5-Minute NFT Crash Course: Everything You Need to Know | CoinCodex (2023)

NFTs have grown in prominence in recent years, attracting both die-hard fans and outspoken critics. As of 2021, we've seen an explosion of NFT collections and marketplaces, and NFTs have made their way into mainstream media through various endorsements — for example, you may have seen celebrities put their social media profile pictures into different NFTs from collections like CryptoPunks have changed and Bored Ape Yacht Club.

Although NFTs receive a lot of attention, the concept of NFTs is not exactly intuitive to the average person, and there are still many common misconceptions about NFTs. In this NFT crash course, we provide you with a crash course that will update you on everything you need to know about NFTs and clear up the most common misconceptions people have about them.

What are NFTs?

5-Minute NFT Crash Course: Everything You Need to Know | CoinCodex (1)

the termNFTis an abbreviation for "non-fungible token". An NFT is a digital token with a unique identifier issued on a blockchain.

A blockchain is a unique type of distributed ledger that tracks transactions and balances and is very difficult for anyone to alter to circumvent the rules of the protocol. This makes it easier to determine the provenance of an NFT and makes it difficult for anyone to pass off a copy of an NFT as genuine. Some popular examples of blockchains used to issue NFTs are:ether,Solanaepolygon.

NFTs can be used to represent digital collectibles and works of art where exclusivity and scarcity are paramount. They can also be used to represent other types of digital objects where protection from counterfeiting is important, e.g. B. event tickets or passes that offer access to exclusive communities.

Another benefit of NFTs is that since they are issued on a blockchain, they can be freely traded on a peer-to-peer basis at any time. You can send NFTs to another user 24/7, regardless of your geographic location.

(Video) NFT Explained In 5 Minutes | What Is NFT? - Non Fungible Token | NFT Crypto Explained | Simplilearn

In practice, NFTs are most commonly used to represent digital media such as images, video, and audio. However, in most cases the media is not actually stored on the NFT itself. Instead, the NFT usually contains a reference pointing to the media it is intended to represent.

PFP NFTs and the collection that started it all

The most popular type of NFTs are profile pictures or "PFP" NFTs, which are often used as avatars by their owners to represent themselves on the internet. PFP-NFTs are typically released in collections that contain a large number of unique digital images that share a common theme.

The most influential collection in the PFP-NFT genre is CryptoPunks as it introduced the design used by hundreds if not thousands of other NFT collections today. If you go to an NFT marketplace and look for the NFT collections that are seeing the most trading activity, pretty much all of the top collections are heavily influenced by CryptoPunks.

The CryptoPunks collection consists of 10,000 unique avatars automatically generated by code. There is a pool of possible attributes that any CryptoPunk can have and these attributes were randomly selected during the generation process. Attributes include things like gender, skin color, hairstyle, and accessories, and each CryptoPunk has a unique combination of attributes, so no two CryptoPunks look the same.

5-Minute NFT Crash Course: Everything You Need to Know | CoinCodex (2)

Each attribute has its own rarity - some attributes appear on a large number of CryptoPunks, while others only appear on a few of them. For example, the Earring attribute appears on over 2,400 CryptoPunks, while the Alien attribute only appears on 9 CryptoPunks.

Typically, CryptoPunks with rare attributes fetch a higher price compared to CryptoPunks adorned with more common attributes. Actually somethe most expensive NFTsof all time come from the CryptoPunks collection.

(Video) NFTs, Explained

As mentioned, the concept pioneered by CryptoPunks has been emulated by countless other NFT projects with varying degrees of success. By far the most successful CryptoPunks-inspired collection is the Bored Ape Yacht Club, which rivals CryptoPunks in terms of overall value. Other examples of successful PFP-NFT collections are Azuki, DeGods, CloneX and Doodles.

NFT markets

NFT Marketplaces are online platforms that allow users to buy NFTs from other users or to list their own NFTs for sale. NFT markets are also a great way to discover new NFT collections and keep track of which collections are gaining or losing popularity.

The currently most used NFT market isOpen sea. The OpenSea marketplace can be used to trade NFTs on many different blockchains, which is one of its greatest strengths. A variety of NFTs are listed on OpenSea, including PFP NFTs, Art NFTs, Gaming NFTs,Metaverso-NFTs, Photography NFTs, Membership NFTs and more.

5-Minute NFT Crash Course: Everything You Need to Know | CoinCodex (3)

The best thing about NFTs is that they are based on open source technology, so anyone can create their own NFT marketplace and release it to the public. Other examples of popular NFT markets include:Blur,magic Edenerare appearance.

