Explaining NFTs to Your Friends
NFTs: a term that confuses some but intrigues others. Just what is it? And how do we explain it and its impact on the people around you? Before we get started on the basics, you have to know what a blockchain is. A blockchain is a decentralized, permanent, transparent, and publicly accessible ledger. In simpler terms, it is literally a data storage network built on top of blocks of information. By storing all kinds of information in these “blocks”, a blockchain records everything by stacking these blocks on top of each other.
Now, the basics. NFTs, or Non-fungible Tokens, is a permanent, one-of-a-kind unit of data stored on a blockchain. There is a multitude of blockchains, but most NFTs are currently stored on Ethereum, the largest network there is. Protected by blockchain and Smart Contract (a piece of code running on a blockchain) technology, each NFT can only be owned by one entity at a time. You can think of it as a digital certificate, a proof of ownership, that serves as evidence of proprietary rights to an item. This is not a revolutionary concept, as proof of ownership is already archaic and prevalent throughout history, but the way it can be applied to everyday life is certainly revolutionary.
- Explaining NFTs to Creators (Artists and Designers)
- Explaining NFTs to Friends in Finance
- Explaining NFTs to Engineers
- Explaining NFTs to A Hypebeast
- Fine Art and NFTs
Explaining NFTs to Creators (Artists and Designers)
NFTs are widely used as proof of ownership of unique assets, such as fine art and other collectibles. To friends who are artists and designers, whether their work is physical or digital, NFTs are a game-changer. One, it bestows the creator power, the power to exercise their wildest imagination, and to have absolute freedom to be themselves and create from the heart. Artists can now focus solely on self-expression and sell directly to their audience and be able to make a living from it.
NFTs also have a mechanism that allows the creator to receive a certain percentage of the royalties off of every secondary market transaction. Unlike traditional secondary markets, the original artist can receive a percentage of all transactions that take place. Now that is revolutionary.
Secondly, NFTs also empower art enthusiasts and collectors by making collecting digital art possible without being victimized by copycats, scammers, imposters, and catfishers. Prior to NFTs, digital artwork can be easily copied, plagiarized, and misused over the internet, and there is absolutely no way to verify who the original creator is, and how it can be monetized and sold. With NFTs, that is no longer an issue as proof of ownership is a given and every transaction is recorded on a blockchain.
Another notable milestone made possible by NFTs is the ability to connect the creator to the collector. This is perhaps the most significant change as more and more artists are using NFTs as a medium to touch base with their fans and collectors alike. One of the most common methods to interact with fans is through Discord, an online communication platform. Of course, there are more creative methods of engagement, such as inviting the fans to complete an artwork WITH the artist, receiving the original digital artwork AND a physical art piece, and so forth. The possibilities are endless.
To learn more about how to engage with world-class artists directly on TRLab, visit: https://trlab.com/faq
Explaining NFTs to Friends in Finance
An important caveat to note: Depending on which blockchain the NFT marketplace is built on, you need to own that blockchain’s cryptocurrency in order to buy the NFTs. For example, all TRLab NFTs are issued on the Ethereum blockchain. That means you need to buy ETH (the Ethereum blockchain’s native cryptocurrency) to purchase a TRLab NFT. Other popular NFT marketplaces like SuperRare, OpenSea, and Nifty Gateway, are all built Ethereum as well.
Setting up a crypto wallet is also essential if you want to own an NFT. A crypto wallet is basically software that stores cryptocurrencies such as ETH and enables blockchain transactions. There are also different types of crypto wallets, but the most standard and widely used option is MetaMask. Once you have a crypto wallet set up, you can visit the marketplace of your choice and start investing!
But before you start, always DYOR (do your own research)! Follow artists you like on Twitter, join Discord chats about interesting projects, and ask questions. But what really helps the most is to mint your own NFT. Going through the entire process, step by step, and becoming more experienced and immersed in the NFT world will help you to not only understand it but take an active role in it as well. Go down the rabbit hole and really immerse yourself in the culture and experience goes a long way. You can always trade and flip NFTs and make a quick profit, but doesn’t investing in real art that appreciates in value over the long term sounds way more attractive?
To learn more about how to collect NFTs on TRLab, visit: https://trlab.com/faq
Explaining NFTs to Engineers
Let’s get a tad more technical if you want to explain NFTs to your Engineer friends. The decentralized technology that made NFTs possible is key to understanding just what an NFT is. First off, the “token” in NFT simply means a Smart Contract (a program, a collection of codes) that operates within a blockchain platform, with a specific function. The naming may make it sound like it’s extremely intelligent (just like machine learning), but in reality, once a smart contract has been implemented, it can only follow certain rules that were predetermined, as it can only run the way it was programmed. Not so smart after all.
Also, an important note: An NFT is not the artwork itself. It’s a piece of code that includes metadata of where to find the artwork, who owns it, and the value of the artwork. This means NFTs can be applied to not only art and collectibles, but also to music, real estate, fashion, gaming, social media, real-life events, and so much more. On top of that, NFTs can be interacted with and viewed in ways that transcend the capabilities of traditional media, it all depends on how the smart contract was written.
