What is an NFT: everything you need to know

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GM: Good Morn­ing, a stan­dard greet­ing NFT enthu­si­asts have turned into insid­er code.

WAGMI: We’re All Gonna Make It, short­hand for the opti­mism – some­times mer­it­ed, some­times delu­sion­al – around NFT projects.

NGMI: Not Gonna Make It. An insult reserved for inept investors, rip-off projects, and NFT haters generally.

Dia­mond hands: The abil­i­ty to hold onto NFTs for the long haul. If you can with­stand ear­ly loss­es in hopes of a big pay­day, you’ve got dia­mond hands.

Paper hands: The oppo­site of dia­mond hands: some­one who bails out and sells early.

PFP: Pic­ture for Pro­file, used to refer to a col­lec­tion of NFT-linked images designed to work as Twit­ter avatars. (See Cryp­toP­unks, Bored Ape.)

DYOR: Do Your Own Research. Because Web3’s self-sov­er­eign­ty ethos means there’s no safe­ty net if you make a mis­take, col­lec­tors are on their own when it comes to avoid­ing scams and find­ing the most promis­ing projects.

Mint: The act of trans­form­ing a dig­i­tal asset – a JPEG of a pen­guin wear­ing a hat, a trance song, etc –into an NFT.

DAO: Decen­tralised Autonomous Organ­i­sa­tion. Basi­cal­ly, a club but with no cen­tral lead­er­ship. Mem­bers typ­i­cal­ly pool their cryp­to and make deci­sions on what to do with their funds, together.

CC0: A type of licence that waives copy­right and puts an NFT’s art in the pub­lic domain.

4. What makes an NFT valuable?

Think of an NFT like any col­lectible: dead­stock Jor­dans, Poké­mon cards, taxi­dermy. Cer­tain items are sim­ply more scarce, which imparts val­ue. To learn more, we tapped Kevin Rose, a tech entre­pre­neur, pod­cast host, and the co-founder of Proof Col­lec­tive, a pri­vate com­mu­ni­ty of NFT col­lec­tors where mem­ber­ship pass­es have trad­ed for around 100 ETH apiece, and Moon­birds, instant­ly one of the best-sell­ing PFP col­lec­tions of 2022. – D.C.

GQ: First off, why did you get into NFTs?

Kevin Rose: It was 2017, and it was a project called Cryp­toP­unks. My friend said, “Here are these cute 8‑bit char­ac­ters that you can col­lect on the blockchain. We can trade them.” I bought 10. I think I paid £3 or £5 each, then for­got about it.

After a while, there start­ed to be more move­ment, so I popped my head back in. The NFT stan­dard had been [wide­ly estab­lished]. Mar­ket­places could exist. And there were all of these native dig­i­tal artists who were only pro­duc­ing work on the blockchain. I said, OK.… so there’s proven scarci­ty, and it’s all on-chain in a trans­par­ent fash­ion. There’s dura­bil­i­ty, so it’s not going to degrade in qual­i­ty over time. I can trans­fer it eas­i­ly. And there’s a 24/7 mar­ket for liq­uid­i­ty [ie. con­vert­ing cryp­to to real cash]. There’s so much empha­sis on crazy NFT prices now, and that’s not sus­tain­able. But I know that NFTs are 100 per cent here to stay because it’s just bet­ter tech.

What makes a spe­cif­ic NFT valu­able? 

I don’t think it’s fair to put all NFTs in the same brack­et. If I’m buy­ing a one-of-one from XCOPY for £500,000, it’s because I know that XCOPY is the Banksy of the NFT gen­er­a­tion. He’s like any great artist, but I can’t col­lect his work any oth­er way, because he has a very unique, ani­mat­ed style that can­not be repro­duced in a non-dig­i­tal form.

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