Do you have this great new business idea or getting ready to launch a startup, and you want to embrace the new world and create your own NFT? Do you have an existing business and want to know how to capitalize on a NFT without writing a single line of code?
We will guide you along the journey and help you in all aspects
of NFT creation and distribution. You will learn how NFTs are working and show
you how to easy it is to use our solution to create your own NFT and determine
whether your business needs it.
What is a NFT?
NFTs can be used to turn digital creations, such as digital
art, video game items, and music files into tangible commodity that is easily
sold, verified and transferred. Access to any copy of the original file,
however, is not restricted to the owner of the token.
NFTs should run on a proof-of-stake blockchain, such as
Omnibasis platform.
NFTs are not mutually interchangeable, i.e. not fungible! An
NFT is created by uploading a file, such as an artwork, to an NFT platform run
by Omnibasis. This creates a copy of the file recorded on the digital ledger as
an NFT, which can be bought with any currency and resold. Although an artist
can sell an NFT representing a work, the artist can still retain the copyright
to the work and create more NFTs of the same work. The buyer of the NFT does
not gain exclusive access to the work, nor does the buyer gain possession of
the "original" digital file. A person who uploads a certain work as
an NFT does not have to prove that they are the original artist, as this
creates a dilemma for the art forgery.
Anonymity, decentralization, and security are among its main
features. A NFT is not regulated or tracked by any centralized authority,
government, or bank.
NFT is a new phenomenon in our world and it is used just
like a normal certificate of ownership but in a digital form and exists only in
digital world. No single centralized platform controls the NFT and there is no
central authority. NFT is based on a technology called Blockchain.
Blockchain is a decentralized peer-to-peer (P2P) network,
which is comprised of data blocks that are based on encrypted data that is
verified to be correct and agreed upon by all users and that cannot be changed
retroactively. These blocks chronologically store information about
transactions and adhere to a protocol for inter-node communication and validating
new blocks. The data recorded in blocks cannot be altered without the
alteration of all subsequent blocks.
Individuals and companies have embraced the benefits of the
Blockchain and are starting to think about how to embrace those new NFTs.
Benefits of having your own NFT
NFT can be used to cause artificial scarcity of a digital creative work by making only one NFT of that work with a unique signature. NFTs of artworks are therefore similar to autographed items. The unique identity and ownership of an NFT is verifiable via the blockchain ledger. NFTs have metadata that is processed through a cryptographic hash function, an algorithm that calculates a unique sequence of letters and numbers. NFTs are also used to create the possibility of asset interoperability across multiple platforms.
A growing list of the markets and industries are being
disrupted by new ecosystems formed with the Blockchain technology and running
on Omnibasis.
Here are a few reasons why you should create your own NFT today:
1. Eliminating fraud risks - NFT is
impossible to counterfeit and no party can reverse or change past transactions.
2. Providing transaction anonymity -
customers choose what information to share with the other party in the
transaction.
3. Cutting down operating costs - NFT is
free from exchange or interest rates, as well as the high transaction charges
traditional banks apply.
4. Anytime, anywhere transactions - no
holidays, no business hours or geographic location limitations, NFT
transactions are borderless and instant.
5.
Providing
security for certificates – with no central government in charge, NFT is a
decentralized system, where no one can seize or freeze your assets.
Use for Digital Art
Digital art was an early use case for NFTs, because of the
ability of blockchain technology to assure the unique signature and ownership
of NFTs.
Use for Collectibles
NFTs can represent collectibles like card collections but in
a digital format.
Games
NFTs can also be used to represent in-game assets which are
controlled by the user instead of the game developer. NFTs allow assets to be
traded on third-party marketplaces without permission from the game developer
Use for Music & Videos
Exclusive contents like music and videos can be tokenized
with NFT.
Use for Domain
NFT is being used as blockchain domains that represent
particular crypto domains.
Use for Land Ownership
NFT acts like a real estate in the virtual world. Landowners can build and monetize their plots by leasing out.
How Does a NFT Work?
As mentioned, NFT is widely accepted use case of the
Blockchain technology Distributed ledger technology is built on the consensus
algorithms regulating the creation of new blocks. All participants in the P2P
network have to accept a block for it to be registered on the Blockchain. There
are several types of consensuses with PoW (proof-of-work), PoS
(proof-of-stake), DPoS (delegated proof-of-stake), and PoA (proof-of-authority)
among the most popular.