And since NFTs are recorded on a blockchain, we will use Ethereum as the example for now, this means we can only use Ethereum’s native cryptocurrency, ETH, to buy them. Every NFT purchase will also incur an additional fee called gas fee. Gas fee is a transaction fee for using Ethereum. It’s paid in Ether and varies depending on the current demand on the blockchain, meaning it may be higher during peak hours (similar to ride-sharing services). The gas fee will be in a different cryptocurrency if the NFT is recorded on another blockchain. For example, the gas fee will be in BNB if the NFT is on Binance Smart Chain, or SOL if the NFT is on Solana.
Besides gas fees, some may also ask why certain NFT marketplaces, such as TRLab, only accept cryptocurrencies? That is because TRLab is a decentralized platform (Dapp), meaning payments are all controlled by Smart Contracts. Because of this, we can only accept cryptocurrencies. A Dapp is basically an application deployed on a blockchain, very much similar to the apps in Apple Store and Google Play.
Now that we have covered the purpose of gas fees, there is another very important matter to understand. The type of token standards for NFTs. Currently, there are two most widely used standard forms of tokens that permit NFT minting and are most widely accepted on Ethereum: ERC-721 and ERC-1155. “ERC” simply means it is a token on the Ethereum blockchain and will vary depending on the blockchain. ERC-721 allows the creation of non-fungible tokens, as it is the gold standard for all NFTs. It needs a new smart contract to produce tokens individually. Using ERC-721 makes the NFT a truly unique asset, a 1 of 1 type of asset class irreplaceable by others.
ERC-1155 allows the creation of both non-fungible tokens and semi-fungible tokens. Unlike ERC-721, ERC-1155’s smart contracts support an infinite number of tokens. With ERC-721, if you want to send multiple tokens, they happen individually. However, its counterpart, ERC-1155, allows tokens to be transferred in batches, which can reduce transaction times and gas fees significantly, making the NFTs much more cost-friendly and can alleviate a blockchain network’s congestion issues. For example, when a user wants to mint multiple NFTs, ERC-1155 allows him or her to mint all the NFTS in one go instead of wasting excess capital and incurring additional gas fees by sending them one at a time.
To learn more about NFTs on TRLab, visit: https://trlab.com/faq
Explaining NFTs to A Hypebeast
Now that you know a bit about NFTs, there’s more to consider on the kinds of NFTs available. You may be most familiar with PFP (Profile Picture) NFTs (e.g. CryptoPunks, Bored Ape Yacht Club) that are taking over your Twitter timeline. Usually, a PFP NFT functions purely as a collectible, much like a baseball card, while some may offer membership access to certain community activities and offline events. But aside from flexing your newly minted NFTs on your socials, there’s really more to it than that. There are 2 other types of NFTs that are equally as prevalent in the current NFT space, and they are Limited Editions and 1 of 1 Auction Pieces.
Limited Edition NFTs are works of art where there will be a certain number of editions derived from an artwork. Take Exploding the Self, our collaboration with Cai Guo-Qiang, for example. Exploding the Self is a Limited Edition NFT where only 99 editions were made available to the public. Once these 99 editions sell out, users can only collect them on a secondary market. In addition, the Limited Edition owners will gain access to an exclusive online community on the TRLab Discord channel where they can engage with Cai directly! You can’t get that from a PFP NFT. We also did several Limited Editions for AI 2041, our groundbreaking multi-artist NFT project, with artists such as Brendan Dawes, Ash Thorp, Blake Kathyrn, NessGraphics, PrayStation, and Robbie Trevino.
1 of 1 Auction Pieces are single edition NFTs where users can bid on, much like a typical auction. 1 of 1 pieces are usually much rarer than PFP NFTs. Back in July 2021, we partnered with Cai Guo-Qiang to drop his debut NFT project, Transient Eternity, which closed at USD$2.5M, making it the highest price paid for an NFT from a non-crypto-native artist!
On that note, it was also an auction piece, Beeple’s Everydays: The First 5,000 Days, that brought NFTs the mainstream attention it has today.
Fine Art and NFTs
At TRLab, we believe NFTs can change the world, and the very foundation of how we interact with each other, whether you’re a creator or a collector. As veterans of the so-called ‘traditional ‘art world, and as citizens of the world with roots in Asia, we seek to support digital and traditional artists as they integrate NFTs into their artistic practice, and ground the act of collecting in access, engagement, and a shared love of art.
Although PFPs and collectibles are certainly a joy to own and to share amongst friends, TRLab’s core focus is on merging the fine art community with NFT enthusiasts, bringing the best of both worlds together to create more value for the two sides.
Inspired by the Latin phrase ‘tabula rasa’, or blank slate, TRLab was created to reframe the boundaries of the art world. Through innovation, curation, and accessibility, we’re inviting both artists and collectors to join us in creating a truly global community dedicated to advancing art — and all it could be.