NFT Fundamentals - Buy, Create and Sell NFTs

1. Introduction: Hi, Welcome to the NFT 2021 course. My name's Chao Gu and I'll be your teacher. In this first-class, I want to show you the topics that will be presented during the course. This is not just a theoretical course, but also a practical one. You are not just going to learn about non-fungible token since its creation in relation with blockchain. But also you are going to learn how to manage it on practice step by step. So let's see the topics that are going to be seen in this course. First of all, we're going to understand what are these NFT. Then we're going to see the fungibility factor and importance of blockchain technology and how it works related to NFT. We are also going to learn very quickly about smart contracts. Then we are going to see the history of NFT, how it was created, and how it developed through time. Then we're going to the practical part of our course. You are going to learn how to create, sell, and buy your own NF LFTs. Knowing the apps and websites you need to use and the steps you need to do since the beginning. But let's waste no more time because the world is changing fast. New technologies are born day after day and time is a coin with no change. So let's go. 2. What are Non-Fungible Tokens?: So first of all, let's understand what our n of t, n of t mean. Non-fungible token in these tokens are collectible tokens. Something that carries unique characteristics. And what would be this fungible thing? For a better understanding, I'm going to give you an example. Imagine that you have $20 in your pocket and you give it to a friend. And this friend takes this money, put it in his wallet that already has other dollars, and goes to the supermarket, to the mall, our chore restaurant. In the end of the day, he gives you back $20. You don't know if these $20 are exactly the same that you gave to him, the same piece of paper, unless you have written your name on it. But it doesn't matter. We're still $20. They have the same value when you gave it to her friend, and they still have the same value now that you'll receive it it back. It doesn't matter if the dollars are different. Since we know they have the same value. They are fungible. They can be changed it to other same $20 and it's okay, it doesn't change the value of it. But when we say non-fungible, That's right, the opposite. We are saying that something is unique, has unique characteristics, unique value. Let's use some examples. Paintings, saboteur Monday, the UNAR, the da Vinci, painted around the year of one hundred and five hundred unique, rare, special from a time that will never come back and buy one of the most brilliant human minds ever. It has unique characteristics, not only because of it hits story, but how it was created and the physical aspects of it, the wood was used, the oil painting, the details of the technique of the artist while creating it. And all these details together, they turn this painting into a unique piece of art with, was auctioned in 2017 for $450 million. The Scream by Edvard Munch. It's a non-fungible item. Also. There are only four of them on the planet. And although there are four of them, they are all rare. The author doesn't exist anymore. Do you were made in a time that will never come back, auctioned for $120 million. But that's not only about art. The book codecs licensor has a lot of tax and drawings made by Leonardo da Vinci around the ear of 1508. It was bought by Bill Gates for almost $31 million in 1994. So not fungible are always extremely expensive. Well, not always. It depends exactly about its market value. The value, the perception of it among the market, the society, among people in general, culture. So coins, CEUs, rare cards, cars, unique cloves. There are unique items on almost every area. Non-fungible items. Okay. So now we know what are the spongy bone when non-fungible items on the physical world. But what about the digital world? Well, we're going to see that in the next class. 3. What are Digital Non-Fungible Assets?: Okay, Now that we are ready know, what are these fungible and non-fungible items on the physical world? But what about the digital world? Well, we also have that. Let's see, some examples are fungible items. If theorem, Bitcoin, B&B, these cryptocurrencies, they are fungible. They have a market price. Yes. But they're not unique, not rare. It doesn't matter the code over cryptocurrency. One Bitcoin, same value of another one as $1, has the same value of another $1. They are fungible, they can be changed by other one will descend value. Okay. And what about non-fungible in the digital world? Well, that's where the n of t comes in. As the rare items. In the real-world. The N of t is has exclusive properties. They are unique. Some of them are considered more valuable than others for being extremely rare scars. And that's the reason why some of them are so expensive, so exclusive. And they are related to what we call the digital assets. I'm going to show you some examples. Mike Winckelmann, for example, an artist, spent five years of his life working and sharing his art on Instagram. And after five years, he gathered all of those arts, made a new one called people. And gathering all of these arts. He's so this new