www.banklesstimes.com
HomeWhat are NFTs?

What Are NFTs?

Last updated 26th Sep 2022
Disclosure

Why Are NFTs Important?

NFTs are important because they are a novel technology with a plethora of potential use cases. They offer a way of providing digital proof of ownership and can even contain things like rights to physical assets or access to exclusive content.

What Is the Purpose of NFTs?

The purpose of an NFT is to represent an asset, whether that is online or offline. They are cryptographic tokens that are stored on the blockchain and cannot be copied, forged, or replaced. Some secondary purposes are:

  • Staking

  • Identity representation and verification

  • Real estate transactions

  • Supply chain management

  • Gaming

What Are NFTs Backed By?

NFTs are backed by the blockchain that they exist on. Most NFTs are represented as an ERC-721 token which is the standard on the Ethereum Network.

How Do NFTs Work?

NFTs are a representation of a digital or non-digital asset on a blockchain. Let’s use how an NFT found on the Ethereum Network works as an example:

NFTs here are represented as an ERC-721 token which is different from the ERC-20. ERC-721 tokens are unique in the way they are not divisible by one another and are therefore unique in content and value. The NFT gives the ability to assign assets to an address on the Ethereum Network or to claim ownership of them. All of this is fully trackable on the Ethereum ledger that stores the history of all transactions.

Are NFTs Worth Buying?

This depends on what NFT it is you’re buying; like cryptocurrencies, NFTs are extremely risky assets. Most of these assets are collectibles or pieces of art whose value is highly volatile and difficult to objectively quantify.

What Are NFT Tokens?

NFT stands for a non-fungible token; if something is non-fungible it means that it cannot be replaced by another item identical to it or it is not mutually interchangeable. This is actually a legal term that represents the state of the property, and that's exactly what an NFT is a digital property.

What Is Minting an NFT?

Minting is the applicable technical term that describes the creation of a new NFT and its merge onto the blockchain. The NTF minting process represents the transition of digital files and data being converted into tradable crypto collections or other digital assets that are stored and tracked on the blockchain.

Can Anyone Make (Mint) an NFT?

Yes, anyone can mint an NFT; however you cannot mint an NFT anywhere, you will need a specific interface to facilitate your purchase.

Why Are NFTs Controversial?

There are three core reasons that NFTs remain a controversial type of asset. They are currently highly resource-consuming, they arguably disincentivize ‘true’ artists and they are often linked with scams.

What Is the Difference Between NFTs and DeFi?

DeFi, or decentralized finance, is the offer of financial products and services traditionally only offered by centralized banks, businesses, and financial institutions. It is decentralized and guaranteed by the combination of smart contracts (security of transaction) and liquidity pools (security of funds). NFTs are just a tradable asset.

What Is the Difference Between NFTs and the Metaverse?

The Metaverse is a virtual realm or network that is defined by connectivity, experience, and ownership. It's a place where you can interact with friends, family, and colleagues, where you can buy digital assets (like NFTs) and experience a different type of reality. NFTs are just a tradable asset.

How to Know What NFTs Are Worth Buying?

It can be worth buying an NFT if it has some kind of real-world tangible value; for example, some NFTs contain prizes, rights, or products that they represent in the real world. This is the type of asset that has more of a guarantee of retaining value. Other than that, it's an asset that you see gaining traction on the market and that you think will increase in value.

What Are The Most Popular NFTs In 2022?

What Are the Best NFTs to Buy Right Now?

  1. Bored Ape Yacht Club

  2. Axies

  3. CryptoPunks

  4. Decentraland

  5. FlyFish Club

What Are the Biggest and Most Successful NFTs?

  1. WIN NFT HORSE

  2. Bored Ape Yacht Club

  3. Mutant Ape Yacht Club

What Are the Most Expensive NFTs?

  1. Beeple’s Everydays: The First 5000 Days

  2. Julian Assange and Pak’s Clock

  3. Beeple’s Human One

What Are the Rarest NFTs?

  1. Pak’s The Merge

  2. CryptoPunks

  3. Bored Apes Collections

What Are the Top Selling NFTs?

  1. Bored Ape Yacht Club

  2. CryptoPunks

  3. The Sandbox

What Are the Top Upcoming NFTs?

  1. Lucky Block NFTs: The Platinum Rollers Club

  2. AdRunner

  3. Wagmi World

What Are the Different Types of NFTs?

What Are Airdrop NFTs?

Airdrop NFTs involve directly transferring funds to random people’s wallets. So, for example, this could be for entering a prize draw or performing some kind of activity.

What Are Collectible NFTs?

Collectible NFTs simply describe a collectible that is found on the blockchain. NFT collectibles are the same as regular collectibles - unique, rare, and prized products that usually come in a set.

