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What is an NFT? Starter Guide for Designers, Artists & Creatives

What is an NFT? Starter Guide for Designers, Artists & Creatives

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Are you confused by Web3 and NFTs? Searching for someone to explain NFTs in a simple way?

We’ve put together a NFT starter guide for designers, artists, and creators that will get you on the Blockchain by the time you can say fungible!

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What is an NFT?

What is the meaning of NFT? What is an NFT? Simply put, an NFT is a unique digital item stored on a blockchain and NFT stands for Non-Fungible Token.

To properly understand NFTS, you must understand the concepts fungibility and tokens. Let’s start with what fungibility is.

What is the Difference Between Fungible and Non-Fungible Tokens?

Fungible Tokens:

If an asset is fungible, it basically means that you can exchange it for another one of the same kind, and it will hold the same value. It’s interchangeable.

Think about a five-dollar bill. If you exchange it for another five-dollar bill or five one-dollar bills, you receive exactly the same value in turn. Or take, for example, a cryptocurrency like Bitcoin. Each token is an exact copy of the others; you receive the same value when you trade one bitcoin for another.

Moreover, fungible assets can be divided into smaller units. For example, one dollar can be divided up to one cent, and Bitcoin can be divided up to 0.00000001 BTC.


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Non-fungible Tokens:

Non-fungible assets aren’t interchangeable. Some examples from the physical world are a painting, a trading card, or a concert ticket. Note that you can’t split these assets into smaller units, unlike fungible ones. They’re unique.

NFTs allow applying these non-fungibility characteristics in the digital world.

 

How do NFTs work?

A non-fungible token (NFT) is a digital certificate stored on a blockchain which is a digitally distributed, decentralized, and public ledger.

Blockchain records all transactions in a peer-to-peer network; therefore, NFTs are

  • publicly verifiable
  • decentralized: they’re stored on a network of computers (see our post on NFT storage)
  • immutable: nobody can change them once committed

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Most NFTs are stored on the Ethereum blockchain. You can view the transaction history of any Ethereum NFT on Etherscan.

NFTs are also available on other blockchains. Solana and Flow blockchains are two other popular ones for NFT applications.

 

How does NFT ownership work?

An NFT authenticates that the metadata of the associated digital file is stored on a distributed protocol, such as IPFS.

When someone buys an NFT, they can prove that they’re the sole owner of that NFT. However, keep in mind that they only own the token which represents the underlying asset, say an artwork, not the actual asset itself.

For artists and designers, it’s crucial to understand this aspect of NFTs. When you sell an NFT, you don’t transfer the copyrights of your work.

Unless you give up the copyrights with an external agreement in the smart contract of the NFT, the owner can’t, for example, create commercial products based on your art or design and sell them for profit.

 

1. Art NFTs

Fidenza - Art NFTs. Image credit: OpenSea
Fidenza – Art NFTs. Image credit: OpenSea

It makes sense to use NFTs when scarcity, uniqueness, and authenticity are significant. This holds particularly true for digital art.

  • Art NFTs came into the limelight when the digital art creator Beeple sold his work “The First 5000 Days” for over $69M at a Christie’s auction in March 2021. The First 5000 Days is a 1/1 NFT. This means it’s a single edition.
  • Artists can also create an NFT with multiple editions. For example, Bear Bullish NFT by the artist duo Hackatao is an artwork with 23 editions.
  • Art NFTs can include any form of art, including music. For instance, Worst Case is a music NFT by musician 3LAU.

 

2. Collectibles

CryptoPunks - NFT Collectables
CryptoPunks – NFT Collectables. Image credit: OpenSea / CryptoPunks

Collectibles include sets of NFTs where each NFT has unique traits or attributes.

  • A popular collectible category is Profile Picture NFTs (PFPs). These are collections of avatars with randomly generated traits and attributes. They usually consist of 10,000 unique NFTs that people use as profile pictures.

Two well-known NFT PFP projects are Cryptopunks and Bored Ape Yacht Club. NFTs from these collections grant their owners exclusive access to their communities.

Cryptopunks is the legendary collection that inspired the crypto art movement in 2017. It’s one of the first projects that used the non-fungibility concept on the Ethereum blockchain.