one as an NFT for $69 million. The first tweet in history also sold as an NFT by $3 million. And a one-off Ben Ski physical arts, whereas recorded in a live being burned and it was sold as an NFT for more than $300 thousand. And then some people can't ask me, why should someone paid for that? Well, for the same reason, why some people would pay millions for Mona Lisa instead by the Amazon's version of it. For much less. It's all about society. People's behavior and beliefs, the market value are a lot of the emotional side of these things and history. And then all these digital assets can be sold as an NFT. And then you asked me, okay, But I can just download that picture people. So by 69 million dollars with the same quality, the same pixels. And use it in my computer as it is digital art. It doesn't have physical aspects as Leonardo da Vinci's paintings have. Yeah, that's right. But you don't you don't have the ownership of it. You just have another copy. And do you know what make possible to check these ownership officially N of t allied with blockchain technology. But we're going to see that in our next class. 4. Blockchain and Smart Contracts: In this class, we are going to learn what is block chain, how it works, and what are smart contracts. And we are also going to see how NFT appeared. Well, talking very briefly about the blockchain. The blockchain is a technology which allows the existence of NFT. Blockchain works as a database so transactions can be recorded and validated. And how does it work? Block chain collects group information, which are known as blocks, which carries data. Each one of these blocks has a number and they have a logic sequence. And they go creating a chain of blocks. And that's where the name came from. And in this logic sequence, each block has its own hash as a digital print of each one. So each block has its number, like a serial number, but it also contains information of the number of the previous block. So all the blocks are linked through a logical sequence resolved by a math equation. And that's why it requires a lot of computer processing to resolve it following the equation rules. And when these numbers are discovered, they can be sold. And using what? The cryptocurrencies, bitcoin, ethereal. The cryptocurrencies are the remuneration for these blocks. Now remember that I told you about the digital assets. Well, so people on the Internet wanted to use these cryptocurrencies in order to transfer these assets. But there was a problem. The bitcoin, as I told you, it's fungible, it's not unique. So something non-fungible was required in order to record the ownership of these acids. Something unique and that will culminate on the existence of the N of t. So let's go back in time. Right after Bitcoin was created, people tried to transfer these digital acids and tried to record its ownership. But the problem was that Bitcoin was fungible. So the first attempt of doing that was through the colored coins in 2012, so that the ownership of these assets were recorded in a transaction using the Bitcoin. It was an improvised, but was the first attempt of doing it. Two years later in 2014 came the second attempt of doing that, which was through the counterparty. And it's to exist nowadays. But keep in mind that it still used Bitcoin transactions in order to record all the information. Now, in 2017, to games came to use these and FSTs, crypto punks and crypto kiddies. So instead of using Bitcoin, people started using a theorem in order to do these transactions. And a Y that because it can use smart contracts. Why? Using a theorem? Okay, so let's open a parenthesis over here in order to explain to you what are smart contracts? A contract, as we know, is an agreement between people or companies. In a contract, rules and claws are defined in order to guide how things will happen in how people in companies we work. The smart contracts are these rules into the digital world that are executed into the if theorem. They are called smart because some of its rules can be executed without human interference. And that they are as computer softwares installed in a huge amount of servers in the world. This way, if one server fails, other one can take its position and keep working. And its roots cannot be changed. Our fraud it and I'll eat execution remains recorded on block chain. They are contract models extremely reliable. And the smart contracts for blockchain a theorem, are accessible to anyone. You just need to have ether know some code language as Viper, and use remix, for example, to publish your contract. And it's accessible on all over the world. And now let's go back to the creation. Of N of t. In 2017, one of these first games to use NFT was the game called cryptocurrencies. It's a game in which the players had cats and these cats had unique characteristics. There was no cat like another. And so some of them were extremely rare and consequently they worth more money. And the N of t started being used to put a mark on those digital assets to put a token certifying its uniqueness and ownership. And so it began in the game industry. And as people were using NF2 to certify the ownership of digital assets on games. So we're not using one, not doing it. Certificates. Something also unique, has