What Is an NFT and How Does it Work? NFTs Explained for Beginners
If you bought a digital artwork on the internet for a reasonable price and got a unique digital token to prove your ownership of the work, it would be a dream come true, right? Thanks to non-fungible tokens (NFTs), that opportunity is now available.
NFTs are among the fastest-growing sectors of the crypto industry. They are cryptographically unique tokens that are linked to digital (and sometimes physical) content, proving ownership.
If you’re unfamiliar with NFTs, we’re here to answer some commonly asked questions, including:
- What is an NFT?
- What are fungible and non-fungible items?
- How does an NFT work?
- And much more
Table of Contents
What Is the Definition of NFT?
An NFT is defined as “Cryptographic tokens that exist on a blockchain and cannot be replicated.”
The non-fungible token (NFT) is a unique digital identity that cannot be:
- Substituted; or
This information is recorded in a blockchain, which is used to verify authenticity and ownership.
NFTs have a wide range of applications, including:
- Items of art
- Digitized collectibles
- Music; and
- Video game items
There are different types of NFT data units associated with digital files such as:
- Videos; and
Since each token is uniquely identifiable, NFTs are different from most cryptocurrencies, like Bitcoin, which are fungible.
What Is a Non-Fungible Item?
Non-fungible items are unique and cannot be recreated.
Consider the Mona Lisa. While there are many copies of the Mona Lisa, there is only one original Mona Lisa painting.
Non-fungible items represent real-world objects that are bought and sold online, usually with cryptocurrencies. The underlying software for non-fungible items is the same as that used for cryptography.
Examples of Non-Fungible Items
Non-fungible items are real-world objects such as:
- Baseball cards
- In-game items; and
Imagine a parking garage full of vehicles. The parking garage has hundreds of cars, and you might think there are some of the same — model, make, year, color. But even if two vehicles appear exactly the same, each car has a unique VIN making it an object that can never be duplicated. Therefore, it is non-fungible.
What Is a Fungible Item?
Fungible items are a set of items that cannot be distinguished from one another. A fungible good is an item that can be interchangeably used because it is practically identical to another.
Consider a handful of pennies. One penny looks almost identical to another penny and they’re both worth one cent, but if you look closely, they do have some identifiable differences.
Examples of Fungible Items
Fungible goods include:
- Common shares
- Stock options; and
- Dollar bills or coins
Consider a bowl of rice. One grain of rice is nearly identical to another grain of rice. They are interchangeable, and therefore, fungible.
What Is a Token?
Tokens are non-interchangeable data units stored on a blockchain, a form of a digital ledger that can be traded and sold.
Multiple tokens can be used for a particular digital or physical asset. These include, but are not limited to:
- Songs; and
- Sports highlights
Along with the items listed, a license to use the asset is also included.
Are you interested in sports? ZenSports has created a metaverse known as ZenSportsia.
The ZenSports team is passionate about decentralized finance and gaming. ZenSportsians’ and ZenSports’ NFT marketplaces demonstrate our commitment to decentralization and the movement of money, with a focus on an industry that we can all enjoy — sports and gaming.
Please contact us today to learn more!
What Is Blockchain Technology?
Blockchain technology is a system of recording information that makes it difficult for it to be changed, hacked, or cheated.
Think of blockchain technology as a digital ledger. A blockchain network can track and trade almost anything of value, reducing risk and reducing costs for everyone involved.
On a blockchain, transactions are duplicated and distributed across the entire network of computer systems. Every block in the chain contains several transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to each participant’s ledger.
All users must agree upon a change to the blockchain. This makes hacking the blockchain more difficult.
What Is an NFT? How Non-Fungible Items and Tokens Work Together
The non-fungible item becomes a non-fungible token. Essentially, an object (the non-fungible item) becomes a digital asset (a non-fungible token) that cannot be modified or copied.
The best way of explaining NFT is that they allow you to buy and sell unique digital items.
NFTs can represent real-world items such as artwork and real estate. The act of tokenizing these real-world, tangible assets makes…
- Selling; and
… more efficient while reducing the probability of fraud.
NFTs are valuable because they verify the authenticity of non-fungible assets. This is what makes them unique.
What Is an Example of an NFT?
