8 most common "how-to" questions about NFTs
How do NFTs work?
NFTs are unique digital assets that are stored on a blockchain, meaning that each one is unique and therefore non-interchangeable. They can represent anything from artwork, collectibles and in-game items to real-world assets such as ebooks, property or tickets. The amazing thing is: Through this superior technology we can implement a decentralized and 100% secure system, without relying on a central authority, like a bank or government, to facilitate transactions.
How do NFTs work technically?
When you mint an NFT you are creating data records of your digital asset. Recording the data on blockchain due to its decentralized nature makes NFTs immutable. In simple terms, this is a way of saying, "hey, this thing is mine and no one else can own it."
They work just like any other crypto asset, whether a coin or a token, such as $ADA or $NMKR. The big difference is that each one is different and cannot be replaced by another NFT. They are recorded on the blockchain with additional metadata. The metadata might include information like the policy ID, when the NFT was created and by whom. A policy ID is like a serial number registered on the blockchain; anyone can track an NFT back to its original owner and verify that it is unique.
How do NFTs make money?
Let´s cover this from different perspectives: The buyer and the project owner.
As a buyer it is pretty straightforward: You can buy an NFT at a price and resell it at a higher price.
As a project owner, your revenue stream depends on the concept and the level of interest from your community on channels like Twitter or Discord. Let’s say you are a musician, you can sell access tokens to your concerts or meet-and-greets. In the gaming business, you can create in-game items that can be traded or sold.
At NMKR, we are currently seeing more advanced use cases emerge, like tradable NFTs representing the market value of real estate assets. It's like the real world: If you have an idea that people are willing to pay money for, then you can use blockchain and NFT technology to create a decentralized and 100% secure way of selling your idea, without the need of a centralized organization like a bank or a government.
In the end there are no guarantees, and it really just depends. There is a common myth about getting rich with NFTs, which we covered in a blog previously. The most important thing is: Do your research carefully and try to get different sources of information.
How does NFT minting work?
You can choose to mint either a single NFT or a small collection of up to 15 NFTs using the easy-to-access tool NMKR Mint. The process is very simple: You upload the image file (PNG, JPEG, or GIF), fill out the form, choose royalties and selling options, and connect your wallet. That's it.
You want to get started right away? Check out this video for a walkthrough
If you want to go big time and create thousands of NFTs, our NMKR Studio is the place to be. Go to the website, create an account and get started today: https://studio.nmkr.io/register
How will NFTs change the world?
The mainstream media has focussed on covering NFTs looking like silly apes or cats, which led to more and more ape clones and parodies. But this is only the tip of the iceberg.
In reality, NFTs can change the world much more profoundly. While the use cases are still in their infancy, we already see several interesting applications in fashion, gaming, physical assets, crowdsourcing (e.g., music and books) or digital contracts, among many others. To keep up with the latest developments, we highly recommend following our Twitter and subscribing to our newsletter.
How do NFT marketplaces work?
Marketplaces in crypto are what malls or supermarkets are for the physical world with each catering to a specific niche or type of customer. In the physical world, there are many different stores for games, shoes, branded clothes or books. In crypto you can find different marketplaces for different types of NFTs, from games, jpegs, music, and books, to virtual real estate.
Marketplaces are essentially designed to provide a safe and secure environment for buying, selling, or trading NFTs. Generally, marketplaces work in the following ways:
- First, you need to create an account on the marketplace.
- Next, you will need to connect your wallet to the marketplace, so that you can easily transfer NFTs to and from the marketplace.
- Once your wallet is connected, you can start buying, selling, or trading NFTs
Thank you for reading this article. We hope we were able to give you an overview of how NFTs work. If you have any questions, please feel free to reach out to us via email: firstname.lastname@example.org
Your NMKR team