art, for example. And then it started painters, musicians. And what guarantees that you own the unique digital art, the unique digital asset, the original one. Well, it's exactly the recording of this art on blockchain, this NFT. And even being a new technology. A strange in, and strange for some people to believe on. How can these be reliable? Let me guide you through a view, perspective of the situation in terms of authenticity of assets comparing to the physical world. You buy a painting from someone strange, someone that you don't know. How do you know it's an original painting? Well, you need to call an specialist, someone that studied a lot to verify the physical aspects. Did degradation of the material used, the kind of used match with the kind of use that artists used. The technique, style, unit, time, money, and someone to guarantee you that, that piece of art is the original one. When you buy a digital asset, the NFT carries all the ownership registers since the first registration on that asset. So you can verify on block chain it's originality and more. It contains digitally information about all the transactions suffered. Buy that asset, everyone who owned it. You don't need a technician, a lab to analyze it. It's all registered on blockchain. And now we can start the particle part of our course. You are going to learn how to create, how to sell, and to buy your own N of t. Let's go. 5. How to create your Wallet ?: So let's start the practical part of our course. Let's create our first NFT. So in order to do that, we need to have a wallet. And there's a variety of wallets that you can use. Wallet connect, wallet link for medic Matter mask. I'm going to teach you how to use the madam mask and why that. Because that's one of the most used wallets, extremely stable, reliable, and acceptable across most used platforms. So let's first install the MetaMask extension on Google Chrome. These extension allows us to access the applications which use the theorem. And we can call them daps. So let's go to the Google and type Madam mask. Yeah. And on Chrome. Let's click over here. And let's click on download now. All right, and this extinction, notice that you can use it in iOS or Android, but we're going to install it on Chrome. Okay, so let's click Add here at Chrome extension. Let's wait. And that's it. We have the MetaMask installed. Now let's prepare it. Click on first steps. And in this screen, the Meta mask is asking us if we already have the root sentence, because every MetaMask wallet has a 12 words sentence linked to it, like a bank password. Okay, so let's create a new one. Let's agree. And you're gonna choose password. You're going to create your password. I'm going to choose my here. Okay, Let's click and accept. So you have a video here that you can watch for you to understand more how it works. So now you are going to have your own 12 words centers. It is linked to your wallet and can be used for at backup. And remember that these 12 words, they protect your wallet. If anyone has them, you're all it is in danger and you can lose your cryptocurrencies. And a tip here, and it is an extremely valuable information. Don't use digital ways to save it. Don't take pictures. Don't save it on your drive, print screen or whatever. Write it on a paper and keep it save as their bank accounts password and be aware of the order of the words are right. So so now you're going to click and review your own 12 words. I'm gonna do here. And you are going to write it on paper and click Next. So now in this new screen, you're going to select the words following the correct order. This is this a procedure just to check if you save it it right. And now we can click on Confirm. And that's it. Your wallet has been created. 6. How to create a NFT?: Hi. Now that we have our wallet created, let's create our first NFT. I mean, Let's mind it. That's the word we use when we are going to create non-fungible tokens. You need to use the platforms and we need to have an account on them, the websites. So we can use a variety of marketplace, should do it. And on these marketplaces, you are going to be able to mind by Ansel your NF T's. And each one of these marketplaces uses an specific cryptocurrency. Some of them accept etre, some accept bakery token and other kinds. And like a real wallet on which you can carry sorted money from different countries. Here the wallet works like that. You can have ether, but you can also have other cryptocurrencies in your wallet. So let's go for it. So we have a great variety of websites. And in this course, now we are going to enter the variable.com, one of the most used ones. So here on Google, let's type relatable. Variable.com. Hit Enter. Let's join in. Okay. And when you went to the website, you can see here a variety of NF T's created by other people. They are also divided into categories. Here, art, photography, games, music, memes, and you can explore here. Alright. So we are here on the website and the first thing you need to do is to activate the extinction of MetaMask. So here on the top, Let's click and let's pin the Meta mask. And when we click on it, you're going to be able to see the amount of ether you have on it. And you can also do other things like you can buy sand or swap