NFT guide for beginners

If you’re an artist or designer by now, you’ve definitely heard about NFTs in some shape or form. Has your curiosity gotten the best of you? Do you have a body of work you wish to get into the form of a non-fungible token? In the NFT guide for beginners, I will dive into the whole gamut of topics you will have to start learning about at least on a surface level to understand how to navigate NFTs and Web3.

What’s an NFT??

With the onset of Blockchain, smart contracts, non-fungible tokens, and a service-based economy, the future of how businesses will do business is about to change. Peer-to-peer economies are also surfacing, and value is being easily transferred between parties. To understand this better, here is some basic information before diving in.

Plenty of blockchain experts will tell you to D.Y.O.R. (do your own research). Which is 100% true. Don’t take my word for any of this. Cross-check sources and information for patterns. Look at how information travels and to who first. From there, you can decipher your own understanding of the word of the cryptocurrencies.

NFT Guide for Beginners, 101

Some of the more basic stuff you’ll need to be familiar with in order to navigate the depths of this space.

Blockchain

Blockchain is a database that can make any transaction transparent, secure, and without needing an intermediary. Blockchains help people share data and transfer value globally without trusting one another. With Blockchain comes a set of standards. These standards set rules around storing data and logic, stateless data communication, and data formats used. Providing a coordination layer for digital assets. 

Visual 101 style guide to blockchain.

Digital assets have no unified standards. NFTs and Blockchain allow for standardization and interoperability. The basic primitives of both are ownership, transferability, and access control. They’re even flexible in that they can be built on top of. Blockchain is the necessary building block of the digital world.

Smart Contracts

Anyone with a heartbeat has recently heard about NFTs and Blockchain. What are these buggers? Where the heck did they come from? Why the fuck do you care? Smart contracts are programs or transaction protocols, like IKEA instructions that live on a blockchain. Based on the contract structure, they’re supposed to automatically do what they do and call it a day.

When the light says go, and predetermined conditions are met, trustless, autonomous, decentralized, and transparent processes are fired off. They run through their routines and execute whatever tasks they are told to do. The thing is, they are irreversible and unmodifiable once deployed. So you need to make sure they’re tested and not full of mistakes.

When carried out this way, there isn’t a need for a central governing authority, legal system, or external mechanism to get involved. Therefore they reduce the need for intermediaries, arbitrations, and enforcement.

Due to its voyeuristic nature, all participants know exactly how the smart contract hangs. Resolving concerns around the outcome, fraud losses, and reducing malicious and accidental scenarios. These dossiers allow for exchanging money, property, shares, or anything of value in a distributed, decentralized manner, bundled into decentralized applications (dApps) to execute more complex functions.

You can learn more here.

Short diddy on smart contracts.

Did You Know?

This wouldn’t be a solid internet article if I didn’t mention the vending machine example. Vending machines are considered the first example of a smart contract. Rules are programmed into a device selecting a product pressing a number. From there, you insert coins, and the machine checks if you inserted enough money. Automatic vending machines slashed transaction costs and expanded service, offering 24/7 availability. 

NFTs

NFTs are a technology that’s existed for a long time. NFTs are a mechanism that can change how we do business, transfer ownership and revolutionize markets. An NFT or non-fungible token is something that is not as easily exchangeable. It’s a mutually identical item that can’t be easily replaced because it’s typically something unique. NFTs are used for various applications from collectibles, in-game items, digital art, event tickets, ownership records, albums, and more.

The basic structure of NFTs or non-fungible tokens starts with the relationships. There are at least two parties, sometimes more involved. There’s a connection between the hosts, creators, buyers, and/or sellers. The connecting point between the two parties is a token. A token represents a set of keys and signifies ownership of the associated content. The content within an NFT is a file consisting of metadata. Metadata is a list of everything. Full explanations, associations, and relationship descriptions. Think of it as a manifest.

In that manifest is the asset associated with the token and where it’s located. There are also rules regarding licensing and requirements related to purchasing, licensing regulations, and royalties payments.

NFT History

In 1993, Hal Finney made remarks explaining a new type of currency. Crypto trading cards. They would be scarce, exclusive, and come with provenance. It was an idea that conveyed the concept of digital cash. Initially a joke, it was the first-ever explanation of NFTs or non-fungible tokens. Little did Finney know that what he said would be some of the main aspects of NFTs, digital signatures, rarity, and trading.

Moving on to 2012, when mention of the idea was brought up once more. This time is attached to real-world examples such as real estate, commodities, and bonds. Brought forth by Yoni Assia, it was known as colored coins. Starting as ordinary bitcoins that were transferred in a Genesis transaction. Originally designed to be a currency, its initial use cases ranged from property to digital collectibles. They even allowed for the storage of small amounts of metadata. 

