Frequently Asked Questions

1. What is an NFT?

NFTs are tokens that we can use to represent ownership of unique items. They let us tokenize things like art, collectibles, and even real estate. They can only have one official owner at a time and they're secured by the Ethereum blockchain – no one can modify the record of ownership or copy/paste a new NFT into existence.

NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable with other items because they have unique properties.

Fungible items, on the other hand, can be exchanged because their value defines them rather than their unique properties. For example, ETH or dollars are fungible because 1 ETH / $1 USD is exchangeable for another 1 ETH / $1 USD.

NFTs and Ethereum solve some of the problems that exist on the internet today. As everything becomes more digital, there's a need to replicate the properties of physical items like scarcity, uniqueness, and proof of ownership. Not to mention that digital items often only work in the context of their product. For example, you can't re-sell an iTunes mp3 you've purchased, or you can't exchange one company's loyalty points for another platform's credit even if there's a market for it.

 

Source:

https://ethereum.org/en/nft/


 

2. How do NFTs work?

 

NFTs are different from ERC-20 tokens, such as DAI or LINK, in that each individual token is completely unique and is not divisible. NFTs give the ability to assign or claim ownership of any unique piece of digital data, trackable by using Ethereum's blockchain as a public ledger. An NFT is minted from digital objects as a representation of digital or non-digital assets. For example, an NFT could represent:

  • Digital Art:

    • GIFs

    • Collectibles

    • Music

    • Videos

  • Real-World Items:

    • Deeds to a car

    • Tickets to a real-world event

    • Tokenized invoices

    • Legal documents

    • Signatures

  • Lots and lots more options to get creative with!

An NFT can only have one owner at a time. Ownership is managed through the uniqueID and metadata that no other token can replicate. NFTs are minted through smart contracts that assign ownership and manage the transferability of the NFTs. When someone creates or mints an NFT, they execute code stored in smart contracts that conform to different standards, such as ERC-721. This information is added to the blockchain where the NFT is being managed. The minting process, from a high level, has the following steps that it goes through:

  • Creating a new block

  • Validating information

  • Recording information into the blockchain

NFTs have some special properties:

  • Each token minted has a unique identifier that is directly linked to one Ethereum address.

  • They're not directly interchangeable with other tokens 1:1. For example, 1 ETH is exactly the same as another ETH. This isn't the case with NFTs.

  • Each token has an owner and this information is easily verifiable.

  • They live on Ethereum and can be bought and sold on an Ethereum-based NFT market.

In other words, if you own an NFT:

  • You can easily prove you own it.

    • Proving you own an NFT is very similar to proving you have ETH in your account.

    • For example, let's say you purchase an NFT, and the ownership of the unique token is transferred to your wallet via your public address.

    • The token proves that your copy of the digital file is the original.

    • Your private key is proof of ownership of the original.

    • The content creator's public key serves as a certificate of authenticity for that particular digital artifact.

      • The creator's public key is essentially a permanent part of the token's history. The creator's public key can demonstrate that the token you hold was created by a particular individual, thus contributing to its market value (vs a counterfeit).

    • Another way to think about proving you own the NFT is by signing messages to prove you own the private key behind the address.

      • As mentioned above, your private key is proof of ownership of the original. This tells us that the private keys behind that address control the NFT.

      • A signed message can be used as proof that you own your private keys without revealing them to anybody and thus proving you own the NFT as well!

  • No one can manipulate it in any way.

  • You can sell it, and in some cases, this will earn the original creator resale royalties.

  • Or, you can hold it forever, resting comfortably knowing your asset is secured by your wallet on Ethereum.

And if you create an NFT:

  • You can easily prove you're the creator.

  • You determine the scarcity.

  • You can earn royalties every time it's sold.

  • You can sell it on any NFT market or peer-to-peer. You're not locked into any platform and you don't need anyone to intermediate.

source: 

https://ethereum.org/en/nft/


 

3. Why are NFTs valuable?

NFTs are valuable because they verify the authenticity of a non-fungible asset. This makes these assets unique and one of a kind. Picasso’s paintings are non-fungible. While anyone can make copies of his paintings, the original painting remains irreplaceable and unique. NFTs make digital content irreplaceable, hence valuable.

To understand the value of NFTs further it is necessary to understand ‘fungibility’ better.

‘Fungible’ is the term used when you are able to exchange an asset that you own with another asset of equal value. Currency is an example of a fungible asset. For example, imagine you have $20 and you get two 10-dollar bills in exchange for the $20. You still have the same value but you have exchanged your asset and received a new asset.

Bitcoin is another example of a fungible asset. You can exchange Bitcoins for getting valuable goods, products, and services. The difference between NFTs and Bitcoin is the non-fungibility of the NFT. NFTs are unique and non-fungible. 

Ok, let’s go back to the example of the artwork by Picasso. Since Picassos’s artwork is unique and irreplaceable its value depends on multiple factors. Usually, the value for non-fungible assets will depend on the utility, ownership history, future value, and liquidity premium.

