Obaba Museum

If you’re sick of hearing about the NFTs, you’re not alone; I’m so tired of the ‘overhype’ that’s why I decided to undertake my own research and simplify it so that even people with non-technical knowledge can grasp it.

So, what exactly is NFT?

 It means Non- Fungible Token. Something that is non fungible cannot be replaced, recreated, or copied by another person.
The majority of us assumed NFTs were all about images, and we were accurate. NFTs, on the other hand, cover all types of digital content, including movies, audios, and images. Let me now provide a lengthy explanation.

NFT (Non Fungible Token) is a unit of unique data that uses technology ( based on unique data identification) to enable digital assets (films, games, photos, audio, and so on) to be saved, recorded, and validated on crypto currency blockchains, especially the Ethereum blockchain.

What’s Blockchain?
Blockchain is a way of recording information in a way that makes it difficult/ impossible to change, hack, or cheat the system.

There are two things we usually talk about when discussing NFTs; Smart contracts and Assets.

Smart contract
Imagine you design a program and you give it an instruction to send your images to your client only when they pay 50$. This is an instruction set and the program won’t initiate any transactions until that requirement has been met. This is almost how a Smart Contract works.
A Smart contract is a computer program that automatically carries out (execute in technical language) instructions, or documents important actions according to the set ‘Terms of contract/agreement’.

Assets
This could be regarded as the digital product itself, do I really need to explain further 🤔?  Okay, it’s usually regarded as the art; usually NFT creators are called artists and their artworks are the most common product sold on the platform.

Note: Only the smart contract is stored on the blockchain, the artwork/asset isn’t because storing that much data is too expensive and requires much labor.

What Makes NFT So Funny – It’s how they operate, which leads to the next question.

How do they function?
The content/asset is owned by the person who purchases the non-fungible token, yet it can still travel through the internet. An NFT can gain popularity in this way since the more it is seen online, the more value it creates (that’s what they said o). When the item is sold, the original creator receives a 10% cut, with a tiny portion going to the platform and the rest going to the current owner.
On an NFT marketplace, creators mint their works such platforms include; Opensea, superRare, Foundation etc.

The act of minting is the creation of a smart contract on an asset, such as NFT, which will be stored in the blockchain. The smart contract:

1. identifies the creator of the artwork;

2. ensures that the artwork’s creator and other parties are paid royalties each time it is sold.

What are the sources of income for these platforms?
The smart contract provides them with a modest percentage of royalties. This method, however, is not without flaws, and some parties may end up with no royalty.

Relevance of NFT
Its main importance is that it makes owning and selling digital contents easy

Obstacles and Challenges

1. Minting Fees: The cost of minting an NFT as an artist is pretty high, and guess what? The cost of minting rises as the Ethereum network becomes more crowded and more labor is required.
Gas fee is the financial expense of this effort.
It currently costs between $60 and $150, depending on the complexity of the project. On average, it costs around $70.
Platforms like as Polygon have recently opened up options for something called Lazy. minting. This minting may be done for as little as $5, but there are other stories to go along with it.

2. Theft: some artists who chose not to generate NFT or who lacked the resources to do so have had their work minted by unknown parties, and only a few sites truly authenticate the originator of a piece before selling it.

3. There is inadequate data to determine if NFTs assist only a select few or the entire population.

My next article is going to be on the difference between NFT and Crypto currencies. Thanks for reading through, hope you enjoyed the ride🤗. Let’s know what you think in the comments.