Even if you hate or don’t understand NFTs, it’s worth paying attention to. Non-fungible tokens (NFTs) have been the hottest trend for the past couple of months. We talked a bit about NFT in Tokens: Next Generation Capital.
We are seeing headlines about people making tons of money from selling NFTs. Many of us still don’t really understand what an NFT is. The creator of Bitcoin would have probably never guessed that the world would trade digital assets as NFTs. NFT is the latest trending iteration of blockchain.
What is NFT and how does it work?
Okay, let’s start with technical basics.
Most NFTs are part of the Ethereum blockchain (network) as at the time of this writing. Ethereum is a cryptocurrency like Bitcoin, but its blockchain also supports these NFTs. NFTs store extra information, which makes them work differently from, say, an ETH coin.
ETH coin works with ERC-20 Token Standard, while NFTs work with ERC-721 Non-Fungible Token Standard. The ERC-721 is better known as the solution for the creation and transfer of non-fungible tokens. These standards are sets of rules that are chiefly defined for standardization and interoperability. Trust me, you want crypto developers to speak one language.
ERC-20 Standard (regular tokens): A standard interface for fungible (interchangeable) tokens, like virtual currencies, staking tokens, or voting tokens. E.g Bitcoin (Cryptocurrency)
ERC-721 Standard: A standard interface for non-fungible tokens, like collectible items, a song, or a deed for artwork. E.g Bored Ape (NFT)
Nontechnical definition
NFT stands for “Non-fungible token.” “Non-fungible” somewhat means something that is unique and can’t be replaced with something else. A Non-Fungible Token (NFT) is used to identify something or someone in a unique way. An NFT can also be defined as a cryptographic token that defines an asset uniquely. For instance, a bitcoin is fungible; that is, trade one for another bitcoin, and you’ll have exactly the same thing. Non-fungible NFTs, on the other hand, are a one-of-a-kind trading asset. If you traded it for a different asset, you’d have something completely different.
NFT can represent both a digital asset such as an artwork, but it can also track real-world assets, such as real estate or equipment, or a song, for example. Because you can uniquely define assets, you can also prove ownership of said assets, and furthermore, prove their authenticity.
Why do we need non-fungible tokens to uniquely track assets? The challenge with regular tokens is that they are divisible and can be interchanged. Such features are not good for tracking unique assets. This would mean you could divide your digital assets into different tokens and distribute them. That would defeat the whole purpose of non-fungible tokens, as you would want only one of them to point to a single asset. In addition, if we can duplicate tokens, it becomes impossible to uniquely define them. As a result, NFTs solve the interchangeability problem. A regular (ERC20) token can be interchanged with any other ERC20 token. NFTs tackle this exact property. Thus, each NFT token tracks a different asset and can’t be interchanged with another asset.
A digital asset that is fungible would mean users can freely trade them and we can’t prove ownership of the assets as you can interchange them with any other asset. This becomes a problem if we want to uniquely identify assets. The ERC-721 Standard (NFT) was created to solve this problem.
Why can it be the next generation side hustle?
Because NFT-based assets can be uniquely identified and have their ownership proven, they have been embraced by artists. Over the years, piracy and the fear of piracy have affected the bottom line for digital artists. Just recently, an artist, Grimes, sold $6 million worth of digital art as NFTs. The billionaire co-founder and CEO of Twitter put his tweet up for sale as an NFT. Also, Visa bought ‘CryptoPunk’, part of 10,000 uniquely generated digital avatars NFT for $150,000. African digital artists are not left out. Speculative investment in NFTs is experiencing explosive growth. NFTs have become the latest gold rush for artists.
Uncertainty and anxiety are high. However, NFTs present a great potential way to amplify a side hustle.
How can you participate, you may ask?
How to Participate in NFTs
There are many ways, but this is one common way to do it. You can get an artist on Fiverr, or TechAssembly.co to do the artwork (or do the art yourself).
Here are the steps
1. Set up a Coinbase account, or any other cryptocurrency platform. Buy some Ethereum.
2. Get your artwork ready. Hire an artist or do the art yourself.
3. Open a Metamask account and install Metamask on your browser. It’s a cryptocurrency wallet you download to your browser that interacts with specific websites. You use it to interact with decentralized apps (Dapps) and crypto-based marketplaces and exchanges. After the installation, open Metamask, click on the extension icon in the upper right corner of your browser. Follow the instruction to create a password and write down your seed phrase, a 12-word code that unlocks your Metamask wallet. Write it down and keep it safe.
4. Transfer Eth. Send the ethereum you bought (or own) to the address provided in your Metamask account.
5. Link your Metamask wallet to Opensea.io — the world’s largest NFT marketplace
Connect your Metamask to Opensea. Open Metamask and click that little button that says “Not connected.” Then, click “Connect.” You might get a message that tells you to connect through the website. If so, look for a “connect wallet” button on Opensea. When you get a green light, you’re connected!
6. Setup a collection on Opensea and Mint your NFT. At the top of the Opensea page, you’ll see a “Create” button. Click it. You can upload your image, give it a name, and describe it. Click “Create” at the bottom to publish.
7. Sell. After creating your NFT, go to the NFT’s page, double-check everything is correct, and if you’re ready, hit “Sell.” Name your price and you’re done. Congrats! You have a freshly minted NFT for your side hustle.
You can utilize your social network to create awareness for your freshly minted NFT.
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About TechAssembly
TechAssembly is a technology development company that works on digital transformation, tech skill acquisition, and tech talent acquisition. TechAssembly specializes in communication solutions, economic tech, FinTech, business solutions, Web and mobile development (one-stop shop for all technology development needs).
Our clientele includes funded start-ups and SMEs, some of which are within and outside Africa.