Non Fungible Token (NFTs): The Ultimate Guide

Non fungible tokens or NFTs are tokens that you use to represent ownership of unique, rare, and valuable items. They basically serve as a form of digital identity.

They are digital certificates to say that you own something physical or digital that exists on the blockchain, the technology that develops cryptos like Bitcoin.

NFTs let you tokenize things like artwork, videos, collectibles, airline points, in-game currencies, events tickets, domain names, or even physical assets like real estate.

By tokenizing non fungible assets, important details about the asset are digitized with the token.

With valuable assets like your property and car representable on the blockchain, you can use these physical items as collateral in decentralized loans.

This is possible because you own a physical item of value.

Cryptos and physical money are “fungible” meaning that they can be traded or swapped for one another and equal in value, but NFTs are different because each token has a digital signature that conforms to a different token standard called ERC-721, which makes it impossible for NFTs to be exchanged for or equal to one another hence non fungible.

How do NFTs work?

NFTs are different from cryptos like ETH or BTC in that each token is completely unique and is not divisible.

They are unique cryptographic tokens that exist on a blockchain and cannot be replicated.

Non fungible tokens give you the ability to assign or claim ownership of any rare digital piece as they are minted from digital objects as a representation of digital or physical asset.

For example, NFT can represent:

Digital arts

Video
Music
Pictures
GIFs
Collectibles

Real world items

Legal documents
Real estate
Verifiable credentials
Tokenized invoice
Digital identity verification
Ticket to physical events
Investments and collateral
Signatures
Deeds to your car and lots more.
Designer sneakers

An NFT can only have one owner at a time and ownership is managed through the uniqueID and metadata that no other token can copy because when someone creates or mints an NFT, they execute codes baked in smart contracts that conform to different token standards such as ERC-721.

This information is then added to the blockchain where the NFT is being managed.

The minting process begins from the creation of a new block to validating information, and recording information into the blockchain.

Non fungible token properties

Each token minted has a unique identifier that’s linked to one account and owner which can be verified by anyone
NFTs cannot be exchanged or swapped for one or another
They live on the blockchain and powered by smart contract

So if you own an NFT you can easily prove:

You own it. For example, proving you own an NFT is similar to you proving you have ETH in your account
No one can manipulate it
You can resell your NFT
Or hold it forever

And if you create an NFT, you can:

Prove you’re the creator
Decide scarcity for your NFT
And even earn royalties each time it’s sold.

Scarcity

As the creator of an NFT you get to determine the scarcity of your assets.

The intentional scarcity of the NFT matters, and it is up to the creator to make each NFTs completely unique to create scarcity and boost the price of the NFT.

Just as an organizer of a music event can choose how many tickets to sell, the creator of an NFTs can determine how many replicas exist.

Royalties

You can automatically get paid royalties whenever your NFTs are sold. Platforms like Zora support royalties for their artists.

Chapter 2

Non fungible token use cases

Some of the better developed use cases of NFTs that exist today are:

Digital content

The most relevant use case of NFTs today is in the digital content space.

NFTs force a new creator economy where creators don’t hand ownership of their contents to the platforms they use to publicize it, instead ownership is baked into the contents itself.

Now power has changed hands because of NFT, your funds now go directly to you when you sell your content and if the new owner sells the NFT, you can even automatically receive royalties.

Domain name

NFTs provide your domain with easier to remember names.

This works alike to a website domain name, making its IP address more valuable and memorable based on relevance and length.

Example of a domain name NFT is the Ethereum Name Service ENS.

The ENS uses NFTs to provide your Ethereum address with an easier to remember name like Vatalik.eth which means you could ask someone to send you ETH via Vitalik.eth rather than ox123456789……..

Your ENS name can:

Received NFTs and other cryptos
Store any arbitrary informations like Twitter handles and email addresses
Point to a decentralized website like ethereum.eth

Gaming items

NFTs have gained huge interest from game developers because NFTs can provide records of ownership for in-game-items, fuel in-game economies, and lots of benefits to the players.

A typical online game only allows the purchase of items for your character, but that’s it.

However if that item was an NFT you could get back your money by selling it when you’re done with the game.

Investments and collaterals

NFTs and DeFi (Decentralized Finance) both share the same infrastructure and work hand in hand to explore using NFTs as collateral.

There are DeFi applications that let you borrow money by using your NFT as collateral in place of a fungible token.

As an example:

Let’s say you bought a Bored Ape Yacht Club NFT a year ago at $2000, they can fetch $200k at today’s prices.

By putting your BAYC NFT as collateral, you can access a loan and if you don’t pay back your NFT will be used to repay the loan.

Proof of Attendance Protocol (POAPs)

For example, if you contribute to a decentralized autonomous organization (DAO) you can claim a POAP NFT, these are collectibles that prove that you take part in an event

Some crypto meetups and communities use proof of participation as a form of tickets to their events.