With Bitcoin, for example, a small amount of cryptocurrency
paid every time a new block is created (consisting of the transfers of crypto
currencies between users) and is used as a reward and incentive for Blockchain
participants taking part in the consensus mechanism and closing blocks, i.e.
allocating their processing power, stakes of coins, and other resources to
support the transparency and trust of the Blockchain and to verify new blocks.
NFT holders can transfer NFT assets between wallets (theirs
or other users) via the Blockchain addresses, exchange it for fiat money, or
participate in cryptocurrency trading. Everyone on the network can view
transactions, while the identities of the people behind these public addresses
remain anonymous, as they are encrypted by unique keys that connect an
individual to an account.
Difference between NFT and Coin
Blockchain based assets can be divided into two large
subcategories – coins and tokens. They are both blockchain assets, but what is the
difference between a coin and a token? It all comes down to these three points:
1.
A coin
operates on its own Blockchain where all transactions occur while tokens
can operate as a “different Type of transaction” on the existing Blockchain protocol.
Examples include Bitcoin or Ethereum, all of which operate on a different
Blockchain. If you want to create your own coins, you need to first create your
own Blockchain. Do not worry, Omnibasis provides Blockchain-as-a-service, where
you can launch your own Blockchain network without a need to worry about a physical
infrastructure.
2.
A token
works on top of an existing Blockchain infrastructure that can handle multiple
types of tokens, like the Omnibasis platform or Ethereum (which really is a
token that runs on its own Blockchain). Tokens are often used as smart
contracts, that represent everything from the ownership or characteristics of
physical objects to digital agreements about services, or the most common use
case on today is to represent a NFT.
Anyone can use Omnibasis or Ethereum as the underlying technology to create a
new token. Today, the primary use for tokens is a non-fungible token (NFT),
which helps owners of unique asset to monetize it through a sale of those
tokens to investors. This is one of the main reasons why individuals and companies
are starting to consider the question of how to create a NFT in the first
place.
In short: tokens are limited to a specific project,
while coins can be used anywhere are considered an accepted store of value.
3.
Coins buy
tokens but tokens can’t buy coins.
For example, think about tokens as your Frequent
Flyer Miles while coins are the actual dollars in your wallet. You can use both
to get an airplane ticket, but with the miles, most of the time, your choice
will be limited to the airline that issued them, while with the actual dollars
you can choose any airline you want.
You can buy frequent flyer miles using coins, but you
cannot get real money using frequent flyer miles. So a cryptocurrency coin can
be used to buy a business’s token, but you can’t buy a cryptocurrency coin
using a token.
Advantages and Disadvantages of NFTs
Consider the following pros and cons of NFTs and why you
should use a NFT.
Advantages of NFT:
1.
Decentralization
Built on the Blockchain, NFTs are independent from
any authority and ensure that no one can dictate the rules for on how those NFTs
are used and transferred by users and owners.
2.
Fast and
unlimited transactions
A money transaction via 3rd party usually
take a significant amount of time to be processed and settled. You will end up
waiting for days to receive money. With NFTs, you can create an unlimited
number of transactions and send it almost instantly to anyone with a crypto
wallet, anywhere in the world.
3.
Low
transaction fees
3rd parties charge considerable
transaction fees, the larger amount of the transaction, the higher usually the
fees. This doesn’t mean that you don’t need to pay a fee for NFTs transactions;
however, the amount you need to pay is relatively small. For example, on
Omnibasis, the cost of the transaction is as low as $0.01.
4.
Accepted
internationally
The sender and the recipient of funds can be in
different parts of the world to exchange NFTs and you will not encounter any
currency conversion fees that always accompany international transactions
during normal transfers.
5.
Transparency
and anonymity
Thanks to the distributed nature of the Blockchain,
every transaction is recorded and the record is immune to changes forever. In
addition, if a NFTs address is not publicly confirmed, no one will know who
made a transaction and who sent or received the NFTs.
The disadvantages of NFTs:
1.
