as the IRL Country Club. A famous example is the boring Ape Yacht Club, which boasts members such as Jimmy Fallon, JJ Lynn, and Post Malone.

Recall, No.7 by CSLIM.png

NFT artwork “RECALL, No.7” by CSLIM. Image: CSLIM

Who can create an NFT?

Anyone can create an NFT. If you want to create your own NFT, there are various platforms such as objkt.com and Rarible. The most famous is OpenSea. There are many marketplaces where anyone can create their own NFT.

However, I think there is a misconception that if you create an NFT, you need to sell it. Not really. It may only be for yourself to admit that you have created the artwork and cast it. It’s just evidence and documentation.

Why do people buy NFTs?

Therefore, if you are looking at NFT artwork, some people may buy it because they are enjoying the work. Or maybe they are supporting an artist they admire. As in the traditional non-blockchain-based world, some speculators buy NFT art as an investment.

If you buy virtual land in the Metaverse, you can build your experience on it and organize your virtual events.

For collectibles (membership clubs such as the Bored Ape Yacht Club), not only will you be able to join a well-known community with celebrities, but you will also be allowed access to exclusive concerts and exclusive clothing drops. There are also advantages.

Can I buy NFTs only in cryptocurrencies?

It depends on the market. Some marketplaces only trade in cryptocurrencies, but some marketplaces accept credit cards. It really depends on the platform they are printing their artwork on and where they sell their artwork.

Hashed city No.36 by Yazid.png

“Hashed Cities No.36” by artist Yazid.Image: Yazid

Are all NFTs expensive?

No, it doesn’t really have to be. Take NFT artwork as an example. They can cost a million dollars-and we definitely saw these super-high prices in the news-but there’s also a lot of artwork that sells like $ 10. We often see this on the Tezos blockchain. Some artists enjoy creating artwork and believe it needs to be accessible to everyone. There is a very wide range of NFTs and a wide range of prices.

What does NFT mean for artists?

Another aspect of NFT art is its innovation. I see many artists exploring digital art (AI art, VR art, generative art, etc.). They produce digital works such as videos that cannot actually be printed as physical works.

Previously, if you were a digital artist, you created your work and posted it on Instagram so that everyone could see it, but how do you make money from it? You will need to find another source of income. NFTs allow these artists to sell their artwork with a certain number of digital signatures.

This interview has been edited for clarity and length.

Follow Koh Ewe on Instagram.

LEAVE A REPLY

Please enter your comment!
Please enter your name here