Author:  Maria Alfano

Here’s your chance to learn about NFT for beginners.  When those of us (in midlife) were growing up, a computer was not on our radar.  Never mind carrying a cell phone in our pocket or purse with us everywhere we go.  We grew up in a time where playing meant going outside and purchasing something means that we could actually touch and feel what we bought.  Making a purchase meant going to a physical shop to pick up what we needed and wanted.  Online shopping did not exist until Amazon and eBay made it a cool thing to do in the mid-1990s.

Today people purchase many things online and have them delivered to their door on a daily basis.  You would be hard-pressed to find anyone today who has not made at least one purchase online.  Heck, even my 80-year-old mom shops online.  Having said that, why are NFTs so important?  

The metaverse is the latest craze and a place where millions of dollars trade hands for a piece of virtual reality.  This is reminiscent of the early days of the internet.  Back then people bought website addresses to hold for future profit.  Many of the millionaires at the time were made from knowing what URL name to buy, which one was in the highest demand, and how much they could be sold for.

How To Understand NFT For Beginners

So why should you care about non-fungible tokens anyways?  Could they be a fad that will soon go away?  In my humble opinion, these can be considered a way to pass down an investment from generation to generation.  Honestly, folks thought the internet was a fad in the early days and yet today, we cannot live without it.

This post will help you to understand NFT for beginners, what is this new trend, how does it work, and how you can use it.

What is A Non-Fungible Token

Ok, so these words are just a bunch of words with little meaning in everyday life.  Yet, you are very familiar with what they stand for.  How many times have you heard the words “one of a kind” or “limited edition”?  If I had a nickel for every time I heard or read those words…well you know how the saying goes.  Non-fungible means unique, extraordinary, and cannot be replaced by something else. Unlike cryptocurrency which is also a token but it is widely and readily available and can be used to trade for (or purchase) something else.

How Do NFTs Work

NFTs are built on the same type of digital format as crypto currencies are – blockchains. The difference is these blockchains support the ability to store unique or limited edition pieces of data.  Blockchains are a way of storing information that makes it difficult to be hacked.  Generally, the passwords for blockchains are changed hundreds if not thousands of times per day. This information is stored on many computers within the chain.  Should one of the computers somehow be linked to a “forbidden” change, it is automatically removed from the group thus protecting the digital details from corruption or piracy.

NFT For Beginners

Think of yourself as the modern-day Leonardo Davinci.  You are an acclaimed digital artist and you put your artwork for sale online.  Each piece is numbered and you will only sell a very limited quantity.  Those few people who purchase a copy of your artwork are the only ones in the world that can own it.  Because of the limited availability, the value of these pieces goes up. Your masterpiece cannot be traded for something else.

The hottest trend in NFTs is selling fine (or not so fine) art in a digital format and music.  However, it has been said that the founder of Twitter sold his very first tweet as an NFT for millions of dollars.  The days of building an app to sell your items online are quickly becoming extinct.  If you have valuable sticker art or trendy music or even a video clip to sell, an NFT is your best option.

Knowing where to buy and sell is just as important as knowing the what!  So many dealers have popped up but the most popular at this time are OpenSea, Rarible, and Grimes’ choice, and Nifty Gateway.

Pros and Cons of NFT For Beginners

Of course, as with anything in life, there are pros and cons to buying and selling non-fungible tokens.  There will always be people selling, people buying, and then there’s those who shall remain nameless.

Pros

• NFT art ideas are a great way to sell your unique or limited edition pieces.  For example, a musician releases a new album but the last song that is named on the album cover is not included.  It is only available to a limited few top fans who purchase the recording as an NFT.  This not only makes the song more desirable, but it also makes it more valuable and lucrative for the performer.
• These are limited editions or one-of-a-kind pieces that only a select few people in the world own.  The investment in the right item will grow exponentially in the same way the price of the Mona Lisa has grown over the centuries.  Your initial investment will have an increased value over time.

• You can pass the piece down to your heirs.  The investment will continue to grow.  Think of it like a stock portfolio that you started for your child when they were born.  Now in their thirties when you pass that portfolio to them, it could be worth several thousand if not millions of dollars based on your initial monetary investment.
• NFT art is sellable.  Just like trading (buying/selling) stocks is a thing, so is selling your NFTs.  If you invested in the right thing, then selling for a profit is very doable.  As in the stock market, some people buy stocks and keep them so that as their value increases, so does the value of their own holdings.  Others buy stocks at lower prices and sell them immediately once the price goes up and take their profits right away.  (I am oversimplifying the stock trading details).

Cons

• There is always the possibility of having something digital be copied.  Unfortunately, no one can be stopped from reposting a picture or sharing content online.  The good news is, rights to the original piece can be maintained by the creator.  And, any buyers will be given the token key that proves they own that serial # for the piece.  Think of a Rolex watch.  Every watch has a serial # engraved on it proving the authenticity and the limited number that were produced each year.  If you see a Youtube video of that Rolex, it’s not the same as owning one.

• Could they be the next pet rock of the 21st century?  What if this is just a fad?  There is always the possibility that this will not take off.  But, with so many millions of dollars that have already changed hands over since 2014, you may be hardpressed to tell tose buyers this fad will be disappearing anytime soon.
• Knowing what to buy/sell and where to buy/sell can be challenging.  Investing for speculation is always risky.  It’s like buying a house in a rundown boarded-up neighborhood that families are fleeing from and hoping that you will make money once you fix it up.  In real estate, it’s all about location.  With NFTs it’s about understanding what buyers want.

In Summary

It will be difficult to live in a virtual/digital house, drive a virtual car, or survive on digital nourishment.  These things are still required to be tangible.  Although owning a virtual mansion does sound intriguing.  Understanding where the world is going and how to use NFT for beginners, is something we midlifers may need to wrap our heads around.  If you want to leave a legacy for your children’s children, then thinking as they do is the place to start.  Gone are the days of shopping at the mall or giving socks and underwear as a gift.  Today’s youth look for digital media.  Remember they grew up with a computer in one hand and a cell phone in the other.  And, if you are talented and want something to do in your retirement, then perhaps creating beautiful NFT artwork is a way to pass the time.

We would love to hear from you.  Have you ever created, sold, or bought NFTs?  How easy was the process?

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