An abbreviation “NFT” stands for a non-fungible token. 

Easy, right? Or maybe not? To help you understand NFTs better, we made a video where our Director Rory Blain talks you through exactly what NFTs are from scratch to finish. 

In summary, in order to understand what an NFT is, you need to understand two other concepts first: fungibility and a blockchain. 

To cover the first concept, fungible simply means replaceable, exchangeable, swappable like-for-like. Non-fungible means irreplaceable, non-exchangeable, unique, one-of-a-kind. Everything in the world falls in one of those categories. Money, for example, is exchangeable and thus fungible. On the other hand, art is typically not exchangeable, so, for example, a Mona Lisa is not fungible.

To cover the second concept, a blockchain is a decentralized and an ever-growing ledger that contains information about transactions. Instead of a single centralized entity validating transactions, the very many computers powering the network do it. These transactions can be about anything. The first use case for blockchain was related to financial transactions, or payments, however, many more things can be recorded on the blockchain - for example, it can contain ownership data of digital files.

Okay, let’s combine the two concepts together. An NFT is simply a record on the blockchain related to the ownership information about the digital file. It contains data when it was created, who created it, and when and for how much it changed hands. The data that NFTs contain typically relates to ownership and authorship information of an image or a video file.

Again, if you’re just starting out with NFTs, we do highly recommend you to watch the video we’ve made - yes, we know it’s long and these days attention spans are less so, but it will really help you to understand NFTs and the underlying technology - we did spend a lot of time to make it as clear and easy as possible, so that any beginner can grasp the concept in 15 minutes :)

You must be thinking right now: “Oh no, more concepts to understand? I still barely understand what NFTs are, and there’s MORE? Ethereum?!” 

Don’t worry, this one is actually quite an easy one and again - we’ve got you covered with a video to walk you through it! 

Let’s recap it. Ethereum is one of the most important blockchains out there and most NFTs do run on Ethereum. Ethereum was first proposed in 2013 and it went operational back in 2015.

When understanding Ethereum, a key concept to wrap your head around is a smart contract. On Ethereum you can deploy the so-called “smart contracts” - pieces of computer code that execute automatically. These are exactly what allows for many important real-world applications of Ethereum, not only within the realm of finance, but truly for anything. For instance, smart contracts are exactly what allows us to automatically assign the percentage of resale value and revenue from any given artwork (or any given digital asset) to someone who’s minted the NFT (minting means listing ownership data on the blockchain - the process by which NFTs are created) - a critical and a very overdue development within the art world.

Ether is the currency that is powering the Ethereum network. There needs to be compensation for the very many computers keeping the network secure, so performing actions (such as deploying a smart contract, minting an NFT or transferring a token between one wallet and another) on the blockchain is subject to fees. These fees are paid in ether, the native currency of the Ethereum blockchain. When you’re buying an NFT, you will also be paying in ether.

Gas fees are fractions of ether that are paid to perform different actions on the Ethereum blockchain. 

Similarly to how gas, or petrol, powers your car, gas fees power the Ethereum blockchain.

Gas fees vary all the time. There exist multiple tools to help you estimate gas fees at a given time, for example: https://www.gwei.at/ & https://www.blocknative.com/gas-estimator

Please note that gas fees can vary incredibly widely and a transaction can cost anything from a few dollars to a few thousand dollars (but the currency will be ether!) in the time of the network’s maximum congestion. While the Ethereum team are developing the solutions to ensure the network's scalability, currently gas fees do remain high. 

For now, if you check the gas fees from your wallet and they seem too high, you can simply wait and try again later.

In the physical world, you probably use a wallet to store your cards with which you can purchase items. Similarly, in the digital world, you do need a crypto wallet to store your cryptos (such as ether). But not only will you be using your wallet for that, you will also be storing your NFTs in your wallet. Metamask is one of the most popular crypto wallets out there. You can get Metamask by going to metamask.io website. 

