What are NFTs?

There’s a lot of misinformation out there about NFTs. That’s why we at Edenswell believe it’s essential to clear up the confusion and paint an understandable picture for our customers of what NFTs are and how they’re being used.

So, what are NFTs?

NFTs have three essential traits:

First, they’re uniquely identifiable.

Second, their uniqueness makes them scarce.

Third, unlike cryptocurrencies which can be divided infinitesimally, NFTs are indivisible.

An analogy may help here. NFTs are like an autographed painting from your favorite artist, complete with a certificate of authenticity. There’s only one painting and certificate that’s exactly like that one. Someone may be able to make a print of it, but they won’t have the original. Likewise, it’s not interchangeable like a dollar bill would be. One dollar bill is as good as any other (as long as they’re of the same denomination). But one Picasso can be drastically different in price (and design) from another one.

To put it simply, every NFT is utterly unique. That’s what makes them scarce and valuable.

So, when you purchase an NFT through Edenswell, you’ll have a unique cultural artifact that can’t be duplicated. The art, music, poetry, and other digital goods that you buy on Edenswell is one of a kind. And you can buy, sell, trade, and collect it as you would any similar physical work.

But How Are NFTs Valued?

If you saw the NFT artwork by Beeple that sold for $69 million last year, you may be wondering, “How do you know what an NFT is worth? Where does its value come from?” 

Does Edenswell just slap an arbitrary price tag on each piece of artwork? No. That’s simply not how value works – for physical objects or NFTs.

Whether autographs, stamps, or Pokémon cards, people love to collect things. That’s a huge part of what drives NFT value. With that in mind, think about how we determine the value of other collectibles. There’s no central authority that dictates a price. Instead, the price is determined by what people will pay. This is true of anything unless the government intervenes and places a ceiling or floor on the price.

So, the fact that Beeple’s NFT sold for $69 million doesn’t mean that’s what it’s objectively worth. It simply means someone was willing to spend that. Thus, that was its value at the time.

So, when you purchase an NFT through Edenswell, you’ll pay the fair market price for it. In other words, these are the prices that people are willing to pay, not an arbitrary amount picked at random.

Traditionally, collectibles have been limited to physical objects. But the blockchain revolution has changed all of that. Today, it’s possible to own digital objects – even those that some people claim can be copied and pasted off the internet. But in order to understand how this kind of ownership works, you need to get a grasp on the blockchain.

NFTs & The Blockchain Revolution

Edenswell offers artists and collectors all of the benefits of the blockchain, including world class security, complete transparency, immaculate record-keeping, and more. Here’s how it works…

The blockchain introduced the idea of non-fungibility to the digital world by making it possible to identify and verify digital assets. While this was initially used exclusively to undergird the idea of cryptocurrencies like Bitcoin, these concepts were quickly applied more broadly. While a detailed explanation and analysis of blockchain technology would go far beyond the scope of what we’re trying to do here, there are a few concepts worth laying out if we’re going to understand NFTs.

First, you need to realize that the blockchain is basically a giant ledger, filled with verifiable transactions that cannot be altered after the fact. But these transactions (or blocks) aren’t restricted to holding numbers, letters, and words. They can contain just about anything, including digital files like images and videos. Since this ledger is stored on thousands of computers across a network, all of the transactions are public and connected. This means that everyone on the blockchain can verify the object in question. Thus, digital assets can be made unique and identifiable.

But the blockchain doesn’t just offer a way to store and verify objects. It also makes it possible to implement smart contracts which automatically execute when certain conditions are fulfilled. Thus, a particular digital asset can be limited to a certain number, further increasing scarcity and driving up the value of the NFT in question.

But What Are NFTs Used For?

This is one of the most common questions that comes up when discussing NFTs.

A painting can be hung on a wall. A stamp collection can be placed in a book and set on a coffee table. Pokémon cards can be traded or played. But what’s an NFT good for?

It’s important to remember that NFTs are still in their infancy. As a result, their uses today don’t compare to what will be possible in the coming years. And yet, they’re already being used in some incredible ways. The rise of the play-to-earn (P2E) gaming industry makes it clear that there’s a tremendous potential for NFTs. But that’s only the tip of the iceberg. 

The potential uses for NFTs are endless. Edenswell has already partnered with dozens of nonprofits, influencers, and sponsors to offer exclusive NFTs to collectors around the world. But purchasing digital art and other cultural artifacts on Edenswell won’t just benefit creators. It will also make a difference in the world by empowering nonprofits that are doing incredible work.

With Edenswell, you can make a difference in the world and in the lives of artists by purchasing high-quality NFTs. And getting started has never been easier. Click below to join the Edenswell community!