Thanks to this historical value, Cyrptopunk NFTs are very valuable. For example, on February the 12th, 2022, Punk #5822 was sold for $23.7M.

Bored Ape Yacht Club (BAYC) is another prestigious collection. Many celebrities, including Gary Vaynerchuk, Eminem, Steve Aoki, and Stephen Curry, have at least one BAYC in their portfolio.

 

3. Sport NFTs

Player Tokens - Sports NFTs
Player Tokens – Sports NFTs. Image credit: OpenSea

Some NFT collections focus on sports teams, players, and important moments of matches. Two prominent sports collections are NBA Top Shot and Sorare.

 

4. Badge NFTs

Badge NFTs. Image credit: Ember Sword / OpenSea
Badge NFTs. Image credit: Ember Sword / OpenSea

These collectibles allow their holders special access to online communities. An example is Tom Brady’s Autograph series which grants NFT owners special access to future NFT drops and a private Discord channel.

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5. Generative Art NFTs

Generative Art NFTs
Generative Art NFTs. Image credit: OpenSea

Generative art is an art form created by writing codes. The Art Blocks platform is a pioneer of generative art NFTs. Artists upload their algorithms to the site and set the maximum number of NFTs to be created from their code.

The most well-known collection that emerged from this platform is the Fidenza series created by Tyler Hobbs. The collection includes 999 pieces of generative art inspired by painter Francis Klein’s abstract artworks.

 

6. Game NFTs

Sci-Fi Collectable Game NFTs
Sci-Fi Collectable Game NFTs. Image credit: OpenSea

NFTs have many advantages for the gaming sector. Consider gamers who play traditional video games. They invest in so many game assets, but in reality, those assets are the property of the game’s publisher, not theirs.

In NFT games, every in-game asset, such as cards, swords, or characters, is stored as NFTs. That’s why players have ownership of them.

Some notable NFT game projects are Axie InfinityGods Unchained, and Splinterlands.

 

7. Virtual Land NFTs

Decentraland Wearables.
Image credit: OpenSea

These NFTs represent the land plots in virtual worlds, like Decentraland, The Sandbox Game, and Cryptovoxels. Owners of such NFTs can build their own applications on these lands, rent them, or trade them for profit. See here for feature on the best VR headsets.

 

New NFT Community for Artists, Designers & Creators

The Forest - NFT Community for Designers, Artists & Creators
The Forest – NFT Community for Designers, Artists & Creators

The Forest is the first NFT community for designers, artists & creatives. The Forest is more than a community however. It is an educational platform and NFT marketplace that empowers creatives with the knowledge, connections & tools to thrive as NFT & Web3 professionals.

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Reason to join: This NFT community is for artists, illustrators, and designers looking to become thriving Web3 & NFT creators and is tailored towards beginners.

Follow The Forest and JustCreativeEth on Twitter.

 

Frequently Asked Questions

Are NFTs a good investment?

While not the traditional form of investment, NFTs can pay off with the right knowledge. That said, we’d advise you to avoid treating NFTs as you would traditional investing. Just like collecting baseball cards or luxury watches can be lucrative, NFTs are merely a product of a collection trend.

How much does Art NFTs cost?

NFTs can cost anywhere from a dollar to a hundred thousand dollars. While NFTs may seem completely unpredictable, keeping an eye on NFT projects can give you a fair understanding of their valuation.

Some of the more popular game cryptocurrencies include Decentraland and Sandbox. These two cryptocurrencies are used completely only in games and for their digital assets.

The most popular cryptocurrency for NFTs is Ethereum. This cryptocurrency has a majority of the NFT market with NFT minted valued at up to $11.5 million

What is the most eco-friendly cryptocurrency for NFTs?

While there are quite a few eco-friendly cryptocurrencies, Solana and Tezos are by far the most popular. Although comparatively new, Solana and Tezos have a loyal following and a large market share when it comes to NFTs.

 

 

The NFT realm brings so many opportunities for Artists & Creators

Every digital asset you can think of can be an NFT, such as wearables, avatars, and mini-games. As a creative person, you can use your skills to build these assets and monetize your creations lucratively.

As a next step, you can learn to how to make and sell an NFT.

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