Limited
acceptance
Governments and countries are very hesitant about
granting any NFTs their support. On the other hand, businesses and individuals using
Omnibasis find a great use of NFTs in monetizing asset value.
2.
High
volatility
Most well know cryptocurrencies, like Bitcoin for
example, are highly volatile,. It is not a safe place to store value and highly
risky to invest in cryptocurrencies, as you never know whether it will be a
profitable investment or not. On another hand, businesses running on Omnibasis,
often peg the value of their NFTs to some stable currency like a dollar to
manage this risk.
3.
Transactions
are non-reversible
Once you hit save and submit a transaction to the
Blockchain, it will take a tiny amount of time to get recorded and once
recorded it is not reversible. There is no way to reverse, back out or dispute
a transaction. You still can send a request for a refund to your business
partner and ask them to send the same amount back, but if it is declined, there
is nothing you can do, as the value of the NFT was transferred to another
party. On Omnibasis, users have an option to use a paraphrase
to secure transactions. It creates an extra security and to verify it is really
you before you click submit.
4.
NFTs security
When you store your money in the bank and lose your
bank card, the bank will try to verify your identity with a government issued
ID and will issue you another bank card. This is not the case with NFTs, if you
lose your hard wallet device and forget the paraphrase or private key, you will
lose the access to your NFTs wallet forever. If you lose your hard wallet, but
still have your paraphrase or secret key, you can reclaim your wallet contents.
On Omnibasis, paraphrase is an option, in addition your private keys are triple
encrypted and can be stored off-line.
Consider the above advantages and drawbacks when you
evaluate a NFTs for your business or your asset monetization.
How to Create a NFT
If you are convinced that owning your NFT can boost your business or your asset value, let’s walk through the main steps you need to take to build your own NFT.
1.
Understand
your use-case
What is the purpose of the NFT for your asset? Do you
want to capture an intrinsic value to your unique assets? Do you want to use
latest anti-fraud mechanism manages your collectibles in a secured environment?
Do you seek transparency of the blockchain which offers to track each
transaction among the community? Read why
businesses large and small are turning to Blockchain technology.
2.
Choose a
consensus mechanism
Consensus mechanisms are the protocols that consider
a particular transaction legitimate and are used to agree on which transactions
should be considered legitimate and will added to the block. There are a number
of different protocols and your choice will tie you to one or another Blockchain
platform.
A.
The
proof of work (POW) is a common consensus algorithm used by the a popular NFTs
networks like Ethereum, and requires high energy consumption and longer
processing time by computers trying to solve a mathematical puzzle for every
single block.
B.
The
proof of stake (POS) is another common consensus algorithm that evolved as
a low-cost, low-energy consuming alternative to POW algorithm. It involves the
allocation of responsibility in determining the next blocks and hence maintaining
the public ledger for each participant node in proportion to their stake in the
outcome of the result (aka ownership of coins) and is most often implemented
via the Byzantine Fault
Tolerance mechanism.
3.
Pick a
Blockchain platform
Your choice of a Blockchain platform will depend on
the consensus mechanism you want to use. To give you a better idea of what is
out there, here is a list of the most popular Blockchain platforms:
·
BigchainDB (supported on Omnibasis)
·
Ethereum – not recommended due to the lack of an
enterprise support and use of the proof of work, which is a very slow in
committing transactions
4.
Design
the Blockchain Nodes
A node is an Internet-connected device that supports
a Blockchain by storing the data to verify and process transactions. Blockchain
depends on the node for efficiency, scalability, building transaction
consensus, support, and security. With the proof of stake consensus mechanism,
your Blockchain network should have at least four running nodes to reach a
quorum (Consensus quota) for each block of transactions.
Here is a list of questions to answer when you are
you designing your Blockchain nodes:
a. What
permissions and access will a node have to have? Private, public, or hybrid?
b. Where
each node will be hosted? On the cloud, on premise or both?
c. What
is the size of the node required in terms of hardware details, such as
processors, memory, disk size, etc.?
d. What
is the nodes base operating system (most common choices would be Ubuntu or
Windows)?
5.
Establish
Blockchain architecture
Like with anything you build, a single family home, a
high-rise or your business Blockchain, you need an architecture plan. Some of
the questions will be answered by the Blockchain platform of your choice. The
Omnibasis platform did a lot of work to answer some of those questions for you
and is hiding all that plumbing under the hood with simple step by step
configurations.