We can define NFT collectibles in three core categories:

  1. Art collectibles

  2. Sports collectibles

  3. Gaming collectibles

What Are Dynamic NFTs?

Dynamic NFTs are a type of NFT that uses smart contract technology to make it react and evolve with real-world events. Imagine an event happening in real life that then triggers a clause in a contract (the code in a smart contract) that then changes the makeup of an NFT or creates a new effect like a minting.

What Are Fractional NFTs?

Fractional NFTs allow people to purchase a small part of a larger, and more expensive, NFT. Each individual investment made by each user is proportionately converted into an ERC-20 representation of that value. So, users then technically own an ERC-20 representation of a part of that NFT but collectively have ownership of the entire asset.

What Are Utility NFTs?

Utility NFTs are fast becoming the norm in the NFT space. This term defines an NFT that is more than a collectible and that has a specific function stored inside it. This could be a range of different things like:

  • Access to a restricted community

  • Access to content

  • Online financial and community benefits

  • Real-world products

  • Rights to something

  • Meetups

What Are Whitelisted NFTs?

Whitelisting refers to when a select group of people is put on an exclusive list that gives them first rights to buy an NFT or cryptocurrency. Usually, this will be because someone is deeply involved in the development of a project or just a loyal supporter of it.

What Are Metaverse NFTs?

A metaverse NFT is an NFT that has functionality or utility within the Metaverse. For example, maybe it represents a character you can use in a game which is now a very common trend. Also, another example of a meta-verse NFT would be digital land.

What Are NFTs Made Of?

What Blockchain Are NFTs On?

NFTs can be built and created on any blockchain that has smart contract functionality. Most are on Ethereum but also these platforms support NFTs too:

What Language Are NFTs Coded In?

NFTs are minted through the creation of smart contracts. If we take the Ethereum network as our example, an ERC-721 token is what needs to be created. The language that is used to code this is the Solidity Programming Language which can also be used on other blockchains. To create an NFT the Truffle framework, Javascript and HTML/CSS would be used alongside Solidity.

What Programs Are Used to Make NFTs?

Any of the following can be used to create an NFT:

  • Adobe Photoshop

  • Illustrator

  • NFT Creator

  • Pixel Chain

  • GoArt

What Are Cardano NFTs?

Cardano NFTs, sometimes dubbed CNFTs, refer to an NFT that has been built using the Cardano Network rather than the Ethereum Network.

What Are Shiba NFTs?

Shiba NFTs refer to the collection of NFTs created by the Shiba Inu network using the ShibanToken marketplace. The first 10,000 large collections were released in late 2021 and sold out within minutes. They are rumored to be for an upcoming game the network is creating.

What Are Solana NFTs?

Solana NFTs are NFTs created on the Solana blockchain.

How to Buy and Sell NFTs?

What Websites and Platforms Are NFTs On?

Here are some of the most popular:

  • OpenSea

  • Axie Infinity

  • Nifty Gateway

  • Rarible

  • Binance NFT

What NFTs Are on Binance?

It offers a wide range of virtual land, art pieces, in-game items, and more.

What NFTs Are on Coinbase?

Currently, there are no NFTs available on the Coinbase marketplace.

What NFTs Are on Crypto.com?

Crypto.com supports all of the most popular NFTs.

What Coins Are Used to Buy NFTs?

The coins that are used to buy NFTs depend on which platform you use. Almost always Ether will be accepted.

What Are the Cheapest NFTs to Buy in 2022?

  1. Wagmi World

  2. The Sandbox

  3. Decentraland

How to Sell NFTs?

Some of the most popular places to sell NFTs are:

  • Open Sea

  • Binance NFT marketplace

  • Nifty Gateway

How to Make Money With NFTs?

What Are Royalties in NFTs?

NFT royalties are when a creator designs a collection of NFTs and they dictate that 10% of all secondary sales after minting will go to the creator. This can also be applied to those who first mint a specific NFT.

Are There NFTs That Are Worth Millions?

This is difficult to say but it is when a collection has the combination of:

  • Hype

  • Rarity

  • Fashionability

  • Utility

What Are The Benefits And Risks Of Buying NFTs?

What Are the Benefits of NFTs?

NFTs have a wide range of benefits such as:

  • A way to diversify your portfolio

  • Fractionalization

  • Security of asset

  • Security of network (Blockchain)

Why Are NFTs Bad?

Here are some of the most important negatives of NFTs:

  • Scams and fraud

  • Volatility

  • Environmental impact

Why Are NFTs Bad for the Environment?

NFTs are not directly bad for the environment but rather the network that they are using is. Ethereum’s Proof-of-Work system currently has an incredibly large carbon footprint.

What Are the Risks of NFTs?

The main risks of NFTs are:

  • Scams and fraud

  • Volatility

What Are NFTs Used For?