To buy or sell NFTs on an NFT marketplace, you need an NFT wallet. We explain what you need to know about NFT wallets.

nft wallets

LikeNFT-Walletis software that allows you to store, receive, and send NFTs. In most cases, normal cryptocurrency wallets also work as NFT wallets. For example, if you want to collect NFTs on the Ethereum blockchain, you can use the MetaMask wallet software as your NFT wallet. You will also likely use MetaMask to store ETH, which is used as a currency to buy and sell NFTs and pay for transaction fees on the Ethereum blockchain.

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When setting up a cryptocurrency wallet to store NFTs, it is very important to have a safe backup copy of your recovery phrase. This way you can access your NFTs and cryptocurrencies even if you forget your wallet password or lose the device you installed the wallet on. You should never share your recovery phrase with anyone as it gives you full access to everything stored in your wallet.

You should also be very careful when transferring NFTs or cryptocurrencies as these transactions cannot be reversed. If you send your NFTs to the wrong address or if they get stolen, the chances of getting them back are slim to zero.

Invest in NFTs

if you searchNFTs as an investment, there are a few things to keep in mind.

The term "blue chip NFTs" refers to NFT collections with significant valuations and trading volume that are expected to retain (or even grow) much of their value over the long term. While these are certainly the most attractive NFTs, the barrier to entry is often very high.

When it comes to crypto assets like Bitcoin or Ethereum, you can invest as little as you like. For example, you can easily buy $10 worth of Bitcoin or Ethereum. NFTs, on the other hand, generally cannot be broken down into smaller denominations, so they're not a good option for people who only want to make a small investment.

If you want to invest in a premium collection like CryptoPunks, you will have to spend a significant sum - at the time of writing, the cheapest CryptoPunk on the market is listed62,38 ETH, which equals $112,000. The lowest listing price for an NFT is referred to as the "reserve price" of the collection.

You can buy an NFT from other blue chip collections like Azuki and Pudgy Penguins for less money, but you usually have to spend at least a few thousand dollars to get an NFT from a collection that's considered blue chip. Here are the minimum prices for the top 10 NFT collections by market cap:

(Video) The NFT Crash Course –05- Markets and Transaction Costs

5-Minute NFT Crash Course: Everything You Need to Know | CoinCodex (4)

If you invest in less established NFT collections, you could face liquidity problems when selling. These collections also tend to be much more volatile than blue chips and can lose a lot of value quickly.

Still, investing in NFTs can certainly be profitable for savvy investors. The NFT sector still has a lot of upside potential as it has only been around for a relatively short time. Also, NFT prices from large collections have fallen in the cryptocurrency bear market, so there may be good buying opportunities at this time.

Overall, we can safely say that investing in NFTs involves more risk than investing.in Krypto investieren. In some cases, you can get NFTs throughfree nft drops, which can be a risk-free way to get into NFTs.

Conclusion: NFTs are an exciting new industry that has the potential to grow in surprising directions

NFTs are a very new technology that is still gaining traction. Although the prices of most major NFTs fell along with cryptocurrencies during the 2022 crypto crisis, it is safe to say soNFTs are certainly not dead.

although it is possibleMake money with NFT, new investors need to be cautious as NFTs often show great price volatility. Additionally, more established "blue chip" NFT collections tend to have a high barrier to entry, while less popular NFT collections struggle with liquidity and even greater price volatility.

Still, there's a lot to explore in the NFT space, and NFTs don't necessarily have to be viewed as investments. For example, collecting NFTs can be a great way to support your favorite artists.

(Video) NFTs For Beginners in 45 minutes


What is the simplest explanation of NFT? ›

NFT means non-fungible tokens (NFTs), which are generally created using the same type of programming used for cryptocurrencies. In simple terms these cryptographic assets are based on blockchain technology. They cannot be exchanged or traded equivalently like other cryptographic assets. Like Bitcoin or Ethereum.

What is the easiest NFT market? ›

OpenSea is the leader in NFT sales. OpenSea has all sorts of digital assets available on its platform, and it's free to sign up and browse the extensive offerings. It also supports artists and creators and has an easy-to-use process if you want to create your own NFT (known as "minting").

How does an NFT make money? ›

Royalties: As an artist or creator of an NFT, you can get royalties for each sale of your work. Just make sure to specify this when you mint your NFT. Staking: If you own valuable NFTs and store them long-term on a platform or in a protocol (known as “staking”), you can earn interest on them.

Is earning from NFT easy? ›

Trade NFTs

Trading NFTs is a smart and easy way of making money easily and efficiently. You can purchase an NFT collection and make a profit by selling them at higher rates.

How to work with NFT for beginners? ›

How to create and mint an NFT
  1. Decide what type of NFT you want to create. NFTs are versatile—you have plenty of options for choosing which type you want to create. ...
  2. Choose an NFT marketplace. ...
  3. Set up a crypto wallet. ...
  4. Buy crypto through an exchange. ...
  5. Connect your wallet to the NFT platform and mint.
Nov 27, 2022

What is the key to successful NFT? ›

Price Your NFT Project Fairly

One of the most important parts of building a successful NFT project is setting your initial NFT mint price correctly. If you charge too high of a mint price upfront, you risk losing your momentum, not selling out your collection, and losing the support of your collectors.

