My Conversation explaining NFTs and why my friend needed to get into them.
I had a conversation with a friend, who is a musician, about NFTs. I am happy to report that my friend was very excited by our conversation, as it gave him hope that he could control his future and his music better. I must admit the conversation also gave me a sense of hope and excitement too, because I felt like I really understood NFTs as I explained them to him in plain, non-technical words.
My father always said, that if you really understand something, you can explain it to someone else, who knows nothing about it, and convey to them a good understanding. After my conversation I felt like I passed my fathers test.
My Conversation explaining NFTs and why my friend needed to get into them.
Nonfungible tokens are also called NFTs, and the best way to understand them is that . . .
- First, they are cryptocurrency tokens
- Second, they live on the blockchain, which is like their mom, so the blockchain always knows where they are, and their movements can be traced, where ever they go to a certain extent.
- Three, they are the opposite of fungible tokens.
- Four, fungible tokens are like dollar bills and bitcoin, they are the same and they are interchangeable.
- Five, non-fungible tokens are in general unique and not interchangeable. However they can be produced as singular tokens or ten tokens or one hundred tokens or one thousand or more. But even if there are one thousand tokens, they are different.
- Six, this is the tricky part, you can have one thousand tokens, which are the same song, but each one is different and unique.
- Seven, an artist who creates a digital file of a token can mint NFTs and sell the token, and most of the money goes to the artist.
- Eight, an artist gets paid for the initial sale, and can also reap rewards from subsequent sale. This is important because an item sold for 100 dollars could later sell for 10,000 dollars. The artist could encode the NFT so that every time it is resold, a small portion goes to the artist.
- Nine, an artist who sells his NFTs can keep track of who buys them, and send them advertisements about his next art NFT, and reap the rewards of resales to fans by controlling this list of fans.
- Ten, the artist also controls any spinoff merchandise, like album cover art, or short segments of songs with pictures or autographed pictures of the artist. All these things derive their value from the relationship to the original art.
- Eleven, NFT tokens live on a blockchain. It is possible to mint them on more then one blockchain, but this lessens their scarcity and possibly their value.
- Twelve, you should mint your tokens on a blockchain which is secure and cheap to transact on, like Wax, Hive, Binance Smart Chain.
Last words and cautions
Security:
- First, always maintain control of your private keys, they control the movement of your NFT tokens, and they control the movement of all your earnings from your NFTs.
- Second, never give anyone your twelve word seed phrase, this is a group of random words which allows you to create a duplicate of your crypto wallet and control your tokens from there.
- Third, your keys should be saved in three places, but not on your computer, instead on a USB drive or Ledger wallet attached to your computer. Then placed in two other locations besides your home.
- Fourth, no one sends your crypto money, no one pays your crypto bills, no one controls your crypto except you.
- Fifth, anyone helping you with the technical aspects of your crypto should not ask for a copy of your keys or your twelve word seed phrase.
- Six, always have people tell you what to do with your keys, but never let anyone have your keys and then show you what to do.
- Seven, never let anyone remote into your computer to help you do things. They can only walk you through it, or show you how they do it on their computer.
That’s how I did it . . .
- Do you have any ideas about how I could do this better?
- What would you add?
- Put your feedback below.
The End for now.
😊
