BLOCKCHAIN IS SOOO EASY

Explained Easily: The Best guide For Beginners interested in NFT (part 1)

NB: Blockchain, Strictly for Lazy Beginners

• What Are Non-Fungible Tokens?
• How Are NFTs Created?
• Characteristics of Non-Fungible Tokens
• What Are the Uses of Non-Fungible Tokens?

A Small Boy Playing with Paint Balls by Kelly Sikkema on Unsplash

The world of art comprises a whole variety of things. Art is anything creative. Everything we do can be categorized under art. Music is called art, and paintings and drawings fall under the art category. Writing of any form is also recognized as art. In fact, man is art himself.

Non-fungible tokens (NFTs) represent art in the virtual world. Everything one does, in reality, can be captured as art and be represented as an NFT virtually.

What are Non-fungible Tokens?

NFT writing on different colored hexagons by Choong Deng Xiang on Unsplash

Non-fungible tokens (NFTs) are digital tokens, just like cryptocurrencies (bitcoin), with an exciting twist. They cannot be exchanged for one another. 1 bitcoin in Nigeria is equivalent to 1 bitcoin in China (and everywhere in the world). Same with fiat currencies, 1$ is equal to 1$ worldwide.

NFT A can never be equivalent to NFT B. Even if NFT A looks like NFT B, they are two separate identities on the blockchain.

How is this possible?

All NFTS are created on a blockchain (i.e., they are created using blockchain technology).

NFTs are created through a process called minting.

What is Minting?

Minting converts digital files (Mp3, Mp4, Jpeg, Docs) into blockchain-based digital files (NFTs). These newly created blockchain-based files are stored on a blockchain.

How are NFTS Created?

children playing with Lego toys by Amélie Mourichon on Unsplash

Just like cryptocurrency creation, before an NFT is created on the blockchain, a validator (node) needs to approve its addition to the blockchain.

For example, Mrs. A wants to convert her birthday picture to an NFT using the Ethereum blockchain.

Before this NFT is created on the Ethereum blockchain. A validator (Node or Computer) on the Ethereum blockchain network must approve the creation and record of the already made NFT on the Ethereum blockchain.

The newly created NFT is sent to a wallet address that can be accessed only by her.

Each NFT minted contains a unique identifier. This identifier is what gives it the non-fungible tag. This is why NFT A can never be equivalent to NFT B.

This is likened to fingerprints; identical twins have identical fingers but different thumbprints. We can see each NFT has a unique identity equivalent to a thumbprint).

Each NFT mined already has an owner (i.e., the owner of the address the newly minted NFT is sent).

This is where the uniqueness of NFTs shines.

Humans like you and me love ownership of unique assets. And NFTs possess individuality. An added advantage to them is that they can never be a fake NFT. Because all transactions on the blockchain can never be altered.

For example, NFT A is the only existing NFT in the whole wide world, even if NFT B is identical to it physically.

Characteristics of Non-Fungible Tokens

Diagrammatic illustration of NFTs and its characteristics illustrated by Illinto&Dicinto

• Irreplaceable: Due to the nature of the blockchain technology they are built on, they can never be replaced. All NFTs in this world are irreplaceable.

Diverging Arrows Labelled NFT A and NFT B Illustrated by Illinto&Dicinto

• Representatives: Almost all NFTs are digital representations of physical assets. Some refer to NFTs as phygital assets (i.e., a combination of physical and digital).

physical plus digital equate Phygital illustrated by Illinto&Dicinto

• Extensible: One NFT can be combined with another NFT to create a third NFT. This third NFT would be different from his parent NFT.

A diagram illustrating extensibility of NFTs by Illinto&Dicinto

• Unique: For example, NFT A is the only existing NFT worldwide. Even if it shows the same image as NFT B. on the blockchain, each possesses a unique identity (thumbprint), distinguishing one from the other.

Identical block structures titled NFT 1, NFT 2, NFT 3respectively not equal to each other illustrated by Illinto&Dicinto

• Sole ownership: One NFT per owner. An NFT is stored on one wallet address, which is owned by one person. In some cases, a group of people comes together to buy one NFT. On the blockchain, it still belongs to one person, but on a legal agreement, it belongs to a group of people.

Ownership of NFT Belong to One Individual Illustrated by Illinto&Dicinto

This is all for today. You did a good job for getting this far. Check out the next article discussing NFTs and their Uses.

Best NFTs Guide for Beginners (Part 2)

Dear reader, do you now understand why NFTs are referred to as Non-Fungible Tokens? We would love to hear your ideas in the comment section.

Clap if you learnt something new.

Share to a friend, so you both can partake of this well of knowledge. Before you exit check out this article on why Bitcoin attained success in a short span of time.

TOKENOMICS AND CRYPTOCURRENCIES: BITCOIN AS A CASE STUDY

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