Answers to 21 NFT Questions That Even Your Grandma Can Understand
Would you ever pay more than $3.4 million for something that doesn’t exist in the physical world?
We know what you’re thinking. First of all, where the hell would you get that sort of money? Secondly, what’s worth that much that you cannot touch or eat?
This is exactly what happened in March this year with perhaps the most famous NFT brand, Bored Apes Yacht Club. But brace yourself: while BAYC may be well known and steadily getting a cult status, that’s not the most expensive NFT sold. Not by far.
Given the fact you’re reading this, you likely fit into at least one of the following categories:
- You understand that there’s big potential in becoming a part of the NFT craze, but you don’t know where to start
- You’ve been reading about web 3.0, NFTs, and digital real estate, and you get that there’s a massive shift happening, but everything’s too abstract for you still
- You’re an artist or a brand that knows what they want to do, but you lack the expertise to get from point A to point B and make it happen
This is why I decided to create a beginner-friendly guide to NFTs that even your grandma can understand. Well, maybe a tech-savvy grandma. Since I’m running a local Discord server about NFTs, I’m swamped with a bunch of questions from newbies wondering how they can begin and succeed with NFTs. So let’s find out what puzzles an average Joe about this topic.
Let’s start by agreeing on the definition.
1. What Are NFTs?
NFT is an abbreviation for “non-fungible token.” But that doesn’t tell you much, does it? Ok, let’s give it another go.
Non-fungible = something that is unique and one of a kind.
For instance, bitcoins or regular currencies are considered fungible. Trade 1 bitcoin for 1 bitcoin, and you’ll have the exact same thing. Trade $10 for $10, and again – the exchange is useless.
BUT if you trade a one-of-a-kind Van Gogh for a Gauguin, you’ll get something quite different. Nobody owns it but you.
To summarize: NFTs are unique art projects or art collections on blockchain that you can buy or sell for cryptocurrencies. Ergo, non-fungible.
The easiest way to think about NFTs is to understand they function very similarly to real-life art auctions.
2. Why the Sudden Craze About NFTs?
I’m not going to lie, it’s primarily about the money.
If you look at the profile of people who are most active around NFTs, it’s mainly young people, around 25 years old, who are clever enough to take advantage of the current hype. They realize now is the time, they are very agile and creative, and they know the value of making connections and growing a community.
The truth is, if you make a brand of your NFT collections and invest time and effort to advertise it, people will start noticing it. NFT creators can make an immediate profit. If the collection is a success, it can quickly raise a value of up to $2 million.
Then it’s also about taking part in building the crypto economy through art and creativity.
3. Are NFTs Just Going to Fizzle Out After a While?
That’s a tricky question. Some say yes, others see NFTs as an integral part of future investments. I’m in the latter group. I see NFTs and crypto as the future. The “Holy Trinity” of the tech future seems to revolve around NFTs, Web 3.0, and the (in)famous metaverse.
4. Metaverse…? Web 3.0…?
Do you remember this photo from five years ago?
When it appeared, the mass media called it “creepy,” “disturbing,” and “uncanny.” Mark Zuckerberg was the focal point of articles discussing our dystopian future. But we seem to be getting there, and it’s fun for many people.
To put it bluntly, the metaverse is a place parallel to the physical world we all know and live in – and that’s where you can spend your “digital life.” You would have your own avatar and interact with other people’s avatars. As VICE pointed out, many say metaverse is like a 3D model of the Internet.
So, in web 1.0, we had the Internet, which forever changed the speed of information and enabled us to enter a new era of globalization. Web 2.0 redefined how people buy, connect, and communicate with one another – primarily through eCommerce websites and social media platforms.
Web 3.0 is about connecting people, places, and things. Sometimes they are in an entirely virtual environment, or they can be in a physical world (sort of), thanks to augmented reality.
If you analyze this evolution of the web, you’ll understand the craze about the above-mentioned “Holy Trinity”: early adopters always get a competitive advantage.
Btw, this might be an excellent opportunity to remind ourselves of a very sad tweet:
Ah, that poor guy.
In a nutshell, the markets change all the time, and those who take a calculated risk early on (or at least invest an effort to start learning from the very beginning) – are those who will gain the most.
5. Isn’t it Crazy That Digital Art Sells for Millions of Dollars?
Just like with any form of art, the value of NFTs is defined by society and culture. When you look at it from that perspective, it’s nothing crazier than giving millions of dollars to buy traditional art. And if you’re one of those “well, I could have drawn that” type of person that looks down on modern and abstract art, then we have some good news: you too can create whatever you want.