Crypto wallets are of paramount importance to any NFT collector and it’s essential to keep them secure and know a few basic security tips - so we dedicated an entire video to them to help you get started!

Converting your local currency to ether is a piece of cake with very many cryptocurrency exchanges existing to help you do this.

Sedition does not have a preferred exchange and we recommend you to do your own research to make sure you’re dealing with a reputable, regulated and established centralized exchange. That being said, Coinbase is considered one of the best exchanges for beginners to use. Despite higher fees than some of its competitors, a simple interface and a straightforward verification process allows you to buy some ether in no time!

In addition, there is an option to buy ether through Metamask's own integrated solution. Become familiar with both options from our step-by-step tutorial on buying ether:

You can use Etherscan to check the status of your transaction. 

Simply input your wallet address or the transaction hash in the window on the site and you’ll be able to see the status of your transaction. 

An NFT is always bought with cryptocurrency such as Ethereum by utilizing your crypto wallet. 

NFTs are bought either directly from the issuers of NFTs (for example, artists or companies such as Sedition) or they can be purchased on the secondary marketplace from existing NFT owners. The largest and the best-known NFT marketplace is called OpenSea.

In order to buy an NFT, you need to first connect your wallet - for example, your Metamask - to a website which supports the technology, such as Sedition or OpenSea. To connect the wallet, you need to select the Connect button from the website, which triggers your wallet extension to open up and prompt you to sign in and verify yourself to the site. Only connect your wallet to reliable services!

Once the wallet is successfully connected, you’re able to browse the website and pay using your digital currency - your ethers. Whenever you’re paying, you will be prompted to confirm and sign the transaction in the Metamask with your password - similarly to how you enter a PIN code whenever you pay with a credit card. 

So in summary, once your wallet is set up and you have some currency in your wallet, you can buy on the primary market, you can buy on the secondary market - the options are endless. 

NFTs can be sold to other NFT collectors on secondary marketplaces such as the aforementioned OpenSea.

OpenSea is an open market, so NFT collectors themselves determine the price at which they want to list their NFT. If you want, you can go to OpenSea and list an NFT for a million dollars - it probably won’t sell (it may though, some NFTs sold for much more than that), but the world is your oyster in terms of choices. You choose the listing price and the potential buyers choose what they are willing to pay. 

Yes they can. But only if they know your wallet address. 

A fundamental feature of the blockchain technology is decentralization, all transactions on the chain are therefore visible to all participants. However, the transactions and the wallets are typically anonymized - you will not be John Jones to other network participants, instead, you will be wallet 0xb794f5EA0BA38494CE839613FFFBa74279579268. 

So if you share your crypto wallet address to your friend, they will be able to track your ownership and transaction history.

Yes, you can. NFTs are tokens on the blockchain, they can be transferred just as easily as cryptocurrency. You just need to have the recipient’s crypto wallet address. 

You can see your NFTs in your crypto wallet, you can make a transaction to another wallet just like you would transfer money - e.g. ether itself.

Do remember though that transferring NFTs between wallets isn’t free - you will need to pay gas fees for any and all transactions on the blockchain.

No, NFTs can no longer be considered a major polluter.

Climate change is of grave concern to many artists and collectors in the Sedition community, and of course the Sedition team. We take these issues very seriously and it is for this reason that we have waited until now to enter the NFT space. Indeed, it is a known fact that the proof-of-work consensus mechanism that was previously utilized by the Ethereum blockchain consumed enormous amounts of energy. Producing this much electricity did inevitably cause emissions.

However, Ethereum has switched to an entirely different consensus algorithm in September 2022, called proof-of-stake. That algorithm has reduced the energy consumption of the Ethereum network by more than 99%, making Ethereum virtually carbon neutral. 

At Sedition we were making a very limited use of the Ethereum blockchain until we were satisfied with the underlying technology - and we are now that the shift to proof-of-stake is complete.