Everything You Need to Know About NFTs | CFI VU
What is NFT & how it works

What you need to know about NFTs

NFT stands for Non-Fungible Token; essentially, it's a digital asset that can take any form and shape. "Non-fungible" signifies that it is unique and cannot be substituted with anything else.


It is a one-of-a-kind trade card, you'd get something altogether different if you swapped it for a different card/asset.


There are several platforms you can use to purchase NFTs, the most popular ones being OpenSea, Rarible and SuperRare.


In order to purchase NFTs however, you need to first create a digital wallet, to purchase, store, or even sell an NFT.


The mostly active wallet NFT collectors use is MetaMask, below you can see how to set up MetaMask and link it to your NFT marketplace of choice, in this example you will learn how to set up MetaMask and link it to OpenSea (Figure 1)


OpenSea NFT platform

Figure 1 : Source OpenSea

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Setting up MetaMask

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Enable Extension and Setup

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Set your MetaMask password

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Create MetaMask recovery phrase backup

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Confirm MetaMask Recovery Phrase

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If you followed the prompts above correctly, you should’ve started off setting up your wallet by first going to the MetaMask Website and then selecting “install MetaMask for Chrome”, if you're using chrome.


MetaMask is also available on a wide array of browsers.


After you install MetaMask it will ask you to enable the extension and begin setup. First, you will create a password for your wallet.


Then you will begin setting up a secret recovery key so you can access the wallet in case you forget your password.


Lastly, you need to confirm your secret recovery phrase to complete the setup of your Metamask account.


Hopefully, by now, you’ve set up your NFT wallet; now you will link it to OpenSea


Connect MetaMask to OpenSea website

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Select MetaMask

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Connect with MetaMask

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If you followed the images above in sequence, you would have first gone to the OpenSea website, then selected profile, then wallet.
After those steps, you should select MetaMask and then hit connect and boom, congratulations, you have now linked your wallet to OpenSea.


People buy NFTs for various reasons; the most common is to either collect art or ascertain certain perks.


Some people purchase NFTs to create a collection similar to art collectors and have their own portfolio.


Recently NFTs offer utility, by offering access to certain communities which have virtual and IRL meetups similar to Gary Vee’s or the Bored Ape Yacht Club - a very prominent NFT collection.


Furthermore, some game developers have decided to merge the worlds between games and NFTs by allowing users to have access to the games if they purchase the game developer's NFT.


On the other hand, SMEs have also started diving into the NFT world by offering their own NFTs to consumers which allows them for example to get a discount at certain coffee shops or attain some sort of benefit from owning the NFT.


At the same time, more than 64% of people on the NFT marketplace try to make money by flipping NFTs for a profit according to an analyst from the Hustle. Co.


In simple terms, it's a blockchain technology. Behind every single NFT you buy or currently own, there is a smart contract which is essentially the ‘title’ to your NFT.


Therefore, with this in mind, someone cannot just screenshot your NFT and try and sell it on any NFT marketplace as there are systems in place on all marketplaces to prevent someone from selling an NFT that isn’t yours.

If you own the smart contract and you have properly bought the NFT, then you will be able to see it in your portfolio and sell it if need be.


Since the time that NFTs started becoming popular and markets such as OpenSea started appearing, they were normally just JPEGs in most, even though anything can be an NFT.


However, recently they are now being purchased based on their utility and the ‘utility’ of an NFT will really make the market thrive.


Nowadays anyone can create an NFT, however, few can provide value with their NFTs.


A great example of this is the Bored Ape Yacht Club collection, a very prominent collection name within the NFT game.


The base price (minimum price) to purchase an NFT from their collection is around 87.5 Ethereum which equates to roughly $134,439 and they go as high as $151,663,999,999,998,500.00.

Source OpenSea - Bored Ape Yacht Club NFT #5673

Figure 4 : Source OpenSea - Bored Ape Yacht Club NFT #5673

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Anything can be turned into an NFT, a JPEG, floor plans for houses/apartments, audio recordings, and videos; the possibilities are endless.


Twenty football premier league clubs are considering the possibility of getting into NFTs, with players' faces as different NFTs, fans can purchase it and possibly benefit from it, it could give them access to meet that player for a certain time.


A lot of NFT collections within their discord offer ‘free mints’ for their NFTs. Essentially free mints mean that the person does not need to pay to receive the NFT, however, NFT communities/developers have made these free mints competitive.


Instead of just giving ten NFTs away for free for example, they make them complete certain tasks, for example spreading awareness of the project on their social media for that person to receive the NFT.


The NFT in Figure… was created and sold by Beeple for $69.3 million.


Beeple NFT

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