NFTs: A Complete Guide

"WTF are NFTs?"

Non-Fungible Tokens (NFTs) are unique and indivisible digital assets that exist on a blockchain, a decentralized and secure digital ledger.

They represent one-of-a-kind items, such as collectibles, digital artwork, membership passes, event tickets, and more, each possessing its own distinct identification number.

NFTs stand out from other digital assets due to their exclusivity and the ability to verify ownership and transaction history on the blockchain.

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NFT Timeline

2012

Colored Coins project showcase digital assets on Bitcoin blockchain

2014

Kevin McCoy and Anil Dash launch Quantum on the Namecoin blockchain

2017

CryptoKitties and CryptoPunks drop on the Ethereum network

2018

Axie Infinity is the first play-to-earn (P2E) on-chain mainstream game

2020

NFT market growth with transactions reaching $250 M

2021

NFTs mainstream popularity leads to $25.1 B total volume increase

2022

NFT market resilience with $24.7 B in trading despite crypto winter

2023

NFT market rebounds, membership-based projects popularizing practical NFT uses

hello world!

Millions of users are trading NFTs

The NFT market is Global. NFT are being traded in countries all over the world.

50%

Growth of Unique Active CrytpoWallets

34M

Number of Active CrytpoWallets

+$20 Billion of NFTs were traded last year

The financial impact of NFTs has been significant, with billions of dollars in sales and transactions. They are expected to play a prominent role in the emergence of the decentralized internet, powered by blockchain technology.

In the last 5 years (2018-2022) the market experienced an exponential growth (+9900%) going from $5.8 Millions in 2008 to $ 24.7 Billion NFT volume traded last year.

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Which marketplace traded the most?

NFTs Benefits

Transparency

The blockchain ledger tracks the ownership history of NFTs

Scarcity

NFTs are unique and scarce, which can give them value

Provenance

NFT technology helps to prevent fraud and counterfeiting

Programmable

NFTs can be programmed with smart contracts, which automate certain tasks or provide additional functionality

Engagement

NFTs can be used to create direct relationships between creators and collectors to build a stronger and more engaged community

Royalty

NFTs can be programmed to pay royalties to the creator every time the NFT is sold. This can help to ensure that creators are fairly compensated for their work

NFTs have found diverse use cases across various industries

Art

NFTs have transformed the art world by allowing artists to tokenize and sell digital artworks as unique collectibles. This provides them with new revenue streams, provenance tracking, and increased exposure to a global audience.

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Music

NFTs are disrupting the music industry by allowing musicians to sell limited edition albums, concert tickets, and exclusive merchandise directly to their fans. They provide artists with direct monetization opportunities and enhanced fan engagement.

Gaming

NFTs have gained popularity in the gaming industry, enabling players to own and trade in-game items, characters, and virtual land.

Sport

NFTs let sports fans own rare digital collectibles, including player cards and memorabilia. They also offer exclusive membership programs and even allow fans to become part-owners of their favorite teams.

Real Estate

NFTs can revolutionize real estate by allowing fractional ownership, efficient transfers, and improved liquidity. They also enable secure recording of property maintenance activities.

Domain Names

NFT domains are a new form of domain name that use blockchain to store ownership info. They offer better security and more capabilities than traditional domains.

Ticketing

NFTs are used for secure and transparent ticket sales, with benefits including fraud prevention and ownership verification.

Fashion

NFTs enable digital ownership of unique fashion items and collectibles, allowing for trading and showcasing on social media and virtual worlds.

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Did you know?

Companies like Adidas, Sotheby's, Liverpool FC, and many others are supporting mainstream NFT adoption

How do NFTs work?

Blockchain is a decentralized ledger system recording transactions across multiple computers

Blockchain and NFTs go hand in hand. Blockchain provides security and transparency for generating, owning, and conducting transactions with NFTs. This creates a safe and efficient environment for creators and investors to work with digital assets.

Tokenization is the process of representing assets digitally on the blockchain

Tokenization enables the transformation of assets into digital representations, providing benefits such as fractional ownership, liquidity, and increased accessibility.

What about Tokenization?

Asset Selection

Identify the unique asset that will be tokenized. This could include real estate, artwork, intellectual property, collectibles, or any other asset with distinctive value.

Asset Evaluation

The asset's value and characteristics are assessed to determine its eligibility for tokenization. These factors can include market demand, scarcity, and provenance.

Legal and Regulatory Compliance

Compliance with applicable legal and regulatory frameworks is essential before proceeding with tokenization.

Asset Representation

The chosen asset is digitally represented through tokens on a blockchain. Each token represents a fraction or the entirety of the asset's value and ownership rights.

Smart Contract Development

Smart contracts are created to define the rules and conditions governing the tokenized asset. These contracts automate processes such as ownership transfers, revenue distribution, and governance.

Token Offering

The tokenized asset is offered to investors or buyers through a token sale or initial offering. This provides an opportunity for individuals to acquire fractional ownership or rights to the unique asset.

Trading and Liquidity

Once the tokens representing the unique asset are distributed, they can be freely traded on blockchain-based marketplaces.

Smart contracts are self-executing contracts

Smart Contracts have predefined rules and conditions encoded on a blockchain

Smart contracts play a vital role in the creation, ownership, and transfer of NFTs.

They enable automated and secure transactions, eliminating the need for intermediaries and ensuring the smooth functioning of various processes within the NFT ecosystem.