‘WTF Is An NFT?’: All You Need To Know About NFTs

‘WTF Is An NFT?’: All You Need To Know About NFTs
Lakhi Soni for Homegrown

Sometime in March 2021, Twitter CEO and co-founder Jack Dorsey sold his first-ever tweet ‘just setting up my twttr’ for more than a whopping $2.9 million as an NFT. Following a bidding war over the NFT of Dorsey’s tweet between tech entrepreneur Justin Sun and Bridge Oracle CEO Sina Estavi, the tweet was finally sold to Estavi.

If you are on social media, chances are, you might have already come across the term ‘NFT’. Even if you haven’t so far and would be interested in knowing a little extra (actually, let’s brag, almost everything) about NFT, here’s a quick brief on the concept of NFTs followed by a discussion on NFTs with Kavan Antani, co-founder IndieFolio Network who is also associated with NFT marketplace called ‘Fable’ that enables COVID relief.

Here are a few quick pointers for you to acquaint yourself with the concept of NFTs.

What are NFTs?

  • NFT stands for non-fungible token.
  • In economics, a fungible asset is something with units that can be readily interchanged – like money.
  • An NFT is a digital asset that represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.
  • With money, you can swap a £10 note for two £5 notes and it will have the same value. However, if something is non-fungible, this is impossible – it means it has unique properties so it cannot be interchanged with something else.

How do they work?

  • Traditional works of art such as paintings are valuable because they are one of a kind. NFTs exist on a blockchain, which is a distributed public ledger that records transactions. You’ll probably be most familiar with blockchain as the underlying process that makes cryptocurrencies possible.
  • While digital files can be easily and endlessly duplicated, with NFTs, artwork can be “tokenised” to create a digital certificate of ownership that can be bought and sold.

How much are they worth?

  • In theory, anybody can tokenise their work to sell as an NFT but interest has been fuelled by recent headlines of multi-million-dollar sales.
  • Blockchain technology and NFTs afford artists and content creators a unique opportunity to monetise their wares.

With all of this basic information in our arsenal, we went knocking on Kavan Antani’s doors, asking Antani to give us a little more on NFTs and help us with our (many, many) questions.

Scroll to read our questions and Antani’s answers.

Why purchase/invest in NFTs and not anything else?

The hype of NFT primarily comes because the world is transitioning to being completely digital. If most of the things you do have a digital interface, then the virtual world, in fact, the whole metaverse is going to become a reality and a lot of people believe it will be as such. The ownership of digital assets will also become important. NFTs enable that and that is essentially the biggest reason for the hype.

I would definitely not endorse that you should invest in anything other than NFTs. In fact, they are, in my opinion in their nascent stage. The concept of digital ownership will become better and better on the blockchain. It may not necessarily be NFTS due to some challenges but as time passes it will become better and better.

What does it take to purchase an NFT?

An NFT can cost anything, but on most marketplaces, the lowest prices I have personally seen is $100 which is about 7000-8000 rupees. If you are someone who is already sitting on crypto, it is very simple to buy NFTs, but if you don’t, it will be a matter of slight learning and a few steps that you will have to take.

Get on marketplaces like WazirX or Binance, buy some Etherium, depending on the marketplace and then transfer that into a wallet and chase it. I can send across a creative which explains it really well. We did something called Fable and I was part of that as a volunteer and we have charted out some steps that can help you, so you could use that as my answer.

Who can sell an NFT and how?

Essentially anybody who can create a digital asset can sell an NFT. Every marketplace has its own process to onboard – some curated, some you may have to follow through Twitter. You may have to get on Discord channels to ensure you get a good endorsement about yourself for some others. As long as you have a decent amount of Etherium and a wallet like Metamask, you are good to go. You can go to Open sea, Rarible, or Arcane and follow the steps, and they will help you get on board. Even YouTube may help if you search how to sell an NFT. You can create exclusive content for buyers and can keep adding more value for the buyer.

‘Do people in the club know that the NFT of the song they are dancing to is owned by me?’

Thinking about duplicity and ownership of art, how does the world know who owns the NFT of something? How to protect against duplication?

When it comes to ownership in the real world, you can do forgery. Fakes of many brands exist and they are very good as well! However, there is a system and different processes in place to authenticate and validate that something is original, which is what an NFT does. You may have someone making a fake but since it is a decentralised network, it’s easy for you to understand who is the first person to own this and what they bought is it actually sold from the verified creator or not.

Now, to go back to the analogy, I don’t know if it really matters if the people in the club know who owns the NFT because they don’t even know who owns the club or who owns the record label because that is not relevant. What comes into play is, for example, if I want to buy an FND chain, it will be important for me to understand who owns this and what is the validation. When it comes to protecting against duplication, the whole blockchain platform does itself. Blockchain is awesome in preventing forgery but when it comes to theft, that’s tough because if you are someone who has an account in a marketplace and that gets hacked, then there is very little you can do. Setting strong passwords, two-factor authentication is all valid right now. There are more steps you could take if you are a pro to prevent yourself from getting any hackers attacking your accounts and taking your creds.

There’s something odd about ‘owning’ someone’s art as property that can be bought or sold as an investment. Do you think it reduces the relevance of ‘art’ as such and makes it more about its value?

It is important for people to know that buying an NFT does not give you the IP necessarily. A separate agreement will have to be attached if you want to transfer the IP. But if somebody buys something from Nba top shots it doesn’t mean you own that, NBA still owns that so you cant distribute or duplicate it in any way publicly use it because NBA still owns that, all, you do is you own the NFT and you have an option to resell it. However, people do transfer IP rights when buying NFTS but it’s usually external and from my understanding, it does not happen often.

Reducing the relevance of art, personally, I don’t agree with that statement, because the whole value of art generally or about anything is perception-based and about the narrative. Why is the Mona Lisa valued so so high? While it was popular and da Vinci was a good artist, one major factor here was that Mona Lisa got stolen in the 1900s and there was an entire thing to find it and it was then brought back to the museum. It caught so much attention and a tonne of people become aware and that shot up its price. So did the artist do anything there, did the art really change? Not really, only the perception got tweaked and more people cared, knew , and talked about it and thats why its worth increased.

I believe NFTS are a great way to give power to artists who are alive today, giving good work, and have an existing community of people. Instead of art collectors valuing only certain people, this gives more control to fanbases the actual appreciaters of art and thats why i think this is fantastic. When it comes to investing into art, people are serious about it right they do a lot of research and understand the artists and the journey and potential an artist will have. Beeple for example is the highest-earning NFT artist and the value of his art will only increase if 10 years down the line people think that people is cool or popular and more known than what he was 10 years ago, and if that does not happen the investment will go into negatives. Like I said in my first answer , I feel NFTS will mature, they are in their nascent stage, it could be a different version of something we already have but if you are not a pro, sitting on a ton of crypto, looking at NFTS as an investment vehicle for you could be very very risky if you dont know what you are doing. It’s not as easy as putting an X amount of money into a fund and those guys promising you certain X amount of returns. We have not reached that stability yet and no one really knows what’s going to happen.

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