A few months ago, my friend’s 6-year-old son showed me a drawing he made on his mom’s tablet. “This is my spaceship dog,” he said proudly. His mom then joked, “He wants to sell it as an NFT now.”
That made me smile, but also think, how would you explain NFTs to someone who doesn’t even know what a “file format” is, let alone something as abstract as a non-fungible token?
Let’s be honest, most people (even adults) don’t get NFTs. It sounds like tech mumbo-jumbo. But at the heart of it, it’s a really simple idea.
So in this post, I’m going to explain what NFTs are, why people buy them, and what makes them special, like I would to a 5-year-old, with real examples and stories!
What is an NFT?
Let’s break it down by imagining something from everyday life.
Pretend you drew a picture
Let’s say you draw a super cool picture of a purple dinosaur riding a skateboard. You show it to your family, and they love it. Now you decide to keep it safe, so nobody else can say it’s theirs.
So, you sign your name at the bottom of the paper. That proves it’s your drawing. Even if someone takes a photo of it, they can’t say they made the original.
NFTs work in the same way, but on the internet!
How it works in simple terms
- NFT stands for non-fungible token
- Non-fungible means it’s one of a kind
- Token is like a digital certificate of ownership
An NFT is like a digital sticker that says, “Hey, this picture, video, or file belongs to this person, and only one original exists!”
Even if 1,000 people copy or screenshot it, only the person with the NFT has the real, original one.
What makes an NFT valuable?
This is where it gets interesting, and a little weird.
Imagine you have a toy. It’s a limited edition, and only 100 were made in the world. Even though it’s just plastic, collectors love it because it’s rare.
NFTs work the same way, but the toy is digital. It could be:
- A cartoon monkey (like in Bored Ape Yacht Club)
- A short animation
- A meme
- A music clip
- Even a tweet (yes, really)
Let me share a quick story from a Quora thread I read:
“I created an animated GIF in 2021 just for fun. One of my online followers asked if I could mint it as an NFT so he could buy it. I laughed, but did it anyway. He paid me $150. For a GIF I made on a Sunday afternoon.”
So, why would someone pay that much? It’s not about the file, it’s about:
- Ownership
- Scarcity
- Proof that you have the “real one”
Think of it like owning a signed poster of your favorite band. Sure, others can print it out, but you have the one with the signature.
How do NFTs work?
Okay, let’s get into the fun tech part, but in plain English.
NFTs live on something called a blockchain, just like cryptocurrency does (like Bitcoin or Ethereum). Think of blockchain as a giant public notebook that everyone can see, but nobody can secretly change.
When someone creates (or “mints”) an NFT, a special entry is written in this notebook saying:
- What the item is (picture, video, etc.)
- Who made it
- Who owns it
- When it was created
Once that entry is made, it’s there forever. You can’t rip out the page or erase it. This makes it super easy to prove who owns what.
Common NFT-related terms (explained simply)
| Term | Meaning in plain English |
|---|---|
| Minting | Creating a new NFT |
| Wallet | Like a digital locker to hold your NFTs |
| Blockchain | Public online notebook that stores NFT info |
| Ethereum | The main blockchain where NFTs are stored |
| Gas fee | A small fee you pay to mint or transfer NFTs |
Why do people buy NFTs?
This is one of the most common questions I get, especially from people who think it’s just rich people spending money on nothing.
Let’s look at a few real reasons people buy NFTs:
1. They’re collectors
Just like kids collect Pokémon cards or stamps, adults collect digital art. Some even create virtual galleries.
One Redditor wrote: “I bought a pixel art NFT because it reminded me of old GameBoy games. It felt personal, nostalgic. I don’t care if it ever goes up in value.”
2. They hope it gains value
Some treat NFTs like investments. They buy early, hoping the NFT becomes popular later.
- Bought an NFT for $100
- The artist gets famous
- Resells it for $10,000
But like any investment, there’s risk. Some NFTs lose value, too!
3. They support creators
NFTs give artists a new way to make money. Instead of begging for likes or selling through galleries, they can sell directly to fans.
And with smart contracts, artists can earn a % every time their NFT resells in the future.
Is it all just hype?
Here’s the thing: not all NFTs are valuable or worth buying. A lot of people jumped in just to make a quick buck. That led to:
- Overpriced junk
- Pump-and-dump schemes
- Scams and stolen art
But the idea behind NFTs, owning unique digital stuff, is here to stay.
And people are finding cool uses beyond just art:
Future use cases of NFTs:
- Gaming: Own rare skins, weapons, or characters that you can use or sell
- Tickets: Concert tickets as NFTs to avoid fraud
- Memberships: Owning an NFT could give you access to online clubs or events
- Education: NFT certificates instead of paper diplomas
So while the hype may come and go, the tech is evolving.
NFTs are like digital treasure!
Let’s go back to our purple dinosaur drawing.
If you made that picture and sold it as an NFT, the person who buys it doesn’t just get a copy. They get bragging rights. They get proof that they own the one and only original version. That’s powerful in a world where everything is copy-paste.
But like anything valuable, NFTs are only as good as what people believe in. If people believe your art, your music, or your game character is worth something, they’ll pay for it!
So here’s what I suggest:
- Learn by doing: Try making a free NFT on platforms like OpenSea or Rarible.
- Don’t spend big until you know the game.
- Focus on what’s cool to you, not just what’s trending.
Common questions about NFTs:
| Question | Quick answer |
|---|---|
| Can I screenshot an NFT? | Yes, but you don’t own the original. |
| Do NFTs harm the environment? | Some do, but eco-friendly options exist. |
| Are NFTs only for rich people? | No, many are free or under $10. |
| Can I make my own NFT? | Yes, anyone can mint one. |
| Is it safe to invest in NFTs? | Not always, do your research. |
Remember, even the wildest tech ideas were once explained in crayons and doodles. NFTs are just one of those ideas, and now, hopefully, you understand them better than most grown-ups.
Happy exploring!
Before you leave, check our blog explaining “Cryptocurrency“ in the simplest possible terms!
With over five years of experience in the tech industry, Kazim excels at simplifying complex topics, making them accessible to tech enthusiasts and general readers alike.
He has contributed to several renowned publications worldwide, including WindowsReport and Allthings.how, bringing insightful coverage of key developments in the field.
When he’s not writing, you’ll find Kazim planning weekend getaways or diving into tech verticals beyond his expertise.