Speaking of seemingly arbitrary evaluation of art, there’s an intriguing documentary on Netflix called “Made You Look: A True Story About Fake Art.” It explores the largest US art fraud, the desire to possess extremely rare and expensive pieces of art, and the personalities of billionaires who perceive art collection as an essential element of prestige.
However, it may be a good time to underline one thing. When you buy an NFT, you don’t buy the image and artwork per se. You buy the hash token on the blockchain. This ownership allows you to trade NFTs and earn money. The metadata on the token cannot be erased or altered just by anyone. That’s the beauty of blockchain.
6. But Wait, What Prevents Me From Just Right-clicking and Saving Any NFT?
Nothing prevents you from downloading the photo of the Mona Lisa in high resolution and printing it on high-quality canvas, but even if you do that – you still won’t own a Da Vinci (sorry).
7. Hey, That’s Not Really the Same Thing… Is it?
Well, not entirely, but it’s similar enough for you to get the point. So, anybody can view and download an image, but you still won’t be the owner of it because you don’t own the NFT. This means you cannot earn any money from it.
Anyone can copy the digital file, but no one cannot copy NFT. NFTs are embedded in the blockchain (in most cases Ethereum and Solana), so that’s how the valid owner gets identified.
Bear in mind that some people simply crave ownership over digital assets. It may seem irrational, and you could probably name at least a dozen of different ways how to invest that money wiser. But that’s the world we live in. Here’s an example.
Sina Estavi, CEO of the blockchain company called Bridge Oracle, has recently purchased the NFT of the first tweet by Twitter’s co-founder Jack Dorsey. And get this – he paid $2.9 million for it. Bam. BUT, despite his intention to flip it and earn great money for it, the highest bid he received was around $14,000. *sad trumpet sound*
8. He Bought a Tweet?! What the…
Technically, he didn’t buy a tweet. He purchased an NFT of the first tweet ever written by the co-founder of Twitter.
We know it’s a tough pill to swallow, but you have to understand that Mr. Estavi didn’t actually buy a screenshot. He purchased a one-of-a-kind digital certificate of the tweet that the NFTs creator has signed. So, it’s sort of like a digital autograph.
9. Besides Money, Why Are NFTs Important?
NFTs are actually about investing in cryptocurrencies, but they make things a lot more interesting and exciting because there’s that visual moment in the form of art that resonates with people even more than just trading cryptocurrencies.
When you think about it, NFTs are perhaps the biggest confirmation that artists have a place in this world and can monetize their art massively. Web 3.0 seems to be opening doors to new levels of respect for artists, combined with the tech craze and movement. In an ambiguous way, NFTs unite the idea of community and decentralization of art but also communicate with elitist groups, which are defined by wealth, status, and forward-thinking.
10. OK, OK, Back to Money. What is the Business Potential of Investing in NFTs?
I believe it’s huge, but it doesn’t mean it’s a sure thing. Just like with any investment, you need to take into account a variety of factors. A non-specialist might glance over the news about NFTs and conclude it’s all about some stupid little pictures. But some people discarded dial-up Internet once it appeared and thought social media wouldn’t last. And look at us now, eh? Many are technophobes by nature.
See Pessimist Archive for historical context and interesting examples.
11. What is the Best Website for Evaluating the Rareness of an NFT?
12. Can You Explain the NFT Ecosystem a Bit More?
If you own some cryptocurrencies, you cannot really flex it. Sure, you can put BTC or ETH on your plates to indicate that you’re a fanboy. But with NFTs, that changed. People started putting valuable NFTs as profile pictures across social media, and some of the most popular collections started producing merchandise. There are many bridges between the digital and offline world.
You see, NFTs are like status symbols. It’s not that different from staying loyal to Apple tech and letting everybody know or putting your BMW car keys on the table.
Sure thing. People who buy or trade NFTs are people who know the laws of the crypto world. They also like collections of all kinds. Why? Well, so that they can flex (duh).
13. What’s the Typical “Origin Story” of NFT Projects?
Generally speaking, you create an NFT project with a higher goal in mind. In most cases, they are art projects born out of enthusiasm with the goal to become a brand.
In the beginning, everything was on the Ethereum, but now it’s also available on other blockchains. All NFT projects have their own communities on Discord and Twitter, and creators want to grow and expand them. The hype created around collections is what will ensure better exposure and higher value.
It’s marketing 101.
You are creating a brand from scratch and monetizing on your brand equity.
