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What's an NFT?

NFTs are tokens that we can use to represent ownership of unique items. They let us tokenise things like art, photos, collectibles, even real estate. They can only have one official owner at a time and they're secured by blockchain – no one can modify the record of ownership or copy/paste a new NFT into existenceNFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable for other items because they have unique properties Fungible items, on the other hand, can be exchanged because their value defines them rather than their unique properties. For example, ETH* or dollars are fungible because 1 ETH* / $1 USD is exchangeable for another 1 ETH* / $1 USD

*ETH is a cryptocurrency of the Ethereum blockchain network More on ETH

How do NFTs work?

Each token minted has a unique identifier They're not directly interchangeable with other tokens 1:1. For example 1 ETH is exactly the same as another ETH. This isn't the case with NFTs Each token has an owner and this information is easily verifiable They live on blockchain and can be bought and sold on any blockchain-based NFT market

In other words, if you own an NFT

You can easily prove you own it No one can manipulate it in any way You can sell it, and in some cases this will earn the original creator resale royalties Or, you can hold it forever, resting comfortably knowing your asset is secured by your wallet on blockchain The biggest use of NFTs today is in the digital content realm. That's because that industry today is broken. Content creators see their profits and earning potential swallowed by platformsAn artist publishing work on a social network makes money for the platform who sell ads to the artists followers. They get exposure in return, but exposure doesn't pay the billsNFTs power a new creator economy where creators don't hand ownership of their content over to the platforms they use to publicise it. Ownership is baked into the content itself. When creators sell their content, funds go directly to them

If you create or buy an NFT

You can easily prove you're the creator or owner You determine the license type You can earn royalties every time it's sold (if supported by the platform) You can sell it on any NFT market or peer-to-peer. You're not locked in to any platform and you don't need anyone to intermediate

I am new to cryptocurrencies, what do I need to start?
All you need to do is set up an Ethereum wallet such as Metamask. You will be able to connect your account to the site and receive payments from your photo sales directly to your wallet. How to setup MetaMask

The environmental impact of NFTs

Ethereum is currently going through a series of upgrades, known as Eth2, that will replace mining with staking. This will remove computing power as a security mechanism, and reduce Ethereum's carbon footprint by ~99.98% In this world, stakers commit funds instead of computing power to secure the networkThe energy-cost of Ethereum will become the cost of running a home computer multiplied by the number of nodes in the network. If there are 10,000 nodes in the network and the cost of running a home computer is roughly 525 kWh per year. That's 5,250,000 kWh per year for the entire network

We can use this to compare Eth2 to a global service like Visa. 100,000 Visa transactions uses 149 kWh of energy. In Eth2, that same number of transactions would cost 17.4 kWh of energy or ~11% of the total energy. That's without considering the many optimisations being worked on in parallel to Eth2, like rollups. It could be as little as 0.1666666667 kWh of energy for 100,000 transactions.Importantly this improves the energy efficiency while preserving Ethereum's decentralization and security. Many other blockchains out there might already use some form of staking, but they're secured by a SELECT few stakers, not the thousands that Ethereum will have. The more decentralization, the more secure the system. More on environmental impact of NFTs

Post only questions related to the subject. Marketplace discussion here

Blog / Master
Pro AccountSep 21, 2021 10:08


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