How do I become successful at NFT? ›

Let's learn all the basic steps that you need to take to become an NFT artist.
  1. Find a niche for your NFT art. ...
  2. Choose the technology. ...
  3. Create your NFT art. ...
  4. Choose the right marketplace. ...
  5. Build a community through social media. ...
  6. Stay active and engage your community. ...
  7. Be consistent. ...
  8. Build a network of artists.
Nov 29, 2022

What creates a successful NFT? ›

The best NFT projects have a few things in common, like creativity, appeal to a clear audience and value beyond the price, experts say. To be successful, brands need to attract the web3 community to their NFTs, but they shouldn't forget their existing core customers either.

How much does the average person make on an NFT? ›

15. The Majority of NFTs Sell for Less Than $200. While a number of NFTs have sold for millions of dollars, the reality is that the average selling price is much less. According to research shared by NonFungible.com, the average price of NFTs was about $150 per NFT for Q3 2022.

What is the average income from NFT? ›

Fully 👻 private. The average Nft salary (globally) is $79,740 per year. Salary estimates are based on anonymous submissions by Nfts, website users just like you and collected from past and present job posts. Once your submission is reviewed by the community, you'll get access to all salary reports.

What is the average profit in NFT? ›

The average revenue per user in the NFT segment amounts to US$114.80 in 2023.

What category of NFT sells the most? ›

Art. Art is the most popular form of NFT out there. Because of that, art is also the kind of NFT that sells the best.

What sells well as an NFT? ›

Many artists sell NFTs of physical art like paintings, drawings, and photographs, while others create them digitally first. Being an NFT artist involves a solid understanding of three key layers: The artwork.

Is selling an NFT hard? ›

Most people interested in creating and selling NFTs are digital creatives. So in short: Yes, it is hard to sell an NFT unless you already have an audience. As with anything, you need to find your buyers, and they don't come just because you uploaded something on a marketplace or website.

How long does it take to make 1 NFT? ›

Generally, it can take anywhere from a few minutes to several hours to mint an NFT. The process requires the user to upload their artwork, set up the metadata, and then wait for the platform to process and mint the token. The process can be sped up depending on the platform, as some offer priority minting for a fee.

Do you have to be rich to invest in NFT? ›

You don't have to be a millionaire to invest in NFTs, however, there's a learning curve to be successful in this space.

How much money is needed to make an NFT project? ›

On average, NFT costs can be as low as $0.01 but go into thousands of dollars. For example, you can create NFTs on an Ethereum blockchain, the most expensive of all blockchains costing an average of $70. However, there are many examples where making your own NFT that can cost you more than $500 at its peak time.

Where to start learning about NFT? ›

Keep reading to find out...
  • NFT Fundamentals (Buy, Create, and Sell NFTs) ...
  • Certified NFT Professional (CNFTP) Certification by 101 Blockchains. ...
  • The Complete NFT Web Development Course - Zero to Expert. ...
  • The Complete NFT Course - Learn Everything about NFTs. ...
  • NFT Crypto Master Class: Buy, Sell, and Create NFTs.

How do I start investing in NFTs with little money? ›

How to buy NFTs
  1. Set up a crypto wallet and buy some cryptocurrency. You'll need one that's compatible with the Ethereum blockchain because NFTs are almost always on Ethereum. ...
  2. Look at some NFT marketplaces. ...
  3. Search for the NFT you want to buy. ...
  4. Place a bid on the NFT you want.

What is an NFT in kid terms? ›

NFT stands for non-fungible token. If something is non-fungible, this means that it cannot be replaced or exchanged for something of identical value.

What is the best way to describe an NFT? ›

Each NFT represents a real-world object like music, a video, an in-game item, or a virtual baseball trading card. These digital assets are bought and sold online, typically with cryptocurrency. Things like physical money or bitcoin are “fungible,” meaning they can be exchanged for one another.

What is NFT and Bitcoin for dummies? ›

What Exactly are NFTs? The acronym NFT stands for “non-fungible token.” Similar to cryptocurrencies like Bitcoin, NFTs are digital assets that can be purchased, sold, and traded at will, just as you could anything else you owned. As you might surmise from the word “token,” NFTs are indeed tokenized.

What is an NFT and why are they so popular? ›

🖼️ Non-Fungible Token or NFT is a digital asset that represents a valuable item with a value that cannot be replaced or exchanged. 💰 NFT collections can reach millions of US dollars due to their high demand. ⚖️ You can sell, buy and create your own NFT works on various NFT trading platforms such as OpenSea.


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