The problem, however, was that colored coins only worked if all parties involved believed in their value. Kevin McCoy & Anil Dash dreamed of a world where artists would get paid for their works and collectors could feel secure in their transactions. This vision was known as the “monetized graphics” system. On May 2, 2014, “Quantum” was “minted” on the Namecoin blockchain, and a form of the NFTs was created. 

NFT Use Case

Known primarily for their association to art, believe it or not, there are several adaptations and innovative NFT use cases emerging. In 2020 and 2021, the world was taken by storm. Digital art gained a resurgence. Industries and experts are starting to understand the underlying concepts. They’re beginning to grasp blockchain technology and how NFTs can be applied to various applications. 

Companies, corporations, and the military have been heavily linked to the invention of the computer. They’ve also been heavily related to the research and application of this technology, leading to a massive wave of adoption. NFTs, let enterprise corporations create digital assets. These digital assets can be programmable, unique, and liquid. That means that they can keep pushing the envelope and help fund innovation.

You can learn more here.

NFT Types

NFTs or non-fungible tokens come in various shapes and sizes. The different types of NFTs range in use cases and are only just beginning to take form. If you’ve heard of them more recently and around the time of writing, then you’re probably only familiar with the hype and extravaganza surrounding their association with digital art. NFTs have been around for a while. 

Some of the current use cases are:

  • Trading Cards
  • Collectibles
  • Gaming
  • Art
  • Sports
  • Metaverse
  • Virtual Fashion
  • Domain Names
  • Memes
  • Music and Media
  • Events / Event Ticketing
  • Real-world assets
  • Identity
  • Finance / Insurance

We’re just now being granted access to this military-grade technology. It’s been around for a long time in laboratories and research centers under careful watch. As more and more people begin to understand the technology and ideas behind it, there will be more innovation. There’s no telling what kind of products or applications can be built around this technology.

NFT guide for beginners, NFT Ecosystem

The NFT ecosystem is an evolving space. Capturing the imaginations of technologists, educators, investors, and evangelists alike. Made up of a decentralized community. The NFT ecosystem consists of Layers Zero, One, and Two. Each layer serves a purpose and allows the layer on top to operate. Some additional layers and side chains enable the functionality and operation of necessary aspects to run smoothly. 

NFT guide for beginners looks at the nft ecosystem from messari
A diagram of the NFT ecosystem created by Messari Research.

Layer Zero

Layer Zero is a layer that actually sits between blockchains. When mentioned, it’s referring to the connectors that link blockchains together. These links allow for the passing of information between one another. This passing of information is also known as interoperability. Having links like this in place makes it easier to scale new technologies. Polkadot and Cosmos could be considered Layer Zero or para-chain applications.

Layer One

Layer One is the bedrock of the NFT ecosystem made up of the central blockchain architecture. Bitcoin was the first Blockchain and the original platform for early NFTs. The game was changed when Ethereum and decentralized apps came to market. Challenges with Bitcoin being a proof of work system were alleviated. Ethereum offered a new protocol, proof of stake. Making transaction verification and solving puzzles easier. But problems still persisted. 

Layer Two

Layer Two blockchains and solutions help increase the speed of lower-level blockchains. They help make processing transactions faster. They also help with the storage of data. Layer Two is an overlaying network of applications on top of the underlying Blockchain. Stateless channels like the lightning network act as two-way communication channels between participants. 

Once we start to develop on top of Layer Two applications, we begin to see a divergence in the directions the space is growing. Storage solutions, verticals, applications, financialization, aggregators, and front-end interfaces are part of the evolving and growing NFT ecosystem. Each of these layers adds additional functionality and use cases.

  • Storage
  • Verticals and Applications
  • Financialization
  • Aggregators, Front-ends, and Interfaces

The NFT ecosystem is consistently growing and will evolve as more and more people recognize the use cases and ways underlying technology can drive industries forward. With the adoption of non-fungible tokens in enterprise settings, we expect this list to be multiplied shortly.

You can learn more here.

How to get started buying

Many people have flocked to this space solely as a collector. In fact, collectors are the ones driving the market. To buy and sell NFTs, you’ll need an account on a marketplace as you would as a creator. That account will require a wallet. The most popular one is Metamask. Some marketplaces require a small transaction for authentication purposes, so you’ll need some ETH or whatever coin that marketplace accepts. You’ll also want to pay attention to drop calendars to try and spot collections before they moon!

