The fundamentals of non-fungible tokens (NFTs)
On 14th March at Home Grown, Alan Vey, co-founder of Aventus, a layer-2 blockchain protocol, gave a brief rundown of NFTs and blockchains to our guests. It was an incredibly informative session and that has spurred on more conversations about NFTs within the Victoria and Home Grown community.
But there are many out there still scratching their heads and wondering what exactly are NFTs and why are they so popular!?!? Just like cryptocurrencies, Non-Fungible Tokens (NFTs) have been making it’s rounds in the tech community for some time now. But what’s the difference between the both? Here’s a non-exhaustive list on the basics of NFTs.
What are NFTs?
NFTs are non-fungible tokens that come in the form of anything digital sold at a particular price. These digital items can be drawings, pictures, music, memes, physical items made virtual, collectibles etc. At the highest level, most NFTs belong to the Ethereum blockchain. Ethereum is a cryptocurrency just like Bitcoin or Cardano, but it’s blockchain also supports NFTs. Ethereum isn’t the only blockchain and since the rise of NFT popularity, there are other blockchains that implement their own versions of NFTs.
How is it different from cryptocurrencies?
Cryptocurrencies such as Bitcoin and Cardano, are alternative forms of currency used for purchasing items that accept the currency and you can essentially exchange one bitcoin for another bitcoin that are the same. Non-Fungible Tokens (NFTs) aren’t used as a currency and it is a unique cryptographic tokens that exist on a blockchain which cannot be replicated.
NFT Gas Fees
Nope, NFTs are not motor vehicles but there is a charge for users to transact on the Ethereum blockchain. Gas fees are a reflection of the amount of computational power needed to record transactions on the blockchain network. These prices fluctuate depending on the price of cryptocurrency, complexity of a transaction and the traffic on the network. Just like your traffic in real life, if you transact during peak times when there’s a lot of traffic on Ethereum, this will result in higher fees. Ethereum has become more expensive over the years, as the number of users grow but their network capacity is limited. Also, you get charged gas fees for minting and other related actions.
Want to create your own NFT?
The process of creating your own NFT is called “minting”. Minting is essentially publishing your unique token on the blockchain for it to be purchased. You will need a digital wallet that stores cryptocurrency e.g. Coinbase, buy a small amount of cryptocurrency to cover the cost of minting and choose a marketplace that supports the format/type of NFT you wish to sell and for it to be copyrighted. Depending on your marketplace linked to your wallet, you can add your description, name and metadata to your token.
What gives different NFTs its value?
It depends! If the NFT is related to an tangible property such as residential real estate, its real world price is reflected. But if its a digital piece of content, the value is mostly speculative and depends on the market’s supply and demand. One of the earliest NFT collections created on the Ethereum blockchain belongs to CryptoPunks, the images aren’t the prettiest but there’s only 10,000 unique CryptoPunks images which means only a limited group of people can own one. The most expensive CryptoPunks NFT was sold for 124,457.07 ETH which translates to close to half a million pounds.
What’s the latest updates with NFTs?
So what’s going on in the world of NFTs as we speak? Volatility is a lot of times expected with NFTs since it’s value can be largely speculative.. Since September last year, NFT sales have fallen 92 percent, according to new data cited by The Independent.com. So invest, buy, sell at your own risk but remember that setting a certain threshold of risk for any type investments is important.
Also NFTs aren’t a 100% safe from being stolen! Most recently, Bored Ape Yacht Club’s (BAYC) instagram was hacked into and community members re-directed to a fake BAYC website where a fake airdrop was advertised. Airdrops are a marketing technique used by companies to send out newly minted tokens for free to encourage engagement with certain products. When the users connected their MetaMask crypto wallet, the site took out all of their digital assets and relocated it into the hacker’s wallet. The hacker got away with 134 NFTs worth 3 million.
You might be thinking “well, I don’t plan to get anywhere close to NFTs anytime soon and it isn’t related to my job”. Think again, many everyday businesses have hopped onto the NFT trend, Starbucks is launching their own NFT to grant holders access to “Starbucks-related experiences and perks.” They are joined by brands like Coca-cola, Nike etc
To keep up-to-date with all that’s happening in the NFTs and crypto space, we have curated a few events for our Home Grown community of entrepreneurs, investors and business leaders to quiz our brightest NFT experts and learn more about the market and future expectations.
UPCOMING NFT EVENTS AT HOME GROWN
Home Grown x Victoria: Web3 and Beyond Panel Discussion
Monday, 9th May 7:00pm
Featuring our carefully curated team of renowned entrepreneurs, each with invaluable experience in the world of Web3, they will discuss the capabilities of blockchain technology and how best to approach NFTs.
Speakers for the night:
Host Chengxi Wang Chengxi is CEO and co-founder of Miiji, a London-based metaverse startup that creates “instant teleportation” by allowing everyone to be in the same immersive 3D virtual space, no matter where they are physically.
Kirill Tashilov Kirill is Principal at Talis Capital, a London-based venture capital firm that focuses on investments at seed and series A. Prior to Talis, Kirill co-founded a content marketing startup and worked at UBS in Hong Kong focusing on APAC Equities.
Zoë Davis Zoe is an award-winning documentary editor with 20 years experience, working on films for Netflix, BBC, Channel 4, CNN, Al Jazeera and National Geographic. She is also an NFT collector, curator and educator in the Web3 space.
Nicholas Gregory Nicholas is the Founder & CEO of Commerce Block, an infrastructure company that provides a suite of tools for traditional asset markets to leverage the highly flexible and powerful qualities of blockchain-based digital asset protocols.
Vicky Cheng As the Founder of Victoria, Vicky is on a mission to create something truly unique by connecting a like-minded community via curated experiences.
Serhat Aydogdu Serhat is a technology investor fascinated with decentralized finance in its quest to bringing humans right to the centre of finance, with AI / ML due to its power in augmenting human capabilities, and finally with digital commerce as a platform to serve how we consume things in our daily lives.
Wednesday, 18th May 7:00pm
Whether you’ve never heard of them or you’re a full fledged Crypto whiz, we’re sitting you down with some of the leading female NFT curators in the biz to teach you how to get involved in the blockchain world.
We’ll be joined by Leah Sams, creator of Power of Women NFTs and Shreya Bahn, founder of Brushbound NFTs’ who will be taking you through all the things you need to know when it comes to creating your own NFT’s.
Want to join us for these amazing events? Email us at firstname.lastname@example.org
We’ve got another event to update real soon, keep watching this space for a special NFT event on the 1st of June. Details to be posted next week.
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If you’re interested in attending our events and learning more about how our members club can help you grow your network and business, reach out to us at email@example.com
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