Non-Fungible Token is what NFT means.
Non-Fungible, it means that the token is unique and cannot be exchanged for another token. Because these tokens are unique, and it can be used to represent unique digital assets like a digital artwork for example.
A unique serial number would be a simple analogy. When you buy an iPhone, for example, every phone comes with a unique serial number that is used to identify the authenticity of the phone, and is registered to the phone’s holder. Comparably, when you buy an NFT artwork, the artwork comes with a non-fungible token that is used to identify that artwork, and is tied to the artwork’s holder.
However, an NFT is much more than a record of authenticity and ownership.
Can you imagine if your phone’s serial number was actually a computer program that could receive payments, update its ownership information, and distribute royalties, among other functions. This is what your NFT can do.
This way, NFTs make the process of trading digital assets a lot easier. They protect the financial interests of creators and add programmable functionality to digital assets. And because NFTs are stored on the blockchain, they’re also highly secure and traceable.
This is just an overview of what NFTs are and how they work, but there’s much more to it. To learn more, you can read our NFT Basics series.
Precisely anything that can be stored as a digital file can be made into an NFT – art, documents, videos,music, you name it. Although, when you’re minting on an NFT marketplace, there will be certain file format requirements for your NFT.
On Trophee, the main file attached to your NFT (preview file) can be any image file, MP4 or MOV. You will notice that all of these file formats are visual formats, and most marketplaces will have a similar requirement because NFTs need to be visually displayed to make attractive listings. However, your NFT can also include bonus downloadable files, which can be any file format.
So, if you’re minting a song, you should use an mp4 with video or cover art so that it looks good on marketplaces. And you could include the high-fidelity audio files as downloadable files instead. By doing so, you’re making sure your NFT stands out on the market while also providing your buyers with the best quality of work.
Being able to put in downloadable files with your NFT also means that you could include more than one type of asset in a single NFT. Your main file could be an image, while your downloadable file could be text, audio, or something else. For example, some creators mint their digital artwork, and include an accompanying piece of poetry in the downloadable file. Others use it to include secret messages or behind-the-scenes videos.
There are few limits to what you can include in an NFT, so don’t be afraid to experiment and get creative! Because of smart contract capabilities, there are many interactive applications for NFTs too, such as concert tickets, vaccine passports, and membership cards.
As we all know hype alone wouldn’t be able to build a $40 billion industry. NFTs offer lots of real benefits for creators and collectors alike, enriching the creator economy and offering buyers better avenues for engagement and participation. Here are the benefits of NFTs:
As we all know, minting an NFT needs “gas fees”, which is the price users pay for the computing energy used to process transactions on the blockchain.
The cost to mint an NFT depends on your choice of blockchain is unpredictable. Minting can be very cheap – or even free – on some blockchains, but the most widely used NFT market is on the Ethereum network, which can have pretty expensive gas fees – up to a couple of hundred dollars occassionally!
For new NFT creators, having access to the massive market on Ethereum is valuable because it gives them the widest exposure. Yet, if you can’t afford the gas fees, you have a few options:
1. Use another blockchain, where fees are extremely low. The tradeoff is that you get less exposure.
2. Use gasless minting features such as OpenSea’s Lazy Minting. This way you can stay on Ethereum without having to pay gas fees. The tradeoff here is that you can’t set royalties for your work.
Most marketplaces will charge a fee for facilitating the sale of your NFT. OpenSea charges 2.5 percent, while some other marketplaces like Foundation can charge up to 15%. Before you choose a marketplace, make sure you know all the fees and costs associated with using that marketplace.
There are many blockchains that support NFTs, and there are multiple NFT marketplaces on each blockchain.
The leading blockchain for NFTs is Ethereum because it has the most buyers, the average Ethereum NFT sells for more money than NFTs on other networks, and it is the most secure. However, the Ethereum network has issues with scalability and high gas fees which can be a barrier to entry for some creators.
Other blockchains like Solana and Tezos have lower fees, but creators don’t get as much exposure because the markets on these networks are smaller. They are also much newer than Ethereum, and are less secure.
Similarly, each NFT marketplace has different benefits. They all differ in the fees charged, and the amount of marketing support they provide to creators. Before you start selling your NFT, read up on the benefits of each blockchain and NFT marketplace so you know exactly what you’re getting into, and what kind of support you can expect.
Copyrights are crucial for protecting an artist’s intellectual property. It is what guarantees security for the the artist, by making sure that only the author has the power to distribute, monetize, and make derivatives of their work.
NFTs are protected under the same copyright laws that protect all other creative works. Buying an NFT does not entitle you to the copyright of that work, unless the NFT creator choses to transfer the copyright to you.
Before you get started selling NFTs, make sure you understand what taxes, if any, you will need to pay. In the USA, profits from NFT sales are considered income and will be taxed at your ordinary income tax rate, about 10% – 37%. NFT profits are also subject to self-employment taxes, at a rate of 15.3%. When trading NFTs, either for cryptocurrency or another NFT, you will also be subject to capital gains tax.
Here’s a useful guide on NFT taxes by TaxBit.
NFT tax regulations vary from country to country, so do your own research before spending any of your NFT profits!
Now that you know all the things to consider before getting started on your NFT journey, you can begin creating and selling NFTs! The next guide in this series will cover the best practices in NFT creation and marketing.
The NFT industry is the fastest growing industry in the world. In 2021, NFTs generated over $40 billion dollars in trading volume, was the most searched word on Google, and was crowned the Collins Dictionary’s word of the year. With this explosion of interest, more and more creators are now looking towards NFTs as a new avenue for monetizing their work.This article is the first of a series dedicated to creators called Creators’ 101. This series will guide you in this emerging industry, and tackle the many questions you may have about NFTs as a creator. To start with, here’s everything you need to know when getting started with NFTs:
A smart contract in the context of cryptocurrencies is a blockchain-based application or program. They often function as a digital contract that is upheld by a certain set of guidelines. All network nodes reproduce and execute computer code that contains these established rules.
Nowadays, a centralized paradigm is used in the vast majority of online games. This indicates that all relevant information is kept on a server that the game's administrators have complete authority over.
The most fundamental application of NFTs in games is the representation of characters and unique goods that grant bonuses or other abilities. These NFTs might increase in value over time or as the game becomes more well-known. More significantly, some games allow players to create their own NFTs, which expands the world of the game.
What the world needs now is connection. Linking Artists (Mangaka) and Art Lovers (fans) through NFTs.