Frequently Asked Questions
What is a NFT?
A NFT is a certificate of ownership that is tracked on a blockchain.
What is blockchain?
A blockchain is a network of computers whose main job is to maintain a record of transactions. This record is often called a ledger. What makes a blockchain different from say a database is all transactions are tracked and verified by millions of independent computers. This makes it exceptionally difficult to hack or to take down. A popular blockchain for NFTs is the Ethereum blockchain and its derivatives.
What is a smart contract?
A smart contract generally is just code that executes actions for predetermined conditions. Imagine a buyer and a seller for a given set of goods being sold online. The buyer doesn't want to send their money because the seller could just keep it without delivering the goods. The seller doesn't want to deliver the goods, because the buyer may not send the money after the goods are delivered. Smart contracts automate the receipt of funds from the buyer and automate the delivery of the digital goods to the seller.
Can anyone make a NFT?
Anyone can make a NFT, but the technical hurdles surrounding smart contract creation can be daunting and hold back a lot of creators from entering this space.
How does one make an NFT?
You need to create a digital file that the NFT would certify you as the owner. In many cases this is a jpeg, but could be an album of mp3 audio files, it could be mp4 files among many other options.
How does one determine an NFTs worth?
The three key factors to consider when evaluating the intrinsic value of an NFT are rarity, utility, and tangibility. The value of an NFT also differs for short- or long-term holding, depending on the asset the NFT represents.
Once an NFT is created, does it last forever?
Yes, unless there is a burn function programmed in the smart contract. The only way a NFT can be deleted is if it is "burned".
Are there physical versions of NFTs?
NFTs are typically digital tokens, but they can be attached to physical assets.
How does one prevent an NFT from being copied or stolen?
Like most digital content one can right click the art and save it or screenshot the art. Users who do this do get to see the art but they don't have the ability to sell that screenshot as they don't have the item of value, the NFT (certificate of ownership). Other ways to prevent a NFT from being copied or stolen involve the use of access NFTs. An access NFT stores the private content on a secure server that a public NFT would unlock.