NFTs-How to Easily Understand and Explain Them


When I first learned of Crypto, it was because of SteemIt. I couldn't sleep for 3 days as I explored the world of everything blockchain, crypto, trustless transactions, etc. I didn't understand the lingo, but I was fascinated! I had heard of Bitcoin before, around 2009 or so. When I heard about it, it was through a news story where they said that people had made digital money out of thin air. It was mocked and ridiculed by all around me with absolutely zero understanding of how or why they were doing it. My life could have changed dramatically if I had paid more attention to what everyone was mocking. Afterall, it was "too good to be true" therefore it mustn't be true...right?!

Fast forward to about a couple years ago and NFTs were being talked about. Extremely pixelated images started popping up and they were selling for hundreds of dollars until I started hearing of them selling for millions...that caught my attention, but I heard the same stuff...

These are so stupid! You can just take a screenshot and you own it for free.

That's what I heard and that's what I thought. My thoughts have changed since then...not about the pixelated pictures. That's just stupid money, in my opinion, that people are paying on these, what I consider to be, stupid pictures. It's not good art, imo. It's terrible! Maybe you disagree with me, and that's ok. Maybe you love it for nostalgia-sake it it just gets your Source gourd.

Even though I think many of the pictures are ugly/pointless, that does not mean the concept of NFTs is pointless...

So what are NFTs? What's the point?


Non-Fungible Token - A term used to make nerds happy and the general public afraid to learn more.

What is an NFT?

We will first have to explain blockchain, otherwise, the rest will be lost on you if you're new to all things crypto.


When I was growing up, my parents wrote checks. Every time they wrote a check, they would keep track of who it was for and how much it was written for. They would also write down when they would put money into their account at the bank. This was done in their checkbook. It was written on what is called a ledger. This ledger kept track of all their transactions because online wasn't a thing. If you wrote a bad check, it would bounce, causing a large charge against the account from the bank.

In the checkbook, if you filled a full page, you would take the last balance at the bottom of the page and move it to the top of the next page to continue the accounting.

In crypto, the page you write your transactions down on is called a block. One page=one block. Every time you turn the page, you move the last balance to the top of the next page and so does every block move the last balance to the new block (for simplicity).

Just as any book has a spine that holds the page together, so to does a checkbook. The spine that holds it together could be considered similar to a chain. The connection of each page to the spine chains the pages together. In crypto, each block is chained together by locking the balance at the bottom of one block to the next. This is (Source)how it becomes known as a blockchain...or a chain of blocks. Every time a new block is needed, it is chained together with the blocks before it.

Now that you know what a blockchain is, let's speak of proving authenticity.


If you've ever bought a painting at an auction or similar, not at your local TJ Maxx or Marshall' know...a 'box' store with home decorations, you likely got something called a "Certificate of Authenticity." The purpose of the Certificate is to prove that you have a legitimate piece of art from the actual artist themself. People use these for autographed baseballs, as an example, to prove that the signature is authentic-that it is the true signature of the person claimed to have signed it. The difference between a baseball with Babe Ruth's signature with a Certificate of Authenticity and a baseballSourcewith his signature without it is a several 0's to the left of the decimal. A painting could be worth millions if authenticated and $20 without proof of authenticity. If I took a picture and copied it, it would hold minimal value.

It is really easy to copy something digitally. Copy/paste is simple. Print Screen is a common tool on my keyboard. There had to be a way an artist could authenticate their digital artwork in such a way to tell the world that one digital image was authentic and another was not. This is done through NFTs. NFTs tie a digital property (most often in the form of picture or video, but the first Tweet was sold as a digital property) to a blockchain. This locks in its authenticity. Essentially, a the difference between the value of a digital image could be millions if there is an NFT (think Certificate of Authenticity) versus not one. In order for an NFT to be owned, there must be a transfer of ownership and it has to be noted on the checkbook...ahem...blockchain.

Link to the Art World

Have you ever seen a painting that had a number on the bottom corner of it.

It would look something like this. What this indicates is that the painting/picture you see is the 1,374th of 2,000 created. The closer you get to number 1 and the smaller the total number of prints made, typically, the higher the value of the piece. The same can be said in the digital world. Uniqueness and number of copies can also generate value in the digital realm.


Utility speaks of something's "usefulness." Something with high utility means it is very useful. Low utility means it is not very useful.
NFTs, up until the last few years, have had no utility other than as a storage of wealth like physical artwork and buildings are used for wealthy people to store their wealth and show it off. You could authenticate a digital product. This was useful, but more or less a low utility for all intents and purposes.

The gaming industry changed NFT utility. Now, not only could you authenticate something on the blockchain as a legitimate digital item, you can now link it to a purpose in a game. On the Hive blockchain, Splinterlands, Rising Star, and more recently, Psyber-X have introduced NFTs that have utility. You can use the NFTs that are held by your account to perform certain tasks in-game. When you are finished with them or are otherwise no longer in need of the NFT, you have the capability of selling the digital asset to someone else, authenticating both the transaction and the authenticity of digital asset through a digital signature attached to the blockchain....You essentially write down in your checkbook that you withdrew your game token and deposited money or something else of value in turn. NFTs within games also give the owner the ability to hold onto the NFTs authenticity, but allow someone else to rent the utility of the NFT.

Gotta love blockchain technology!

I hope you have learned something useful to share with your friends and family, that my explanation will allow you to introduce these tough terms in a way that is more understandable. It has changed the minds of dozens of my colleagues from thinking NFTs are crazy/stupid to:

"Wow...I think I might look into buying a few of those."

Follow me here on's worth it 😉

Hive Games with NFTs:

Psyber-X NFTs (Marketplace coming May 13)
Rising Star NFTs
Splinterlands NFTs
For more: Dapp Radar-Top Hive Games


So much to learn from this great masterpiece 👌

I love the Certificate of Authenticity analysis and the example you gave with the autographed baseball in explaining the idea of originality and authenticity of an NFT-item.

We need great piece like this to help people understand and better appreciate NFTs, Blockchain and Crypto world.

Great piece my Master in pen ✍


I did see Nfts as hype when it first launched and sold for millions but I had a change of mind when the gaming world showed us how much potential it has in the crypto world.

Everyone on Hive is well aware of Spl's huge growth last year and whole lots of other NFT games here on hive that have successfully gained ground in the nft world.

I love the gaming part of it and that's something that will shape the future of P2E and Nft entirely.

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