A painting or artwork is in fact, just the arrangement of colors in a specific manner. But the feelings it evokes and the impact it creates are central to the valuation of that piece of art. Recently a digital-only artwork by Beeple was sold for $69 million. What does the buyer get? Nothing tangible — only a virtual picture. But there was a value to these pixels as much as $69 million. 

There are a few different key aspects when it comes to determining what makes an NFT valuable. So, how do you know if a non-fungible token holds value?

Here are some factors to consider when determining the value of a non-fungible token (NFT):

  • Underlying value (the value behind the creator.)

  • Potential value (future value, up-and-coming artists and creators, celebrities.)

  • Perception of the buyer (what is the NFT worth to you?)

  • Similar market value (what are other pieces from the same creator selling for?)

So continuing with the contrast with cryptocurrencies which are fungible – Fungible tokens are divisible into smaller units. Some examples are Bitcoin and Ethereum. For example, you can split up Bitcoins into Satoshis and Ethereum can be broken down into base units known as Wei.

NFTs cannot be broken down like Bitcoins into smaller units. There is a unique piece of data that is usually rare and limited in number. Couldn’t any artwork be copied and shared endlessly? Of course, it can be, but the aspect of NFT is that it can be made into a token which means that it has a digital certificate of ownership that can be bought and sold along with the artwork. 

What this does is create the authenticity and credibility of the source of that work or the type of NFT that you are buying. The authentic Picasso will be valuable even if multiple fake copies of it are made and sold and hung in houses or offices. The original will still have value if its authenticity can be proven.

4. What can go wrong with NFTs?

NFTs are not as fragile as physical collectibles but there could be issues that may crop up. These issues come with any digital product. 

Some issues which may cause NFTs to go bad are:

  • Image formats of file formats can get corrupted.

  • Websites, where NFT metadata is stored, could go down (the NFT would still exist).

  • You might forget your passwords to access your NFTs.

  • The blockchain used to create and sell the NFT may seize to exist.

While there is a lot of money to be made in the NFT market there are challenges and issues to be sorted out. One of the major controversies surrounding NFTs is their contribution to the carbon footprint which is creating huge concerns.

A single gif can lead to the consumption of a huge amount of energy and we’re talking about thousands and millions of gifs that will be bought and sold in the market places. The repercussions of these on the environment are simply too horrible to be imagined. 

Currently, NFTs are in their infancy stage and not a lot of regulations or rules exist around them. It remains to be seen how governments and regulatory agencies will react to this and the laws they bring about.

5. What is an Ethereum Wallet?

Ethereum wallets are applications that let you interact with your Ethereum account. Think of it as an internet banking app – without the bank. Your wallet lets you read your balance, send transactions, and connect to applications.

You need a wallet to send funds and manage your ETH. More on ETH

Your wallet is only a tool for managing your Ethereum account. That means you can swap wallet providers at any time. Many wallets also let you manage several Ethereum accounts from one application.

That's because wallets don't have custody of your funds, you do. They're just a tool for managing what's really yours.

source: 

https://ethereum.org/en/wallets

6. How do I connect my wallet to Brave New Art?

For now, this functionality is not available. We are currently building an international community of professional artists and creating the first NFT projects. This is helping us understand what creators need and build in the right direction.

7. What are NFT marketplaces?

NFT marketplaces are platforms where NFTs can be stored, displayed, traded, and in some cases minted (created). These marketplaces are to NFTs what Amazon or eBay are to goods.

In order to access and use these types of marketplaces, you will need to have the following:

  • A crypto wallet: You’ll need to choose a wallet that is compatible with the blockchain network that supports the NFTs you wish to buy (below). For example, if you plan to buy or sell NFTs based on the Ethereum blockchain platform, you will need to use a compatible Ethereum wallet such as MetaMask. For NFTs sold on the Solana platform, you will need to use a wallet service such as Sollet.

  • A number of coins in the wallet: You will need to pre-fund your wallet before buying, listing, or minting an NFT. Again, you will need to find out which cryptocurrencies are supported by the marketplace you intend to use.

  • A user account: You will need to set up an account on the particular marketplace you wish to purchase NFTs from.

It’s worth noting that, for the most part, listing and creating NFTs on a marketplace platform incurs a blockchain network fee. The fee varies depending on which blockchain-based system you decide to use. For example, Ethereum boasts the largest ecosystem of NFT dapps (decentralized applications). But it has the most expensive fees.

One of the most popular NFT marketplaces is: www.opensea.io

8. Can you help me create an NFT?

We always like helping artists and creative people. You can connect with us here.

 

9. Can I sell NFTs through your platform?

For now, we do not offer this functionality. All projects created on Brave New Art are sold through NFT marketplaces.

 

10. Does Brave New Art have a token?

Yes, we do, but it's not for sale at the moment. If you would like to learn more about our token you can request our white paper here.

 

 


11. Should I invest in NFTs?

The Content of Brave New Art is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by Brave New Art or any third-party service provider to buy or sell any NFT, cryptocurrency, or token. There are risks associated with investing in NFTs. Before investing do your own research and consult a professional financial advisor.

 

12. I do not where to start, could you help me out?

We are more than happy to help new NFT creators. If you are having difficulties feel free to get in touch with us.