Non-fungible tokens can represent any asset, including online-only assets like digital artwork and tangible assets like real estate or concert tickets.
Below are examples of some popular NFTs.
Bored Ape Yacht Club
The Bored Ape Yacht Club (aka, “Bored Ape”) is a limited edition NFT collection where the token doubles as a membership to a swamp club for apes.
Your Bored Ape serves as your Yacht Club membership card and grants you access to exclusive members-only benefits.
This NFT collection is built on the Ethereum blockchain. The Bored Ape collection contains profile pictures of cartoon apes generated by an algorithm.
The Bored Ape Yacht Club is in high demand, and they’re worth a lot.
Bored Ape recently offered 100,000 NFTs as “deeds” for virtual land. Seeing that the original Bored Ape NFTs can fetch hundreds of thousands of dollars, cryptocurrency investors lined up to try and score at least one of the 100,000 NFTs in its latest series.
When this happened, the Ethereum Network was overwhelmed, causing fees to skyrocket to astronomical levels.
CryptoPunks are 10,000, 24×24, pixel art images. They are unique, computer-generated characters.
There are plenty of punk-looking men and women, but there are also a few rarer types. There are no two exactly alike, and a single individual can own each on the Ethereum blockchain.
CryptoPunks were introduced in 2017 and quickly became a cult classic NFT. When they were introduced, they could be claimed for free by anybody with a crypto wallet. However, they were all quickly purchased.
A “regular person” would now not be able to purchase CryptoPunks, so instead, they are bought by celebrities and sold through third-party dealers.
CryptoPunks are the OG of the CryptoArt Movement, so owning even one of them and displaying it publicly is a serious flex in the crypto community.
VeeFriends was created by Gary Vaynerchuk and released in 2021.
Being a member of VeeFriends is what makes it valuable — you become part of a club. When you purchase an NFT from VeeFriends, you have direct access to Gary and workshops to assist you with your business.
VeeFriends consists of 10,255 tokens powered by NFT technology. Vaynerchuck will make doodles and drawings for these tokens, serving as redeemable vouchers.
The “Facetime Frog” token provides one-on-one access to Vaynerchuck, while the “Tennis Elbow” token allows the owner to play against Vaynerchuck.
The owner of each token will also have access to VeeCon for the next three years. VeeCon will be focused around:
- Competition; and
- Having fun along the way
What Do the Top NFTs Have in Common?
There is one thing all of the above NFTs have in common: community.
In each of these, people in the digital world come together to create something.
With prices for most NFTs reaching into the millions, these NFTs are very valuable.
What Is ZenSportsia?
ZenSportsia is a new metaverse for athletes of the future.
Imagine it’s the year 2138. Professional athletes (and even amateurs) are nothing less than beasts. The quarterbacks are ripped from head to toe, their biceps are bigger than Joe Burrow’s, and they can run a triathlon on Saturday and play four quarters plus overtime of football on Sunday.
We have a collection of NFT futuristic athletes at ZenSportsia that are …
- Faster; and
… than today’s athletes.
ZenSportstian NFTs are a way for users to earn benefits in the sports and gaming worlds by becoming part of the metaverse community.
With ZenSportsia, you can join a reputable company that you’re familiar with and one that offers a ton of value to the sports and gaming communities.
Interested in getting started? Join us today.
What Utility Does ZenSportsia Bring?
A better question would be, “What does ZenSportsia not provide?”
ZenSportsia NFT offers many advantages, including:
- A monthly prize drawing for luxurious in-person sporting events
- Esports tournament benefits, including reduced entry fees and special rules
- Championship Series of annual esports tournaments with significant prize money
- An exclusive channel on Discord
- Discount fees and increased rewards across the ZenSports betting app
- A global network of exclusive in-person events
- Automatic status at the highest tier at all ZenSports locations and casinos
- Access to the ZenSportsia online membership portal that offers additional sports and gaming perks
ZenSportsia consists of:
- Athletes; and
Whether it be Esports tournaments, Super Bowl betting, or watching future athletes crush it, we love all things sports.
We’re competitive and like to win, but we’re also here to:
- Help each other
- Answer each other’s questions; and
- Improve our gaming skills
Join us in the most inclusive community with a competitive spirit. ZenSportsia is where you belong.