OneOf—NFT 101
What’s an NFT?
Let’s start at the very beginning. WTF is an NFT?! 🧐 Well… something that is “non-fungible” means it’s unique and non-interchangeable. A “non-fungible token” or “NFT” is a unique and non-interchangeable digital asset where ownership is recorded and tracked on the blockchain.
An NFT could be any kind of digital file like art, music, or videos. For collectors, NFTs are just like baseball cards, but because they’re digital, you can’t hold them in your hand! At OneOf, we create NFTs on energy efficient blockchains like Tezos and Polygon. But more about that later…
TIP OF THE DAY: Think of “non-fungible” as a concert ticket with assigned seating and location. It’s NOT interchangeable with other tickets. On the other hand, something that is “fungible” is like a General Admission ticket that IS interchangeable (and equivalent to) other General Admission tickets. You’re welcome! 🙂
What’s Cryptocurrency?
Let’s take the cryptic out of crypto! 😅 Cryptocurrency is decentralized digital money that’s based on blockchain technology. Unlike USD, crypto doesn’t rely on banks to verify transactions and there’s no central authority that manages and maintains its value.
Cryptocurrency is stored in digital wallets and works on a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions.
FUN FACT: Established in 2009, most people have heard of the first ever cryptocurrency, Bitcoin. Today, there are literally thousands of different kinds of cryptocurrencies… and some with rather interesting names like: Pizzacoin, Garlicoin, and errr… Coinye. 😶
What’s Blockchain?
In simplest terms, a blockchain is a block or ledger that records a chain of events. 🤓 You wanted 101… You got it!
Yes, blockchain is a system for securely recording and storing information and transactions in a database that is duplicated and distributed across a network of computer systems. Whether an asset is “tangible” (like a house, car, cash, or land) or “intangible” (like intellectual property, patents, copyrights, or branding) — virtually anything of value can be tracked and traded on the blockchain.
FUN FACT: Blockchain technology is so versatile it can be used for recording much more than just financial transactions. For example, medical records, housing deeds, and marriage certificates. Which blockchain would you like to get married on? 💎
What’s a Crypto Wallet?
Yup! It’s just as it sounds. A crypto wallet is just a digital wallet that “holds” your crypto and NFTs. 🕺🏻 More accurately — it’s the address on which your buying and selling of crypto and NFTs are recorded on the blockchain.
Technically, since your crypto and NFTs exist on the blockchain, the wallet software merely allows you to interact with your coins and assets — whether it’s just being able to see them or to move them around to different addresses.
FUN FACT: To purchase NFTs on OneOf you don’t need your own crypto wallet! Your NFTs are kept safe in the OneOf Custodial Wallet which is secured by our custody bank partner using FIPS Level 3 certified Hardware Security Modules protection. In other words, they’re SAFE! 🔒
What’s an NFT Drop?
You’ve probably heard of a new sneaker or a new music album “dropping”. 💿 Same thing goes for NFTs. An NFT drop is simply the launch of a new project. When an NFT collection “drops”, it’s generally the time and date the NFT minting happens and the NFTs become available to the public.
Many NFT drops have purchase limits which restrict the number of NFTs people are allowed to mint/buy in one transaction. Since scarcity is often equated to value with NFTs, collectors often watch for upcoming drops in order to be the first to purchase.
TIP OF THE DAY: At OneOf, we announce drops on Discord, Twitter, and Instagram. Never heard of Discord? Check out the OneOf Discord here. It’s where the OneOf fam hangs out and talks NFTs! 🤙
What’s Minting?
No need for fancy talk ‘round here! 🤌 “Minting” is just an elaborate way of saying “storing on the blockchain”. Minting an NFT involves validating information, creating a new block, and recording that information on the blockchain.
If an NFT is a blockchain-based token that proves ownership of digital items (such as an image, music, or video file), to “mint” an NFT, you’re simply converting those files into digital assets stored on the blockchain. Minted NFTs that are stored on the blockchain cannot be edited, modified, or deleted.
DID YOU KNOW?: During the minting process, NFT creators can schedule royalties from subsequent sales so they get a percentage of profits each time the NFT is sold on the secondary market. Pretty neat, huh? 👏
What’s the Secondary Market?
This one’s pretty self explanatory and it’s where the magic really happens in NFT land! 🙌 After an NFT has been minted and sold, the owner of the NFT can go on to re-sell it on the “secondary market”. Which means, both creators and collectors can continue to harness the powerful ongoing potential of NFTs.
Although not guaranteed, the possibility for higher ROI (Return on Investments) over time is possible, and thanks to a few simple lines of code, artists can get a portion of all future sales of their work, in perpetuity.
TIP OF THE DAY: When you’re first starting out, choosing which NFT to buy on the secondary market can be daunting! We advise to just go with whatever interests you, allowing you to first learn and understand the process. 🧑🎓
What’s Utility?
Utility refers to when an NFT assigns a use to the digital asset outside of just owning the digital asset. For example, utility can be defined when someone receives a physical piece of art that matches the NFT they purchased. It could be special access to an event, exclusive membership to a club, or even future use in the digital world or the “metaverse” — especially within the gaming subset. 👾
NFTs with attached utility are becoming increasingly popular because they provide the NFT with added value, generally making it a more desirable asset to not only own but resell.
FUN FACT: Utility attached to some recent OneOf drops have included 10% royalty ownership to an artist’s song and chances to win VIP tickets to the GRAMMY Awards®! Not bad, huh? 🤩
What’s a Smart Contract?
Woohoo, who’s feeling like a smart cookie, now? Speaking of “smart”, let’s talk “smart contracts”. Smart contracts are one of the most powerful features of blockchain technology and are essentially digital contracts (software code) that allow the network to store the information (terms of agreement) between users. Smart contracts are central to the functioning of NFTs and are completely transparent and immutable.
Smart contracts hold digital assets like NFTs and cryptocurrencies within them that can be distributed upon execution when a set of conditions are met based on the code defined in the contract.
DID YOU KNOW?: Smart contracts are so versatile because they can execute almost instantly — making them perfect for the financial sector and the crypto and NFT space. The space you’re in now! 🥳
What’s the Metaverse?
If you haven’t heard of the “metaverse” you might really be living under a rock! 😆 First coined in Neal Stephenson’s 1992 science fiction novel “Snow Crash”, metaverse referred to an immersive, virtual reality world in which people were embodied as their avatars.
An ever-evolving web of interconnected virtual worlds, in the “metaverse” anyone or corporation is able to put a virtual world online for other people to teleport to and exist in. Some revolve around gaming, some business, and many are social worlds that can incorporate NFTs — of course!
FUN FACT: With revenue opportunities built around live events, entertainment, and social ads, it’s projected the metaverse could become an $800 billion market by 2024! Mind. Blown. 🤯
About OneOf
Deeply committed to a sustainable and inclusive blockchain future, OneOf is a platform that supports NFTs on multiple energy-efficient blockchains, connecting fans and collectors to iconic musicians, athletes and brands. OneOf aims to bring the next 100 million non-crypto-native fans into Web3 by removing the technical frictions and allowing fans to pay for their NFTs with credit/debit cards as well as major cryptocurrencies. Minting an NFT on OneOf’s platform uses up to 2 million times less energy than proof-of-work networks, and for its users, purchasing NFTs costs $0 in blockchain gas fees. A leader in diversity, over 80% of the collections curated by OneOf come from minority or female creators. Visit oneof.com for more information.
