What is NFT (Non-Fungible Token): All Explanations You Need in One Place

The idea of NFT (Non-Fungible Token) has become more trendy than ever. This post is an NFT 101 that covers most, if not all, exhaustive explanations in the field of NFT.

Friday January 7, 2022 3:01 PM PDT by Karen Greene
NFT Cryptokitties 896775 Credits: cryptokitties.co

NFT Cryptokitties 896775 Credits: cryptokitties.co

The popularity and search volume of NFT have shot up about half in the past few months, NFT has become one of the most thought-after icons under the sun, even for nocoiners. Haven’t heard of it yet? Then you’re definitely out of touch. When it first came into our sight, most of our team members immediately find it intriguing and did some study, I mean, how come a group of media lovers miss out on NFT. I’m writing this to share with our users the knowledge I’ve acquired on NFT and my excitement.

You may wonder, however, what on earth is NFT, and how does NFT have anything to do with media? I have to say, after some researches, I did find some fascinating answers.

Yeah, I think you now know what I’m getting at, our team loves video editing and produces original well-edit videos on a daily basis, you can imagine how thrilled we were finding a thing like NFT that can turn our everyday work into actual money. I hope that you are as excited as I am, but all these are only possible when you know about NFT. Without further ado, let’s get started and we’ll kick off with “What is NFT”.

Disclaimer

NFT (Non-Fungible Token) involve in the trading of real money and could be highly speculative, our (IoForth) intention or information herein is for informational purposes only but not for any source of advice, investment recommendation, or credit analysis. Our end-user should know about the risk in trading NFTs. We are not affiliated with any of the NFT-related products, websites, or services in the post. Please consult your economic advisor before any investment.

What is NFT and How Does NFT Work

An NFT (Non-Fungible Token) is a crypto collectible or digital asset, presented in the form of replicable media files which could be an image, GIF, video, music, or video game, but has been given authenticity by blockchain (the fundamental idea of cryptocurrency), especially ETH (Ethereum).

It’s a data unit, stored in a blockchain (digital ledger) that marks its uniqueness. Not like any coin in your pocket that you can trade with others for another one with equivalent value (which means fungible), NFTs are not replaceable. By irreplaceable, I meant people can always right-click on your image or video and hit download, but what they get will never have the same value with your NFT.

In layman’s terms, NFT is a token made from and presented in the form of media files, stored in an encrypted software network system, which makes it unique. The use of blockchain in an NFT instead of mere media files signifies that NFT is not anywhere near some digital copy, it’s an authentic, non-duplicated, and unique creation of your own, one of a kind.

Even your NFT may seem like a mediocre digital copy, even with a run-of-the-mill look, it is as a matter of fact the only one on this planet.

For example, let’s say we have made a video or image with FilmForth video editor and our own footage, and we get an MP4 video or JPEG image by our own hands. It‘s original for sure, but it’s not quite unique, in terms of NFT, at least. Because it’s fungible, what we can do is upload it to YouTube or social media, or just store it on our computer, but whatever the case, it is just a copyable digital file. That’s when blockchain enters the equation, by encompassing the transaction history into a digital registry, your NFT is made non-fungible.

NFT Example

The snapshot below is an example of NFT, a handmade digital artwork created with FilmForth by IoForth, for the celebration of two years anniversary of FilmForth.

Download it all you want, but it doesn’t sell LOL.

NFT Example

NFT Example

Why NFTs Have Value

NFT trading is still in early-stage featuring ambiguous pricing modules (a part of the reasons that I personally don’t think NFT to be a solid investment option), yet some people have already smelled speculation in it. NFT now has over a $7 billion market cap, with high volatility in prices that lures in investors everything single day.

On top of that, it does have a true value, and there are people willing to pay for its ownership. The value of an NFT is generally the result of future buyers’ speculation based off the scarcity of digital media with regard to art. The more popular an NFT is, the more potential buyers there are, the higher value assessment, and the more circulating supply.

To be frank, this is not the first time that people give value to bizarre things.

How to Mint Your Own NFT

No, not as in mint fresh breath that comes from your young and handsome coworker. Simply put, minting NFT is the process of turning media and ETH into blockchain data assets.

To mint your own NFT, you need

  • a crypto exchange account,
  • a crypto wallet with ETH balance (buy some if you haven’t had already),
  • a media file of your preference (or not, it’s for sale),
  • to sign up on OpenSea or other NFT marketplaces

Then you can Mint your own NFT, which means you create your own NFT with ETH and your media file, using blockchain technique.

  • For more information, learn from our step-by-step guide on How to Make an NFT. That’s where everything started and is probably one of the better ways for you to get to know NFT.

Where to Buy and Sell NFT

You can’t trade NFT on Facebook, Amazon, or Telegram. As you can tell by the name of “NFT marketplaces”, they are the platforms where you can buy and sell an NFT. NFT marketplaces are peer-to-peer platforms where you can buy and sell NFT from/to people just like you.

  • We’ve gathered the Top 5 NFT Marketplaces for your reference, they are the go-to places for trading NFT, they have been proved to be trustworthy and well accepted by the public.

How to Buy and Sell NFT

Buy NFT: As mentioned above, NFTs are minted in NFT marketplaces and they are the places to trade NFT as well. You can navigate through NFT marketplace websites, select your favored NFT, buy at the current price, or make an offer. The jargon floor price refers to the lowest bid for the collection items for the moment.

Sell NFT: On the flip side, other people can buy NFT from you in the same manner, but you have to list your NFT on a marketplace first. Associate fees called gas fees will be charged during transactions.

  • Our guide on How to Buy and Sell NFT will walk you through the entire process with detailed tutorials. But please take heed that the trading of NFT involves real money and can be highly speculative and risky, please scroll up to our Disclaimer to read our full declaration.

How NFT Art is Made

Apart from a few media file size and format limitations on NFT marketplaces, you can use any media file you want, however it was created, to make an NFT art. NFT art is made on your own. For example, you can make an animated video with your footage, and that can be a valid NFT as long as it doesn’t have issues uploading to NFC marketplaces.

Non-Fungible Tokens: More FAQs

Can NFT be Copied?

As the name suggests, NFT (Non-Fungible Tokens) are not meant to be copied or stolen. The related attempts are prevented with blockchain encryption. You can copy or download the digital art of an NFT, for sure, but the media copy isn’t the NFT.

How to Invest in NFT?

As mentioned, I don’t think NFT is a good investment option for now nor do I recommend you to invest in NFT blindly. Buying and selling NFTs on NFT marketplaces are the processes of investing in NFT, you‘re basically trading items with cryptocurrency value.

Can I Make an NFT?

The answer is a resounding yes. Aside from buying NFT from other people on NFT marketplaces, you can make your own NFT by minting NFT. To do so, you need a piece of self-made artwork for the appearance of your NFT.

And we highly recommend you try and create an NFT video with our free FilmForth video editor! A brilliant idea to show your creativity to the world, in a way that can’t be faked.

Can NFT be a Photo?

An NFT can be a photo, a film, a song, a video game, an animated GIF, or any other media files you want your NFT to be, as long as you mint NFT with them on marketplaces.

What Does NFT Mean for Artists?

The advent of NFT is fairly important for artists as NFT can help verify the authenticity and originality of artworks. Thanks to blockchain technology, counterfeits will be out of the picture for good, which would be a piece of fantastic news for artists.

Is NFC a Blockchain?

NFC is not technically a blockchain, but NFC is made from media files and blockchain technology. That said, I think it’s fine that you can call NFC a sort of a blockchain.

author

Karen is a professional writer with a background in column writing who enjoys resolving complex topics and explaining them in interesting ways.

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