Solana is a blockchain that stands shoulder to shoulder with Ethereum. It is a home for projects that not only look visually good but also add a new layer of utility to their holders in the way of passive income. Depending on how popular the collection is, it can go between a few dollars up to thousands of dollars per month. Plus, some collections offer specific benefits to the holders, such as VIP entries to events and festivals, discounts in head shops, etc. It’s like you’re buying your way into a special, prestigious circle of people.
14. So, How do You Create NFTs?
You mint them on the official website of the project or the dedicated launchpads.
Mhm. So, minting an NFT is the process of converting digital data (e.g., your fantastic illustration) into crypto collections or digital assets recorded on the blockchain. As a person who mints, you are the only real owner of the NFT… Until you decide to sell the NFT and transfer ownership.
Here’s how it usually goes. A team of people (or a solo player) comes up with an idea and starts making an NFT project. The concept can be literally anything: from digital art and tools to some type of metaverse integrations, games, etc.
The project’s success is determined not only by the quality of the NFT illustration but also by the community that supports the project, the competency of the team behind it, the general roadmap, etc.
16. Where Can I Find the Official Websites for Minting?
You always mint on the project’s official website that gets shared on the verified Twitter profile or a Discord channel. There you can find announcements for minting dates and times. They typically share a link at the exact time minting starts.
17. What Do I Need in Order to Mint? How Much Will it Cost Me?
Personally, I’m a fanboy of Solana’s NFTs and mints. If you’re looking to mint on the Solana blockchain, you need a Solflare crypto wallet, and you have to deploy some SOL in your wallet (Solana’s cryptocurrency) for the minting process. The minting fee will always be announced beforehand by the project team, but you need to consider that 0.01 SOL goes to gas fees.
If you are minting on the Ethereum, you need to pay the minting fee plus anywhere between $100 and $300 for gas fees (yep, that’s how the cookie crumbles with ETH).
18. If I am Not Minting, Where Can I Buy or Sell NFTs?
19. Which NFT is Worth the Investment?
There’s no way we can guarantee if something will pay off or not. Typically blue-chip projects (so, the ones that ramped up big success in the meantime) are the ones that cost a lot, but they do show growth tendencies. Take BTC or ETH, for example.
Of course, make sure you do your own research (DYOR). This means you find a project on Twitter, you follow it on their official Discord server, you invest some time to read and understand their roadmap, you follow the announcements, and you engage with the community. Only then will you be able to estimate whether or not a certain project will be successful.
Or maybe not.
20. I Thought kaiserbold is About 3D Rendering and Archviz - Not NFTs. What Gives?
Well, we started testing the waters. Not long ago we even landed our first NFT project for Robot Mafia Club. At the moment, they have a collection of 777 NFTs, and they are mostly 2D. Our mission is to turn all of them into 3D. We are now discussing how to do this in the best possible way, so stay tuned!
Here’s a sneak peek for you:
We know. IT IS FREAKING AWESOME!
Since we boarded the NFT craze train, I noticed a few NFT projects that I believe were created by 3D artists who work in the archviz industry. Think cute mini buildings or isometric apartments. My two cents are that these might become a part of a certain property in the metaverse. How and what the metaverse will look like, nobody knows right now…
I would say that I’m currently the biggest NFT enthusiast among the kaisers and I’m slowly onboarding the rest of the crew. I realized that people who run or would like to start an NFT project typically have an idea but lack the expertise to make it happen. Plus, in order to make it happen, they need a blockchain developer(s) and some illustrator or graphic designer to work their magic.
Most of the NFT projects are somehow flirting with the metaverse because digital assets and digital property are necessary for people to socialize and enjoy the digital universe. Besides, many NFT projects that are currently 2D illustrations have the creation of a 3D collection in their roadmaps.
That’s where kaiserbold steps in.
21. So, Are You Saying That kaiserbold Can Help Me Make an NFT?
Not to toot our own horn, BUT – when you know how to do 3D on a high level as we do, the limits exist only in your mind. We can make whatever we want in 3D. Or even in 2D.
All you need is:
- an idea,
- some cash to pay us,
- and a bit of courage to approach us.
However, everyone is still a bit puzzled about metaverse. We too struggle to understand the point of putting on a VR headset and entering an alternative digital world. We are still figuring things out, which is the only reason we haven’t launched our own NFT collection yet. But what we are 100% sure of, is that we have the skillset needed to create an NFT according to the client’s brief.
NFT as a service? Why the hell not. If you’re looking for a partner, send kaiserbold a message.