NFT Explained

NFT EXPLAINED
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What Are
NFTs?
Non-fungible tokens or NFTs are a type
of digital token where every token is
different and hold unique
characteristics.
Due to the nature of the NFTs, many
NFTs have varying rarity and are
considered valuable in the digital asset
community. Anything from games to
painting and even memes can be an
NFT.

Key Characteristics
of NFTs
Indivisibility
Uniqueness
Ownership
Rarity
Transparency
Interoperability

Technically, anyone can create NFTs, however, that does
not mean that all NFTs will get a high value during the
sale.
Many NFT marketplaces allow any user to create their own
NFTs, but the users need to have a reputation within the
community to earn a good value for their work.
A higher social media presence and a fan base are the
highest factors in determining an NFTs value.
Can Anyone Create NFTs?

Ethereum token standard is the most common token
standard that NFTs use now. Typically, ERC-721 and ERC-
1155 token standards are widely used to create various
NFTs.
Some early-stage NFTs use a hybrid ERC-20 token
standard to create NFTs. Unfortunately, to sell them you
need to wrap them.
Other than Ethereum, EOS, FLOW, Tezos, etc. also offer a
specific token standard for developing NFTs.
What Token Standard Does NFTs Use?

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Popular NFT Projects
CryptoPunks
Decentraland
NBA TopShot
Axie Infinity
Sorare
OpenSea

CryptoPunks: CryptoPunks is a collection of digital art collectibles. Here,
every punk is a unique character with a similar art style (24x24 pixels).
Axie Infinity: Axie Infinity is a type of game where players collect Axies
and use these to battle, breed, raise other Axies.
Decentraland: Decentraland is a virtual world where certain items within
the world are NFTs. It uses the Ethereum blockchain.

OpenSea: OpenSea is an NFT marketplace that allows users to buy,
sell, create, trade, and own NFTs. OpenSea provides one of the richest
collections of NFTs on the market.
NBA TopShot: NBA TopShot is a type of collectible NFTs where the
platform tokenizes NBA highlights. These highlights are short
moments and based on the moment, the value is determined.
Sorare: Sorare is a collection of soccer trading cards where users can
use the trading cards to create a virtual team and compete with other
teams.

NFTs can help digital artists or any type of artist to fight
plagiarism as they can tokenize their creations, which can’t
be copied.
Luxury goods can be verified making them NFTs and giving
ownership to the buyer only.
Manufacturing companies can tokenize their products in
order to offer provenance to their consumer base.
Use Cases of NFTs

Institutions can offer NFT based certifications and
licenses, to authenticate a person’s educational
background.
NFTs can stop counterfeiting tickets and
merchandise issues within the sports industry.
Games can tokenize in-game items for players and
give them ownership over those items.
Use Cases of NFTs

The security level of NFTs is similar to any type of digital asset
and very close to cryptocurrencies.
All of the NFTs are stored on the blockchain platform where
the ledger is immutable, making it impossible to delete or
alter the ownership.
Blockchain offers robust security protocols and eliminates the
scope of cyber-attacks.
How Safe Are NFTs?

Recently, Nifty Gateway was attacked by third parties and
they stole millions of dollars of worth of art. Nifty Gateway
could ultimately return the items to respectful owners.
Security issues within user authentication are the main source
of recent cyber-attacks on NFTs.
Users not using multi-factor authentication processes and
using weak passwords or PINs are leading to these security
issues.
Security Flaws

Where to Buy and
Sell NFTs? OpenSea
Rarible
SuperRare
Nifty Gateway
Mintable
There are many NFT marketplaces where
uses can go to buy and sell NFTs. Some of
these are –
NFT
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NFT

To buy and sell on NFT marketplaces, users need to create
an account and connect their wallets to the account.
Different marketplaces have different supported
cryptocurrencies. The most popular currency currently is
Ethereum. Users can use Ethereum to buy NFTs.
To buy Ether/Ethereum or any other crypto, users have to
get a blockchain wallet and fund it through a fiat-to-
crypto currency exchange.
Where to Buy and Sell NFTs?

List of Popular NFT Sales
PRICE SELLER BUYER DATE OF SALE
February 25,
2021
EVERYDAYS: THE FIRST 5000 DAYS
This artwork is a compilation of the first
5000 digital artwork of Beeple.
$69.3M Beeple Metakovan March 11, 2021
CRYPTOPUNK #3100
It is a pixelated alien art image with a
headband.
$7.58M Anonymous Anonymous March 11, 2021
CRYPTOPUNK #7804
It is a pixelated alien art image with a cap
forward, a small shade, and a pipe.
$7.57M Anonymous Anonymous March 11, 2021
CROSSROADS
It is a short political art video on the
presidential election 2020 from Beeple.
$6.6M Pablo Anonymous
THE FIRST TWEET
It's the very first tweet of CEO and
founder of Twitter, Jack Dorsey.
$2.9M Jack Dorsey Sina Estavi March 22, 2021

CRYPTOPUNK #6965
It is a pixelated art image of an ape with a
fedora.
$1.54M Anonymous Anonymous February 19,
2021
AXIE INFINITY GENESIS LAND
These are 9 virtual Genesis land of the
game Axie Infinity.
$1.5M Axie Infinity Flying Falcon February 28,
2021
CRYPTOPUNK #4156
It is a pixelated art image of an ape with a
blue bandana.
$1.25M Anonymous
NOT FORGOTTEN, BUT GONE
It's a 16-second video of a rotating golden
gummy bear skeleton.
$1M WhIsBe Pablo March 17, 2021
METARIFT
Features spherical objects rotating in
various directions and clustered together.
$904.41K Pak DANNY March 21, 2021
Anonymous February 18,
2021
List of Popular NFT Sales

NFTs started to become mainstream in 2017,
but not until 2020, did we see a massive surge
in NFT popularity.
Only during Q1 2021, the industry resulted in
$1.5 billion in transactions, which is 2,627%
more compared to Q4 2020.
NFTs are more fluid and flexible compared to
other cryptocurrencies such as Ethereum, or
Bitcoin. One can transform any type of asset
into an NFT.
Why Are NFTs So Popular?

Users can lose, break or destroy physical assets or collectibles,
but NFTs can’t be destroyed or stolen. Once a user gets
ownership, they can own it forever.
NFTs are a different take on digital assets, which is quite
innovative and easier for non-technical people to understand
and take part in.
No one can duplicate NFTs, thus, third parties can’t misuse the
intellectual property of an artist.
Why Are NFTs So Popular?

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