Make sure your Blockchain blueprint architecture answers the following topics:
a. Permissions architecture - define how
and by whom data can be accessed, how transactions are validated and completed
and how new blocks are managed.
b. Address format - what Blockchain
address formats will be used and how do you form the address and manage it.
c. Key format - what Blockchain key format
will be used and how will you be generating the signatures for the
transactions.
d. Asset issuance - what are the rules for
creating and listing assets.
e. Asset transfer - what are the rules for
asset management and transfers.
f.
Key
management - what is a good system to store and protect the private keys
granting the Blockchain access.
g. Multi-signatures - define the number
and level of keys/passwords your Blockchain will require to validate a
transaction.
h. Review parameters and estimate the
maximum block size, define the rewards if any for block storage and mining and
possible transaction limits.
i.
Native
assets - what are the rules to govern a native currency issued in the
Blockchain and how is it used.
j.
Block
signatures - define how the Blockchain nodes are creating and validating
the blocks and what will be required to sign them.
k.
Hand-shaking
- what are the rules of how the nodes will identify themselves to each other
when connecting.
6.
Integrated
APIs
Make sure to verify that the Blockchain platform of
your choice provides pre-built APIs for integration. If it does not, no
worries, Omnibasis Blockchain integration provides easy to use user interface
screens to manage and build your application on the Blockchain.
7.
Design
User Interface
The Communication between your Blockchain and its
participants require a well thought user and administrator interface. At
Omnibasis, we built a user interface to take you through every steps of the
Blockchain design and development without writing a single line of code.
Also consider how your Blockchain will communicate
with the web, mail and data storage servers, external databases. What front end
and programming languages you will it use (e.g. HTML5, CSS, PHP, C#, Java,
Javascript, Python, and Ruby).
Launch your NFT on Omnibasis without single
line of code
In just a few steps you can build and launch your own NFT on
Omnibasis.
1.
Pick a great name.
2.
Describe the value of the asset in NFT.
3.
Choose your Blockchain platform and
configuration.
4.
Design your NFT and describe the asset.
5.
Use an intuitive and comprehensive user
interface.
6.
Market your NFT.
Let’s walk through each step one at a time.
1.
Pick a great name.
Get people excited about your NFT
with a great name. The name of the NFT needs to incite curiosity and interest
to urge buyer why they should purchase your NFT.
2.
Describe
the value of the asset in NFT.
Just like a real asset, you need to offer them something valuable in return to make sure the NFT matches the value of the asset that backs it. For example, if you're offering NFT as part of your art piece ownership, assign a monetary value to your NFT so customers can visualize what they buy. Omnibasis makes it easy for you and your customer to convert NFT to any currency of your choice.
3.
Choose your Blockchain platform and
configuration.
Omnibasis platform is running on
the enterprise Blockchain powered by BigchainDB. In addition, Omnibasis
supports a variety of Blockchain networks that you can run yourself and just
connect to. We also offer “Blockchain-network-as-a-service” – where we will run
the Blockchain network for you. Choose your use case: do you want to run your
own Blockchain network or put your resources into building your NFT business
and leave the plumbing to the experts.
Regardless of your choice,
Omnibasis is here to support your business case with easy-to-use user interface
screens to help you configure and run your NFT.
4.
Design your NFT and describe the asset.
Design your NFT. With Omnibasis, it is one simple Settings screen. Choose the level of security, how the assets are encrypted and what is required to create and exchange the assets. With a few clicks your NFT will be created. Visit our step-by-step guide to learn how to.
5.
Use
an intuitive and comprehensive user interface.
We already did all the hard work
for you. Do you need a wallet, no worries, done! Do you need an email server
integration, done! Do you need your customer or user registration, done! Do you
need a cool looking website, done! Do you need SSL, you got one for FREE on us,
our compliments to maintain your site security. All you need to do is upload
your business logo, and decide on the user workflow through your application.
6.
Market your NFT.
Now that you have launched your NFT you can provide
more multiple opportunities for your customers and business partners to engage
and extend the value your asset. We give you all the tools you need to start
marketing your NFT.
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