NFT 101

In a certain period, NFTs were perceived as a kind of financial instrument similar to stocks. Promising big and fast earnings. Later a vector emerged for using the technology to distribute self-valuable works of art.

NFT stands for a non-fungible token. Usual tokens are units of digital currency and have equal value within one network, just like one US Dollar equals one US Dollar, one Pound sterling equals one Pound sterling. One Bitcoin equals one Bitcoin, hence fungible.

There is a number of different cryptocurrencies: Ether (ETH / Ξ), Bitcoin (BTC / ₿), Solana (SOL / ◎), Tezos (XTZ / ꜩ) etc. They are being used more or less the same way we use normal money.

NFTs are being made when you transform a digital asset (graphics, music, video, etc) into data stored on a blockchain. Blockchain is a digital ledger that cryptocurrency networks use to process operations.

With the case of managing cryptocurrency, your crypto wallet has information about the amount of your digital money. With the case of NFTs you also have the display of your digital property and the unique record of your ownership.

Few other things you need to know. Creating an NFT i.e. making a record of a digital asset inside a blockchain is called “Minting”. The next step in making NFT available for purchase, is announcing its data on a marketplace platform. It is called “Listing”.

Also, there are some actions apart from buying that require you to spend additional cryptocurrency. These spendings called “Gas”. Gas necessity and amount is defined by chosen marketplace, original blockchain network of NFT, and by the type of listing (fixed price or an auction). Traffic condition of a cryptocurrency network at the time of a transaction also has a great deal determining the needed gas amount.