cryptocurrencies. Okay? So first, let's click here on Connect wallet. One Click Here. We have a variety of wallets that this website accepts. In this case, we are going to use the Meta mask. One click. Okay, we're ready, connected. And now in order to create our NFT, Let's click here on the top on Create. And now you have an option to create a single one. Nft are multiple ones. Let's click for example on simple. Okay? Start from scratch. Here you are going to choose a file you want to upload to the website. In this case, I'm going to send this image. And you can choose if you want to sell for a fixed price or do it in an action, we've defined our Olympian oxygen here. You are going to select the price, okay? And you have a variety of cryptocurrencies Here, accepted by this website. So for example, I'm going to type here ten. Okay, then ether, That's too much. One, ether. Okay? You have a service fee here. I'm going to put here 0.1. Okay, That's better. Here. You can choose the collection, you can create a new one, are used the variable rarely collection. Here you can put the TI title of your NFT, for example, coffee shop. My coffee shop, a description key, for example, my render and royalties. And what these royalty means is it means that when this, okay, When you sell your NFT for the first time, you're gonna get a 100 percent price of it. But after that, if someone keeps selling it to other people, you're going to receive some varieties on this transaction. So you can choose 10 percent, 20 percent, 30 percent. Okay, you can choose wherever you want. I'm going to keep here and 10% can, it can click also in show adverse its settings and can add here some properties which are optional, alternative texts. And yeah, we can click on Create Item. Mind. Okay? And let's remember when we want to create an NFT, it is a transaction block chain. So it has a fee. You're gonna pay for it, for creating it, you're going to pay this transaction. So that's why here in this screen, we have this gas fee. So that's the amount of cryptocurrency you're going to use two might to create your NFT. Here is the correspondence of it in dollars, okay. Here's telling you the amount of the cryptocurrency you have in your wallet. Okay. And I have an alert here telling me that I don't have currencies cryptocurrencies enough to create it. So I'm going to reject, if you want, you can create a ready, but I'm going to reject because I'm gonna tell you, I'm going to show you how you can create your first NFT for free. 7. How to sell a NFT ?: Hi. So in order to create your free first NFT, you can enter on the website mine table. You're going to type here on Google. Okay? We're going to enter here multiple dot app, one-click. And I am already logged in. So you're gonna create your own account. It's very easy process. And after doing it, the next step is you need to connect a wallet like we did in variable. We gotta make it here in my integral. So connect a wallet and we are going to connect our MetaMask. So welcome. Again. I'm going to type here my password. Okay, Next, Let's allow and that's it. Our account is already linked to this, to the website, the marketplace. And you can see here other peoples in FTEs. Okay? And we are going to click on here, start 19 now on click and create a new item. No transaction fee, completely free. And you can choose here, the advanced ones are easy. Let's click on the easy one. Okay? So you're going to first choose here the listing tile. So can be the same name as the name of your NFT. So for example, coffee shop. Coffee shop or my coffee shop. And subtitle my rendering. My render. What kind of item are you making? Making you can choose here. I'm going to choose art. And you are going to upload the eating preview image of one of my image over here. Ok. And you can type a description of your NFT. My own coffee shop, render. Okay? And here you have the option to transfer, transfer the copyright when someone buys it, Okay? Then you give this person the right to use this eat-in commercially. Okay? So you can type it. You can choose this option or not. Our uncheck it according to your, your interest. And here you can choose the fix-it auction, auction with by now. Okay? So for example, fixed price in US dollars, I'm going to type 10 dollar for example. You can choose here from dollars to ether. So you can type the ear, the price here, I'm going to type in dollars, so $10 and you have here this price in ether, okay? Because today you have the current price of ether today when eater the same as $2 thousand. Actually, I'm going to turn here $12 and at least this item, you are about to send one transaction to the blockchain. Just sign a message in your wallet, your mind, and this this item. So let's click on Proceed and sign. And that's it. We have our first n of t ready created over here. Okay. 8. How to buy a NFT and Final Thoughts : Hi. Now that we are ready know how to mind our LFTs, let's learn how to buy it. So in knowledge by it, we need our wallet. In this case, we're using the Meta mask. And that we need funds in our Meta mask. And we have two waves of adding funds, adding these cryptocurrencies to our wallet. And let's click in our Meta mask, okay? And we have ADP directly through MetaMask nourish you add the funds so you can