NFTs are another medium for artists to express themselves and create unique digital art pieces. The blockchain technology that underlies NFTs is relatively new, but it has the potential to revolutionize the art world by providing a secure and transparent way to track the ownership and provenance of digital assets. Just as photography was once a new and innovative medium that challenged the traditional definition of art, NFTs have the potential to do the same.
NFT General FAQs
What does NFT mean?
NFT is an abbreviation for non-fungible tokens. A regular token is fungible because it is the same, regardless of denomination. Whereas tokens with changing values are called non-fungible.
NFTs are stored on a blockchain (a digital ledger) that certifies a digital asset. An NFT can exist independently or as a component of another object.
Are NFTs cryptocurrency?
No, NFTs are not cryptocurrencies.
NFTs are more like a stock – they have a price and a market cap, but unlike a traditional share, they don’t have a set mass or value.
Can an NFT be copied?
NFTs are unique digital assets that are certified on the blockchain.
Is the price of an NFT price-controlled by a central authority?
No. NFTs are utility tokens. Therefore, a central authority like fiat currencies (U.S. Dollar, Euro, etc.) does not influence their price. The price of ETH (Ethereum) is traded globally 24 hours a day, 7 days a week.
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What is an NFT wallet?
NFTs are stored in a cryptocurrency wallet. Wallets support different blockchain protocols. Therefore, you must use a wallet that supports the blockchain protocol of your NFT. The majority of art NFT platforms use the cryptocurrency Ethereum or Ethereum-based currency.
You will need a crypto wallet if you want to buy NFTs.
The most universal wallet is Metamask. It supports Ethereum and Ethereum-based NFT platforms. You can explore Metamask’s website here.
Watch this YouTube step-by-step tutorial to set up your Metamask wallet. 👀
Is an Ethereum wallet private?
Yes and no. Ethereum wallets have a public address and private keys. The public address of an Ethereum wallet is a string of letters and numbers starting with “0x”.
To view your public transactions, put the URL below into a new browser window and replace YourIDNumber with your public wallet address.
https://etherscan.io/address/YourIDNumber
NFT Legal FAQs
Are NFTs taxable?
Many countries have not set specific laws but expect people to treat cryptocurrency as currency and NFTs as property. Laws and taxes are constantly changing as NFTs are accepted into the mainstream. Look into your local laws for cryptocurrency and digital goods.
Can an NFT be copyrighted?
It depends on the legal jurisdiction. For example, in the U.S., an NFT can be copyrighted.
NFT Tech FAQs
How does NFT minting work?
NFT (Non-Fungible Token) minting binds an artwork to a blockchain token. Minting is a backend process that uses a smart contract and a set of parameters to assign ownership and security. On initial minting, the creator may be the first owner or the original “controlled by” address.
When an NFT is sold, a new token is not created. Instead, the “controlled by” address is updated. Therefore making provenance explicit within the blockchain token.
How does an NFT work technically?
A minted NFT to the Ethereum blockchain is on the ERC-721 standard that implements an API for tokens within Smart Contracts. The ERC-721 standard provides the basic functionality to track and transfer NFTs.
NFT tokens operate like other crypto tokens. Therefore, NFT artwork can be bought and sold freely on connected Etherium-based exchanges or wallets.
Can an NFT be hacked?
NFTs cannot be hacked individually like an email address.
An NFT is essentially crystallized on the blockchain as code and cannot be modified. The decentralization and distribution over a network tighten the security of blockchain technology versus previous singular digital storage systems. With a distinct point of failure, blockchain is much easier to corrupt.
However, a wallet holding an NFT is vulnerable to a hack. Blockchain wallets and user accounts must be regarded and protected by the account owner as a bank or securities account. Failure to protect your tokens can place unwarranted risk on the account, making it vulnerable to hackers. Your security measures may include using unique login credentials, 2FA (two-factor login), avoiding phishing scams, and keeping critical information offline.
NFT Art FAQs
What NFT Art Sells Best?
Limited access is the common theme across successful NFT sales.
Collection drops typically occur with little warning. Announcements on social media, a newsletter list, or other small groups may go out. If you are interested in an artist, get on their list – follow them on social media and join their mailing list – because a collection can sell out within a few minutes or a few days. Suppose you are not immediately notified and rely on a secondary source. In that case, you will likely find yourself buying from the secondary market at a higher resale rate.
NFT artwork shows that its value is similar to other mediums. Supply and demand drive the factors. For example, popular collections or limited supply editions cost more in the resale realm. NFT pieces are typically limited edition (1, 10, 200, etc.).
What NFT Sold For 69 Million?
A crypto collectible (NFT) called CryptoKitties, a digital cats game valued at $69 million in January 2018. It had 11 million unique kitten variations.
What NFT Did Visa Buy?
Visa bought a CryptoPunk in the cryptocurrency Ethereum equivalent of $150,000. The CryptoPunk is a pixelated avatar of a woman with a mohawk.
NFT Environmental FAQs
The environmental impact NFTs have is constantly changing with technology and how ecosystems are growing.
Are NFTs bad for the environment?
NFTs are not inherently bad for the environment. NTFs are digital assets that live on the blockchain. The most significant factor in its environmental impact is how and where the NFT minting occurs.
A typical example in the NFT environmental debate is Beeple’s $69.3m NFT sale. The creation of the piece used 78,597kg of CO₂ emissions. The NFT was highly unusual because it was 500 works in one, so the file size was enormous. Beeple minted the artwork on the Ethereum blockchain.
The high energy used to mint was by design to secure the system. However, now that blockchains have progressed, different security measures are replacing the high-energy protocols.
The evolution of the security protocols since the Beeple minting has considered the environment. Ethereum sidechains like Palm, for example, reduced overall CO₂ emissions by 99.9%.
Therefore, the environmental impact of an NFT depends on the blockchain. There are currently a handful of environmentally friendly blockchains.
What blockchain uses less CO₂ emissions?
The creation of CO₂ emissions is a constant conversation in the NFT, blockchain, and metaverse worlds. Likewise, technology is constantly changing to embrace a healthier blockchain landscape.
Three blockchains built from the ground up to be sustainable are Palm, Tezos, and Solana.
The Tezos blockchain has a total annual carbon footprint equivalent to the average energy footprint of 17 global citizens. The cryptocurrency on Tezos is TEZ.
A Solana transaction takes less energy than two Google searches and 24 times less energy than charging your phone. Solana’s native cryptocurrency is SOL.
Helpful NFT Articles
What Is An NFT? Non-Fungible Tokens Explained
Forbes
NFTs, explained
Verge
