1. An Introduction to NFTs
TL;DR: NFT is a record that you own a digital item with metadata (name, image, description, and more), securely stored on the blockchain.
The acronym itself stands for “Non-Fungible Tokens”. The word ‘fungible’ does make this concept sound a bit complicated, but it really isn’t. NFT (or Nifty, if you prefer) is a blockchain standard for uncopyable digital items.
NFTs allows you to create, own, and sell original digital creations: artworks, music, in-game assets, domain names, and many more (we'll get to that!). When created as NFT, the original item becomes scarce and impossible to fake: it can now be owned by someone and invested in.
If you own a physical art piece, you know that it’s yours, it’s there hanging on a wall in your bedroom. But how do you know that something digital belongs to you?
Until recently, there was no effective instrument to track ownership of original digital items. It limited the possible ways for artists to monetize their digital creations to selling their physical copies, merchandise, or taking commissions. Now, it is possible with NFTs.
When you create an NFT, your item becomes inseparable from a "token". Essentially, you create an authenticity record, a proof of ownership, making it impossible to fake. It now exists in a secure shared database: blockchain.
This record comes with a set of metadata: name, image, description, and more, created once and securely stored on the blockchain. It also refers to the current owner of the piece.
It depends on how you view NFTs. If you’re looking at it from a purely utilitarian perspective, you’re technically not wrong — you can screenshot an NFT artwork and store it on your desktop.
However, there are several things you can’t do with just a screenshot. NFTs provide you with the ability to prove its ownership and scarcity, which are two factors in determining the monetary value of an NFT. If you’re hoping to trade it for profits in the future, a mere screenshot will not be able to help you unlock that layer of value.
Beyond that, some NFTs themselves have functional purposes. Many different types of value can be baked into the NFT token itself. For example, if your NFT also happens to be a playable avatar, you’ll be able to use it to navigate its native ecosystem. This provides you with both an enjoyable gaming experience and the ability to potentially earn profits from the ecosystem itself.
NFTs have already seen a variety of use cases. The most widespread ones currently include digital art and in-game assets. Music, multimedia, domains, Defi applications (e.g. insurances) are also starting to get traction.
Even though NFTs are a creation of the blockchain world, their benefits are already being recognized by significant players across industries.
You can read more about the big brands doing NFTs in the "How to make money on NFTs" section.
There's nothing to be afraid of! Millions of people already use crypto, and you can easily join. The recent developments in the blockchain space make the user experience as easy and smooth as it can be. You will still need to get a wallet and buy some ETH or NEAR to start — but we're offering a detailed guide on that here. Also, you can always find help in the Paras community on Discord.
All NFTs you create and buy live in your wallet. This is a home for your NFTs. It looks like (a very nice!) mobile app, a desktop app, or a browser extension. You also use this wallet for connecting to a marketplace, confirming transactions, putting something on and off sale, sending NFTs to someone. It is done in a couple of clicks. We offer a detailed guide on choosing your wallet, creating it, and topping it up in this guide.
It depends on the type of NFT you’re looking for. In most cases, NFTs can be bought and sold on marketplaces like Paras (that’s us!).
NFTs can also be obtained within their respective project ecosystems (e.g. games), by directly purchasing them with the project’s native token.
NFTs are a whole lot of fun but you should be aware that they can fluctuate in value and are a highly volatile asset class. Please do your own research (DYOR) before you decide to invest in NFTs.