click here on by n. You can use the wire. Okay? So if you click on it, you're going to be able to use your debit card or use the Apple Pay. And this is your ether address to your wallet. Remember that you always going to have to pay a transaction fee and a network fee. But these fees are not fixed. So if you spend, for example, $10 over here, $10, okay? You're going to pay the same fees. Fu we're spending a $100 look. Okay, but if you'll buy $2200 instead, you're going to pay more fees. But maybe it's warfare. So check the range of money you want to spend on that so that you don't lose money. In this case, if I add here $10, you're gonna be paying $5 in transaction fee and $0.51 on network fee. So it corresponds to more than 50% just on transactions fees. While if you were spending, for example, $100, you would be paying the same dollar amount. But in percent, percentage, you're going to be paying less than 6%. So have an eye on that. So that you avoid making a lot of small transactions. Because maybe make a big one is better. Okay, so that's the one of the two ways of adding funds to your wallet. And the other way is B9 cryptocurrencies through the exchanges. Okay, So let's come back here. So if you notice here on our wallet, can click here in by end here. You can click here. And you will notice that on a wallet we have this address and this QR code. This is the address of your wallet, and it only works to receive cryptocurrencies. So that's no problem for me to share my address here. So you can directly send ether or other, other cryptocurrencies using this address. So there are some exchanges that you can use. For example, you can use violence. Very famous one. This is a very famous exchange, very reliable and stable. It's the most used, one of the most usage. So you can enter on it. You are going to create your account. And it can't simply by the cryptocurrency you want and send to your wallet. Remember the address that I just showed you? Your wallet? You're going to use it. Okay? So here, if you come here to the bottom, you're going to see the prices of some cryptocurrencies on, related to the dollar. Okay? So for example, here you have Bitcoin B&B, the theorem, the, the ether of the theorem that we've been talking about, which is the cryptocurrency that this marketplace that we've been dealing with, the US. And you can see also the change on the price of it. So it is, it has raised more than 70 percent in less than 24 hours. And you can see there are other variations over here. And remember that you don't need to buy one ether, one full ether for this amount. This amount of dollar, it can, by an amount of it. Okay? You don't need to buy the whole ether. You have, we have other exchanges as well as Coinbase, very reliable, very famous one. Look, you have here the, the dollar curves correspondence. We have another one, cracking. Very famous, very reliable. Also. Gemini, another one. Okay, you can also buy your, your crypto currencies over here. And in order to buy. So we're going to buy cryptocurrencies and we're going to send to our wallet. And after sending it to our wallet, we're going to use the marketplaces, the stars, Dolan stores of NFT to buy. Okay? And they are usually the same marketplace. And where we can create our n of t is through, remember that you need your wallet on k. Remember, we're already using MetaMask. The MetaMask allows us to make this connection between our wallet and the cryptocurrencies will have to the marketplace, okay? And we have several websites you can use. For example, all open C will have lot of N of t is over here. You can check the price of it. K. Remember, this is the ether price. Look, we have here a crypto kitty. I have several. You can sort by categories. So for example, let's suppose I want, this does dark over here. I have, I have the amount of ether that it costs and the amount of dollars corresponding to it, okay. And its price history. Okay. And you can just buy it. You have here other information like the amount of view it has, receive it. Because you need to take care about extremely high priced in FTEs that no one pay attention to it. So there's a lot of speculation in FTE, so be aware of there so you don't lose money. Another website you can use is the variable. Okay, just connect your MetaMask on it. And you can, you can serve food categories over here. Choose N of t you want. Okay? Some of them. Your inaction and you have a time to try to buy it. Baker swap, the very interesting one. And they use another cryptocurrency, which is the bakery token, okay? They don't use ether. But you can buy the bakery, bakery token oscillating in violence and you can send to your wallet. If you click here on NFT marketplace, you're going to see the marketplace that, that exists here. Okay? If you click here on exchange, you can swap, okay? Some cryptocurrencies, super rare. Also a very famous websites where you can buy your LFTs, but is more related to art, to digital art. So notice that each website has its own niche. Some are more generalists. Don't focus, but for example, the suburb for focus on art. So you can look for the NFT is that you have interest. Thank you for watching this class. I hope you have a very successful career. Good investments. See you and thank you.