Fractional ownership

NFTs are more fractionized to provide liquidity thereby allowing an NFT creator to create ‘shares’ for your NFTs by giving Investors the opportunity to own a part of your NFT without buying all of it.

It is very possible that soon or later owing a fraction of an NFT will grant you access into a decentralized autonomous organization (DAO) because some DAOs are already operating based on this principle.

Decentralization autonomous organizations (DAOs) are internet native communities powered by the blockchain that allow you to work securely with anyone with a shared mission and treasury that no one can access without the approval of the group.

NFTs, DAOs, and fractionalized tokens are all developing at different speeds, it appears inevitably that despite their growing pains they will dramatically increase in popularity in the years to come because all their infrastructure exists and can work together because they all speak the blockchain language.

Physical items

Authenticity is the keyword for NFT because it can help with the authentication and verification process as each NFT is unique and can’t be modified after being created.

While most of you associate NFTs with big names like Bored Ape or the NBA topshot collectibles, NFTs can play a huge part in mundane areas like supply chain where blockchain technology can provide authenticity, certification insurances, and traceability.

Thanks to the blockchain technology, information attached to physical items and and their virtual assets can’t ever be tampered with, faked, or changed – providing a data trail that can be trusted.

Ultimately linking non fungible tokens to physical assets as one of the strongest use cases of NFTs and blockchain technology.

RTFKT studios a virtual sneaker powerhouse (recently acquired by Nike) allows owners of non fungible tokens to easily redeem physical footwear, they’ve also collaborated with other crypto creators to design a range of physical items.

Wenew an NFT platform selling “iconic” historical moments and cultural milestones, in addition to the digital token allows collectors receive a physical museum-quality screen that displays their NFT.

Chapter 3

My favorite Non fungible token lists / examples

Whatever side you’re on, you genuinely believe that NFTs are an exciting new way of proving ownership and you should get ideas from it since they’ve entered the public realm and it’s your responsibility to make an effort to understand this new phenomenon.

So, below are my 7 amazingly favorite and innovative examples of Non fungible tokens. Let’s discover what makes them unique.

#1: NFT Sport collectibles

NBA topshot is an NFT marketplace that allows users to buy, sell, and collect NBA NFTs that showcase important “Moments”.

#2: NFT fashion

Gap is an American worldwide accessories and clothing retailer and they’re the latest distributor to launch an NFT collection that comes with a physical hoodie.

#3: NFT real estate trading

Decentraland users can buy and sell digital real estate as NFTs while playing games within the virtual world.

#4: NFT virtual design objects

Argentina digital artist Andres Reisinger is one of the most talked about creators who thanks to the emergence of NFTs virtual works in art, design, and architecture have received immense attention.

Andres carved his exclusive niche in furniture, he sells furniture NFTs that can be used in virtual worlds like Decentraland.

#5. NFT domain

Unstoppable Domains is a blockchain startup onboarding the world onto the decentralized web by connecting Web2 to Web3 through the use of blockchain-based domain names and digital identities.

You can send, receive, and store hundreds of cryptocurrencies and NFTs with one simple Unstoppable name which is minted and allow you to replace complicated crypto addresses with a human readable designation enabling you to build decentralized websites with NFT domain names.

#6. NFT events & ticketing

Bam Ticketing is a platform that provides blockchain NFT ticketing for live events.

#7. NFT restaurant

Flyfish club (FFC) is a membership only private dining club where membership is purchased through NFT and owned by the token holder.

Holding the token will give you access to the private dining club, culinary, social and cultural experiences.

The new venture is stated to open in New York in the first half of 2023.

Chapter 4

Non fungible token art

NFT art is transforming the art market and setting new records.

For artists, NFTs have opened up a new way to earn money because it is a totally new way of categorizing digital artworks that enables designers to monetize their skill.

Because they’re digital assets that exist only in the digital universe, you can own it but you can’t touch it.

NFTs present an intriguing opportunity to automatically assume complete ownership, and authority over your digital artwork or file.

Below are the best trending NFT art

#1: Mars house

Artist Krista Kim’s Mars house is a digital house NFT, the virtual house was thoughtfully designed to create a zen and therapeutic atmosphere.

The house was designed in line with meditative design principles with the influx of digital life as an opportunity to promote well-being.

#2: Bored Ape Yacht Club (BAYC)

Bored Ape Yacht Club is pieces of unique digital collections of 10,000 Bored Ape NFTs that provide each member ownership of a unique Bored Ape character procedurally generated by an algorithm and access to a community.

The BAYC non fungible tokens acts as identity cards to an online club house built to look like a super cool dive bar and IRL private events.

Not only can Bored Ape owners resell their Bored Ape NFT for a profit, each NFT has excellent resale value.

As of 2022 sales of Bored Ape Yacht Club NFTs have added up to $1B with top celebrities like Justin Bieber, Madonna, and Paris Hilton purchasing these non fungible tokens.

