Key Components of the NFT Ecosystem

Let's take a closer look at NFTs, which have been in our lives since 2014 and have become popular all over the world as of 2021, reaching high sales figures:

NFT, a non-exchangeable (non-exchangeable) token, must be kept separate from the underlying content of NFT. This content can be digital files such as pictures, music, videos, or it can be physical assets in the real world. It is possible to convert a painting, sculpture or even houses or buildings to NFT.

Looking at the NFT genres, the most popular are art and especially video game elements. Apart from this, music, domain names, fashion, memes and gifs, social media content and collectibles also occupy an important place in the NFT market. An example of collection NFTs is the sale of the first tweet by Twitter CEO Jack Dorsey for $2.9 million. Notice that not every NFT is based on a work of fine art, music or cinema.

So, what exactly is the lifecycle of NFTs, which is seen as one of the promising applications of blockchain?

NFT Minting

The conversion of a digital file to NFT, thus creating/creating an NFT, is called NFT printing (“NFT minting”). While the majority of NFTs are minted on the Ethereum blockchain, NFTs can also be minted on blockchains such as Flow, Cardano or Solana. People with sufficient technical infrastructure can create the NFT of digital content themselves. Generally, user-friendly NFT platforms are preferred for creating NFTs. NFT platforms provide the tools and infrastructure needed to create and transact with NFT.

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NFT Marketplaces

NFTs are traded on NFT Marketplaces. Unlike crypto-asset service platforms (everyday cryptocurrency exchanges), NFT marketplaces generally do not require KYC/AML (“know your customer/anti-money laundering”) requirements to be met. NFTs can be sold on marketplaces at fixed prices or by auction.

Registering on an NFT marketplace and being able to buy and sell NFTs requires owning and connecting a crypto wallet to the platform. When choosing which NFT marketplace to trade on, it is important to consider the reputation of the marketplace, as well as fees, ease of use, support and resources. Usually, marketplaces do not accept fiat money and pay in Ether or another cryptocurrency.

Arkhemist is a reliable and easy-to-use blockchain-based platform where digital assets are created, crypto money can be earned from digital assets, these digital assets are recorded and kept safe with their digital identities, and their real identities are used in the creation of digital identities. On this platform, users can easily convert text, photo and video content to NFT and present them to interested parties. Auction and direct selling techniques can be used for sales. Arkhemist, a portal that will enable the creation, trading and use of new generation digital assets as a financial instrument, can be expressed as a marketplace that enables the flow of digital assets.

You can login to Arkhemist, where you can connect wallets created with blockchain technology, with secure remote authentication solutions. Thus, digital assets are kept secure. With these aspects, the Arkhemist platform offers all users the opportunity to easily access NTFs and invest through the blockchain.

What is included in the NFT?

During the creation of NFTs, smart contracts containing code and programming instructions or standards are used. Examples of these standards are ERC-721 or ERC-1155 standards. ERC is the abbreviation of “Ethereum Request For Comments” which is translated into Turkish as “Request for Comments”. According to the ERC-721 standard, each NFT must have its own unique identification number (TokenID) and smart contract address (“smart contract address”). Here's what we call NFT, a crypto-asset consisting of a unique combination of tokenID and smart contract address. There cannot be another token with the same tokenID and smart contract address.

Apart from the TokenID and smart contract address, the smart contract can also contain metadata such as the wallet address of the person who created the NFT, the person who created the work on the basis of the NFT, the name, description, picture of the work. In the NFT platform, digital content is uploaded to the platform and this information or metadata that is desired to be seen together with the NFT can be added to the NFT.

What does it mean to take NFT?

“Owning” an NFT means appearing on the blockchain as the owner of the NFT and having the right to transfer that token to others. In other words, people who buy NFTs essentially receive a token, that is, "data units". The important point is this: The fact that a person buys NFT does not mean that he also acquires a right to the content underlying the NFT. The person receiving an NFT does not acquire a right or authority over the content itself, such as video, image, tweet, underlying the NFT, but the metadata file for this content.

Consider one of the highest sales of NFTs, the Beeple NFT: The Singaporean who bought this NFT has not earned a copyright on the digital image file underlying this NFT. Keeping and displaying only the NFT representing this digital image file in your wallet; has the right to transfer this token to others if he wishes. However, let us point out this right away: It is possible to make a contrary determination in the smart contract, which regulates the rights and powers of the NFT recipient. Thus, the person receiving the NFT can also gain rights and authorities regarding the content underlying the NFT.

The person who buys NFT keeps the token in his own digital wallet. The person receiving the NFT becomes able to save on that token as a result of the transaction, and this change in token ownership is permanently and reliably recorded on the blockchain. It should be noted that multiple NFTs can be created for the same digital content. However, the metadata of each emerging NFT is unique.