To purchase coins for use in buying and selling NFTs, you’ll require an account on an exchange. Coinbase is the most popular and one that I use. At the exchange is where you’ll buy the ETH and then transfer it to your Metamask wallet. You’ll use your wallet’s hash to send your cryptocurrencies for trading. Once it’s in your wallet, buying and selling are as easy as going to your preferred marketplace and making a purchase. Once bought, a confirmation will appear, and you’ll now be the proud owner of that NFT.

How to get started creating

To get started creating NFTs, it’s actually quite simple. You really only need one of the file formats that a marketplace requires. All you have to do is create an account, follow the steps in the user interface, upload your work, and voila, an NFT is created. If you want to take it a step further and really explore the boundaries of NFTs, then you’ll want to get creative with your approach. Digital artists from all different disciplines are flocking to the NFT space because of its flexibility and low barrier to entry.

No voice over. Really quick brain download. Nice jazzy tune.

Many NFT artworks can be created by numerous methods. From traditional drawing and painting styles to more stylized computer-based art all the way to complete computer-based generative art and so on. The possibilities are really endless. I highly suggest just browsing the marketplaces to see what’s possible. I also highly recommend google the programming languages used to create NFTs and intelligent contracts.

Core team needs:

  • Growth and marketing
  • Artists and designers
  • Software developers
  • Teams of 4+

NFT community

Community building is one of the most significant parts of NFT success in my ultimate guide on promoting an NFT. That’s because to really propel in space, you need to connect. Conversations are happening all over the internet right now regarding NFTs. Most of the action happens online in server rooms or on social media.

Top NFT communities

  • BitCoinTalk
  • Telegram
  • Discord
  • LinkedIn
  • Facebook
  • Twitter
  • Instagram
  • Reddit
  • Medium
  • YouTube
  • Quora
  • Clubhouse
  • Steemit
  • NFT resources

How to market your NFTs

First and foremost, to understand how to market NFT art, you’ll need to know that this is business. Therefore understanding the very basics is probably a good start. You don’t need to form a corporation to begin creating NFTs. You can simply make them for fun, but the key concepts that drive markets should be understood.

You can spend years going to school or at least a few hours to watch some videos on the subject. A general understanding is usually a good idea. The more you learn, the more you earn.

Business 101. EZPZ.

For an additional crash course, I’d recommend reading The Ten-Day MBA. This will give you perspective inside the minds of top business leaders, their thinking, approaches, and how business people can validate ideas quickly.

The real meat and potatoes of this article are around marketing and market-making. How to market NFT art solely relies on your ability or your team’s ability to get to market first and attach ideas to a word in your customer’s minds. If you want to get a good idea of what I mean, I suggest reading the 22 Immutable Laws of Marketing.

In this book, the authors look at marketing for what it is and use those immutable laws to position yourself for success. Overall thought marketing your NFT collection relies around the following concepts and your ability to execute on them.

  • Build a community
  • Create hype
  • Spread the word
  • Pick a market

Be unique, have a way to stand out, identify an audience, build a community, figure out what part of the market you can address, lay a foundation, have a plan for scale, have a marketing plan, consistently execute on that plan, tweak and adjust as you go along, keep adding value, interact and engage with the community, share and provide insight, nurture your relationships, reach out for help where needed and always stay focused on your goals no matter how hard they might seem.

Tips:

  • Ask for help
  • Build a team
  • Learn often
  • Accept failure
  • Think big
  • Be fearless

For more information on NFTs, look at some of this information below.

Videos:

Gary’s take on the Great NFT guide for beginners.
Another great NFT guide for beginners approved video.

Articles:

Top-selling NFTs

NFTs have made the news time and time again for their record-breaking sales. Here’s a list of some of the top-selling NFTs and what they’re going for. You can easily see that this space has a lot of growth potential.

10 Top selling NFTs

  • Everyday’s – The First 5000 Days: $69,000,000
  • CryptoPunk #3100: 4.200 ETH $7,580,00
  • CryptoPunk #7804: 4,200 ETH $7,570,000
  • Crossroads: $6,600,000
  • Doge: 1696.9 ETH $4,000,000
  • The First Twitter Tweet: $2,900,000
  • The Best I Could Do: ($1,650,000
  • CryptoPunk #6965: 800 ETH $1,540,000
  • Axie Infinity Virtual Game “Genesis” Estate: $1,500,000
  • Auction Winner Picks The Name: $1,330,000

NNFT guide for beginners to Popular NFTs

As you can see the NFT guide for beginners is only scratching the surface. This is a massive industry yet to fully mature and become what it can be.

Need help with smart contracts or NFT collections?

If you’d like to collaborate on a project or are interested in assistance feel free to reach out.

Contact me today!
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Categorized as Crypto

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