What Are NFTs in Gaming?

Decentralized games now let users play with characters that can be represented as an NFT that can be bought, traded, and upgraded in-game.

What Are Movie NFTs?

Movies not seen by anyone else in the form of an NFT that can be bought and traded.

What Are NFTs in Music?

Exclusive songs, content, or artist interaction that is acquired through the purchase of an NFT.

What Are NFTs in Sports?

Sports moments in video form, trading card collectibles, or exclusive digital art that can be traded on-chain.

What Are Digital Art and Picture NFTs?

Digital art is a tradable asset on the blockchain. This can be in pictures, video, or audio form.

What Are NFT Domains?

Domain addresses specifically for cryptocurrency that can be owned via the ownership of a specific NFT.

Can You Buy Physical Items As NFTs?

Yes. Many NFTs now represent the ownership of a physical asset.

What Are Some Examples Of NFTs

What Are Some Well-Known Examples of NFTs?

  • Pak’s The Merge

  • CryptoPunks

  • Bored Ape Yacht Club

What Are The Top Nft Collections?

  • Bored Ape Yacht Club

  • Mutant Ape Yacht Club

  • CryptoPunks

  • VeeFriends

  • Cool Cats

What Companies Are Creating NFTs?

Big Brother

The Big Brother Buddy collection is an opportunity for super fans to buy collectibles of their favorite stars.

Available from: https://bigbrotherbuddy.com/

Coca Cola

The Coca-Cola NFT was an extremely successful campaign that raised money for the Special Olympics. The first Coca-Cola NFT raised almost $600,000 at auction.

Available from: https://opensea.io/assets/0x455f04c9c54fffa699e9f6b1271e857a1f2bddfa/1

DC

DC partnered with Palm studios to release their first set of NFTs. These fandome NFTs were actually released for free originally.

Available from: https://opensea.io/collection/nftdccomicsfandome2021

Dead by Daylight

The Hellraiser NFT collection by survival game Dead by Daylight was hotly criticized by its fan base, mostly because it was a standalone asset.

Disney

Disney stepped into the NFT space with their new collection Disney Mickey and Friends NFT collection.

To buy one of these you will need to download the VeVe app: https://www.veve.me/

DraftKings

Draftkings has teamed up with some NFL players to make the Gamified Collection.

You can only buy this NFT from the USA and have to use the DraftKings website: https://www.draftkings.com/marketplace-welcome

Funko Pop

The Funko Pop collection is an affordable way to own digital versions of popular figures.

You can only purchase them on the Funko website: https://www.funko.com/blog/article/funko-digital-pops-everything-you-need-to-know

NBA

The NBA has been a good example of the successful use of NFTs. They have a few collections such as 76ers Legacy Collection and NBA Top Shot. These are very similar to sports trading card collectibles.

Available from: https://nbatopshot.com/ and https://www.nba.com/sixers/nft

Spotify

Spotify is still heavily rumored to start linking its platform with NFTs but as of yet nothing concrete has happened; it is said that it will be used to help raise money for artists.

TikTok

TikTok has launched its first creator-led NFT collection which digitalises some of the platform’s most famous moments; it is said this is to help promote and support influencers.

Available from: https://tiktok.immutable.com/

Ubisoft

The Ubisoft Digits collection is the first set of NFTs available on Ubisoft's eco-friendly NFT platform, Ubisoft Quartz. It looks to solve the issue of sustainability and challenge NFT gaming by using NFT playable assets in its traditional gaming.

Available from: https://quartz.ubisoft.com/

UFC

The UFC Strike collection is a similar concept to the NBA’s. It offers collectibles in the form of cards and video clips. They have a wide range of different moments from UFC history up for grabs.

Available from: https://www.ufcstrike.com/

WWE

There is a huge range of WWE NFTs available to buy on OpenSea. They range from specific fighters to collectible cards.

Available from: https://opensea.io/collection/wwe-official

FAQs

What Are Hidden NFTs on OpenSea?
Are NFTs a Scam?
Are Non-Fungible Tokens (NFTs) Safe?
What Are POAPs (Proof of Attendance Protocol)?
What Resolution Are NFTs?
What Format Do NFTs Come In?
What Are Gas Prices for NFTs?
What Are Good NFTs To Invest In?
How To Know What NFTs Are Good?
What Are the Most Profitable NFTs?
What NFTs Are Celebrities Buying?
Are NFTs Mainstream Now?
Joshua Sherrard-Bewhay

Joshua Sherrard-Bewhay

Josh is a finance and Blockchain technical writer with experience in project design, consultancy and reporting. He is well-versed in white paper design, blog construction and freelance journalism. His academic credentials are in International Relations, Environmental Regulation and International Law. In his spare time he works as a sustainability analyst for a FinTech start-up Oxari and a private English tutor.