What Are NFTs?

Everyone is talking about them, but does anyone really know what they are?

by Kenneth Medford III

Though we went over some of the finer points of the NFT scams that were/are going on, I thought it was necessary to take a step back and figure out what even are NFTs.

Non-fungible Tokens

Thank you and goodnight! No. A non-fungible token simply means whatever digital media is created cannot be reproduced. Basically, it would be like if someone created the Mona Lisa and it truly could not be copied. 

The original creator may still own the copyright for your token and the right to recreate it so make sure you take note of any such legalities. The last thing you want is to tell all of Twitter you have the only [insert really cool thing here] and find out a week later so do a thousand other people. 

Yes, I know, it seems contradictory, but the fine line here is that you would own the ORIGINAL. I know, cool flex, but where’s the benefit? If it is something that is truly 1 of 1 then the potential resale value could be the same as a piece of physical fine art. If it is something of a limited set (say, an album that is only available for a month), you may find yourself in a position to have exclusive listening parties. All in all, understand the limits to your purchase BEFORE you spend your hard earned crypto.

Where Do I Find NFTs?

The majority of NFTs are on the Etherum blockchain (ETH), however some other blockchains allow for the creation of NFTs as well (Cardano (ADA) and Solana (SOL) for instance). 

More to the point, you can usually go directly through the seller’s website to purchase whatever NFT they may be selling and purchase it with whatever crypto represents the blockchain it originates from. In simpler terms, if the NFT you want is on Etherum’s blockchain, you have to use ETH to buy it. If it’s on Cardano’s blockchain, you have to use ADA to buy it and so on.

How Do I Buy NFTs?

OK. . .so. . .this can get a bit more confusing depending on who you’re dealing with (because this wasn’t already a nightmare of technomagic). Your available options are:

  1. Purchase directly from the creator/seller

This is the ideal situation. Make sure that you ask any relevant questions (like purchaser rights, owner rights, etc) BEFORE your purchase and this should be a straight forward exchange. 

  1. Use a NFT marketplace

The Ascent has an AWESOME list of the top NFT marketplaces and a quick breakdown on what to look for in a marketplace. One of the most important notes:

Some support a wide variety of tokens. Others are closed marketplaces and utilize a specific proprietary token. When opening an NFT marketplace account, be sure to fund your blockchain wallet with the right crypto or token required to participate in the site’s activity. 

Basically, if you stay ready, you won’t have to get ready. Make sure you have the right funds for the job and you’ll be able to purchase whatever you please.

  1. Auction sites

Yes, you absolutely can purchase NFTs from sites like eBay. You should note that, just like anything else on eBay or any other auction site, the scammers are out there. Purchase from verified accounts and, as noted in our NFT scammer article, do your due diligence. If you ever wanted to cyber stalk someone, this is definitely the time. 

What Uh. . .What Do I Do With NFTs?

So I’m sure after seeing people spend literal millions on these things, the questions becomes “what’s the point”? Well, that’s really up to you.

With NFTs you can:

  1. Hold on to it like a piece of art

As I mentioned before, the resale potential of NFTs can be pretty major. If you really believe you’re holding on to this generation’s Monet, by all means, hold on to it for dear life and watch its value grow. If your call is right, you could be looking at not just life changing money, but generational change. As a hip hop artist, I’d say you’d be in pretty good company with likes of Nas and Snoop betting on NFTs for their music.

  1. Flip it like a remodeled house

If you’re feeling less sure of the long term value of your NFT, you can turn around and sell it. Supply and demand are always the controlling factors when determining how well this approach will work, but if you gauge it right, there is definitely potential for profit. In a lot of cases, resale of NFTs will make you more money than the person who created it.

  1. Flex on everybody!

Hey, sometimes it’s just about bragging rights. Having a unique in-game item, a one of a kind display pic, or a song no one else can listen to might just be the endgame for you and that’s cool too. Depending on the terms for the NFT, you will most likely be able to do whatever you like with it for personal use, so go nuts. Not every NFT costs the GDP of a small country, so if it’s within your budget, YOLO.

Anything Else?

The best information I can try to instill in you before you go is, as with anything else in life, do your research before purchasing. Check out some of the basics of crypto and blockchain, look into any creator you plan to buy from, and make sure this is a move you can afford to make above all else. Like any physical item being purchased as an investment (art, property, etc), NFTs can bite you in the ass if you don’t know what you’re doing. They can also completely change the game for you and potentially your family. Be smart, never get into something you don’t understand, and if it seems too good to be true, it usually is. 

Related Reads:

How to Avoid Getting Scammed Buying NFTs

Ask the Money Coach

Top Finfluencers to Follow 2022

Where to Get Your Crypto News

Kenneth Medford III

Writer, rhymer, gamer: the easiest way to define the man known as Kenneth Medford. I’m a simple man who loves to learn and loves to help and I wander the digital world trying to find ways to sate my hunger for both. Basically, I’m Galactus but helpful.

Check out my other work here or reach out to me on LinkedIn.

More Stories
Nav.it’s Founder, CEO Erin Papworth on Building Ethical Tech
%d bloggers like this: