What is an NFT?
NFT stands for non-fungible token, but what does that mean? And more importantly, should you care? The second question begs me to ask if you care about new trends in technology, currencies and collectables. Do you want to be up to speed with pop culture? Many of us just don’t care, and if that is you, I give you permission to stop reading. However, if you’ve been hearing about the growing popularity of NFTs in cyberspace and wonder what it’s all about, continue reading as I will simplify it all for you.
Fungible and Non-Fungible
Fungible
The F in NFT is for ‘fungible.’ This refers to something that is interchangeable with something identical to it. They both have the same perceived or agreed upon value. The best example is a dollar bill, that can be exchanged for 100 pennies, 4 quarters or even for another dollar bill.
Non-Fungible
The N is for ‘non,’ so something non-fungible is not identical to anything, it’s unique. It’s one of a kind or rare as there is only one. It’s something others may want to collect, and this will enhance its valuable. The value of something non-fungible is provable by what people are willing to pay/trade for it.
Tokens, Minting and Gas
The process for putting these tokens in cyberspace, is called ‘minting.’ There are websites dedicated to the whole NFT process including their minting, valuing, and trading/selling. These websites, referred to as NFT marketplaces, all offer super easy-to-follow screens so anyone can easily process NFT transactions. They charge a processing fee called ‘gas,’ a one-time charge, when an NFT is minted. Some marketplaces charge more than others, depending on the exposure they provide, the value you initially put on your NFT, and if you want a fee whenever it’s traded. The gas charge does make sense as once an NFT is minted, it’s there forever in cyberspace.
Crypto Wallet
To pay for the minting of your own unique tokens, and/or to acquire any, you need to use cryptocurrency from your crypto wallet. MetaMask is a popular online crypto wallet. It’s easy to set up an account as you only need to enter a name, email and password. You then need to transfer money into your account to buy/convert to cryptocurrency. Once you have this currency in your wallet, you can spend it. You can’t use your ATM or credit cards as they don’t deal in crypto currency. One day they may, but not yet.
Have I lost you? Yes, it sounds crazy to pay for an image that is only available virtually and pay for it with money that is also only virtual. You can’t hold your image, nor display it on your coffee table. But if you own the image own its value in crypto currency and it is your image to trade, to keep, to collect, again increasing your crypto currency.
Crypto currency may be virtual, but initially you paid for it with a real currency from your bank or credit card, or maybe you started it virtually, by trading something for the virtual transfer of crypto currency to your crypto-wallet account. Your crypto currency can increase in value as you trade in the cyber marketplace. You can even convert it back to hard cash. Keeping that in mind may help you understand that even though crypto currency and NFTs are virtual, they do have convertible value.
Exploring the NFT Marketplace
Anyone can go to an NFT marketplace website and browse the NTFs and their stories. There are hundreds of thousands available, including artwork, company logos, famous landmarks, cartoon characters, symbols, and just about anything else you can think of. There are no boundaries. It’s really astonishing the value of some NFTs. Many are continually traded, and their value keeps growing. There is a famous early NFT that initially sold for an equivalent of around $15, that is now valued at $450K. An unbelievable story, and there are lot more similar NFT stories to marvel at.
NFT Image
A NFT image can be designed from a photo, and the photo can be duplicated into a set with a variety of colours and features to differentiate it from the original image. An image can be minted into one NFT, or a set of images can be minted into a collection. You determine the value of your NFTs when you mint them and can even value some in a collection higher than others. The value of an NFT, and of a collection, increases as it is traded. One very knowledgeable gentleman told me to make sure I keep a few, or even half, of the NFTs in my collection when I mint them. He said this would be a smart investment in case the value of the collection increases over time. You see if I sell them all, and their value grows in the future, I will only have bragging rights of being the designer, and others will be benefiting, growing their crypto currency from my design.
Having Fun with NFTs
I’m jumping on the NFT bandwagon, not letting my age get in the way. Right now, I’m having a lot of fun working on my Happy Cat NFT Collection by designing a set of 18 images. They are based on my Happy Cat logo, the cartoon-like cat face I’ve been drawing since I was a young girl. Soon I’ll mint them on OpenSea, a popular NFT marketplace. One day I may promote them, trying to get some traded, but not yet. I’m just doing it for fun and will keep checking out the growing number of NFTs available and reading their stories.
Give it a try yourself. Go online and check out OpenSea, Rarible or Binance, all popular NFT marketplaces. See for yourself what’s going on with NFTs and you’ll be amazed at what you find.
It’s all good!
This article was also published in Sixty and Me.