#3. Doodles

Doodles art is a collection of 10,000 unique NFTs generated from hundreds of traits.

Some of the traits include background, body, face, and head.

Chapter 5

The best Non fungible token games

NFTs games are the future of online gaming, an avid gamer looking to capitalize on this trend can play and earn digital cash.

So If you’re looking for the list of best NFT games to play and earn crypto tokens check this out:

#1. Star Atlas

This blockchain-based space-themed NFT game is an astronomy-based play-to-earn game where users can explore space, trade NFTs of planets, stars, and other space items.

It is a multi-player metaverse game set in the distant future in the year 2, 620 and allows players travel at warp speed around the digital galaxy.

#2. My DeFi Pet

My DeFi is a blockchain play-to-earn NFT game where players can buy, sell, and trade virtual pets.

Players can customize their pet by creating unique NFTs of their pet by including features like color, head shape, and wings.

#3. Decentraland

Decentraland is an NFT play-to-earn crypto game in which users can buy plots of lands and create in-game avatars.

These plots of land have great resale value and can be traded with other players.

#4. Axie Infinity

Axie Infinity is the best game for Pokemon lovers, it is a blockchain-based NFT game borrowed heavily if not completely from the Pokemon game series with its own blockchain twists.

Much like Decentraland, Axie Infinity structures the Axies as in-game plots of land, and allows users to breed Axies to obtain NFTs that can be traded on the Axie Infinity marketplace.

#5. Stepn

Stepn is a web3 move-to-earn lifestyle app with fun games and social elements. Users equipped with NFT sneakers move outdoors to earn tokens and NFT rewards.

In Stepn your steps are worth more than you can think because the NFT game requires you to literally move from place to place for any progression.

#6. Orbem Wars

Orbem Wars is a play-to-earn crypto game and metaverse development studio in the NFT gaming space.

The NFT game is a tower defense game set in a distant future in which humankind has ventured into space in search of riches.

Chapter 6

How to create / mint NFT

In this chapter, I’m going to show you step-by-step on how to create / mint your first NFT.

So If you wish to create and sell your own NFTs, you will find this chapter helpful.

Let’s get started.

Step 1: Determine the concept

Here you need to decide why you need NFT in your project, in what format your NFT will be is it images, audio, or video?, and how best the concept will be integrated into your

If you have figured this out, the next step is to choose the platform to create your NFT on.

Step 2: Choose a platform

In this step, you need to find the best platform that suits what you’re building.

You can code your NFT smart contract from scratch or create your non fungible token on existing NFTs platforms.

Here are some easy to use platforms where first time creators can mint NFT that doesn’t require coding skills.

Rarible

Blockchain: Ethereum, Tezos, and Flow.

Creator fees: Depending on the blockchain you use, but the option for free minting exists.

OpenSea

Blockchain: Ethereum, and Polygon.

Creator’s fees: 2.5% of your sale.

Holaplex

Blockchain: Solana

Creator fees: $0.00025

Step 3: Build a group

This step requires you to connect and build a community if you want to start making NFTs because when you’re ready to sell your NFTs expect your community to be your number one marketing source.

You’ll also need to polish your Twitter account and join Discord, a chat platform for crypto lovers. Building friendship can go a long way for your project.

Personally, I tend to get most of my information and build authentic relationships through these types of communication channels.

Step 4: Design your art

Every designer has their own procedure, nevertheless, you need to look for ways to translate your art digitally.

NFTs are a new art form, so consider non fungible tokens an opportunity to try new things.

Step 5: Mint and share

Once you mint your NFT you can view it in your profile. Your NFT buy and sell transactions will be public, accessible, and available forever for tracking its price.

Step 6: Sell your NFTs

Finally it’s time to list your NFT for sale. You can sell your NFTs on NFT marketplace like OpenSea.

Chapter 7

List of non fungible tokens marketplaces

Below are three of the most popular non fungible token marketplaces where you can buy and sell your NFT.

OpenSea:

OpenSea is one of the oldest NFT marketplace active today. It is host to popular NFTs including arts, photography, trading cards, music, and virtual worlds.

The platform is multichain and user friendly and a solid choice for beginners, you can get started within minutes and start browsing and even creating your NFTs immediately.

Rarible:

In short, Rarible is a top NFT marketplace where you can buy and sell arts, video game assets, and collectibles.

Binance:

Binance, a big player in the crypto space and one of largest crypto exchange platforms by trading volume, added an NFT marketplace where you can buy and sell collectibles, artworks, and gaming items.

A major advantage of Binance is that they platform runs it’s own native blockchain, and because of this they’re able to offer users very low fees hence giving it an added advantage in the non fungible market.

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Now I’d like to hear from you

There you have it:

My ultimate guide on NFTs.

Which tip from today’s post are you ready to try first?

Are you going to create an NFT or add an NFT to your crypto portfolio?

Or maybe you want to build an NFT project.

Either way, let me know by leaving a comment below right now.

What is Non fungible token NFTs