NFTs: A simple guide for complete beginners
As a beginner, it’s complicated to find information and understand the different concepts of NFTs if you have no knowledge whatsoever on cryptocurrency or the digital world. This guide gives you some simple explanations of the basic concepts surrounding NFTs, making it ideal for all beginners.
What you need to know about NFTs.
NFTs, or Non-Fungible Tokens, are certificates of ownership of a particular digital asset. When you buy an NFT you’re actually buying the certificate of authenticity for a specific digital item or artwork — that can vary from a picture or video, to a drawing, to a collectible like sport cards and so on. You hold the right of ownership of what you bought, but like when you buy a painting or collectible card in real life, the artist of the work can still sustain his copyright and reproduction rights, meaning they can sell more copies of their digital art if they so wish (of course, rarity makes prices goes up, so it’s not always in the artist’s interest to do so).
In other words, when you buy an NFT, it’s like buying an original artwork from an artist, be it a unique sculpture or a piece of music etc. The artwork can be reproduced and copied, but the right of ownership that comes from buying an NFT cannot be copied.
NFTs are non-fungible, which means that each NFT is non-tradable by another NFT, since each is totally unique: their value is unique to them and them only. Unlike Cryptocurrency which can be exchanged by another equivalent Cryptocurrency — for example an Ethereum can be exchanged by another Ethereum — each NFT has no equivalent.
Their uniqueness is based on an identification code and data/information that is determined once you mint an NFT. Each of them is also completely irreplaceable thanks to the blockchain protecting them from any counterfeit or digital copy. Hence, keep in mind that when you buy or sell an NFT you need to check that the blockchain is secure enough.
What does ‘mint an NFT’ mean? To mint an NFT is when you record the data of your NFT into a new block in a particular blockchain.
What is a blockchain?
A blockchain is a structure of databases that register digital information into blocks instead of tables, like the usual database does. The particularity of storing the data in blocks allows information to be registered and not altered once the block of data is closed.
Think of the blockchain as bank lockers, where once content is put in a locker and the locker is closed, no one has the ability to alter, copy or destroy the content of the locker. But the owner of the content has the certificate that proves that they indeed own what’s inside the locker. The NFT is the certificate, the proof of ownership, of the content.
Consequently, choosing your blockchain is as important as choosing a bank for your assets, whether you want to buy or sell NFTs. Each different platform you will use to buy or mint an NFT uses a different blockchain and understanding them is essential.
Where to sell NFTs as a beginner?
The first step is to choose your ideal platform or marketplace and how you wish to proceed.
If you are comfortable paying minting fees and buying cryptocurrency as a beginner, the following platform might be for you:
• Solsea using the Solana blockchain is a good platform to start since the minting fees are cheap (less than a dollar) and the transaction fees are 3%.
If you don’t wish to take any risk by paying upfront, or want to choose between paying minting fees or being able to pay them only once you’ve sold your art piece, then those platforms might be for you:
• Opensea using the Polygon blockchain in exchange for 2,5% of commission fee.
Opensea is a popular platform and, as a result, any NFT can easily be drowned in a sea of others. You might need to market your NFT on social media in order to sell your artwork. Also, be careful not to use the Ethereum Blockchain if you don’t want to have Gas fees for minting your artwork. Opensea is also the perfect choice if you want to sell collections or individual art pieces.
What exactly is a Gas fee? A Gas fee is basically a transactional fee to register your data on the Ethereum Blockchain.
• Mintable with the ‘gasless’ method, allows you to not pay any gas fees or other network fee, in exchange for 5% service fee once your NFT is sold .
• Rarible is a free minting service with the condition that your buyer will be the one to buy the minting and it is automatically put inside the Rarible open collection. It is consequently impossible to make a private collection with this option (at the time of writing). Also even if the minting fees are paid by the customers Rarible still takes a 2.5 percentage for any transaction on their platform like the two websites above, so be aware of those.
What more do you need, to start your NFT collection, whether you buy or sell them?
You also need to have a wallet for your cryptocurrency and any NFTs that you buy or sell. The platform above can be easily paired with different wallets, but the most recommended -on different websites- for beginners are Metamask and Coinbase.
• Metamask: Supported by Android and iOS. Support multiple cryptocurrencies from different blockchain. This one is also able to connect multiple platforms between them.
- Coinbase: Support the main cryptocurrencies, known to have excellent security. Give you complete control over your wallet.
The most important thing in a wallet is the ‘Secret Recovery Phrase’. When you open an account, the platform will give you a security phrase that you must never lose, since it’s the only way to connect you to your wallet on multiple devices. If you lose that security phrase for any reason at all, you will lose all your NFTs and Cryptocurrency linked to this wallet.
Once you have your wallet set up, you can connect your wallet to the platform you want to use. You can then buy and sell NFTs as you like. Be sure to check the NFT you are buying and do some research if you want to resell them later. But if you only want to buy artwork, you just need to choose the best artwork for you. And if you only want to share your artwork on any platform, be sure to check all the possible fees that might result from your sale before launching yourself into your new adventure.
This little guide only covered the basics of the NFTs and is to help true beginners in their search for information. There are a lot of rabbit holes you can fall into, so if you are truly interested in NFTs make sure you do some more indepth research. If you want to add any information that should be included in this guide, be sure to comment your recommendations in the comment section below!
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
