Learn the basics about NFTs and how they work on Cardano.
A non-fungible token (NFT) is a unique and non-interchangeable unit of data stored on a digital ledger. NFTs can be used to represent easily-reproducible items such as photos, videos, audio, and other types of digital files as unique items, and use blockchain technology to establish a verified and public proof of ownership.
The most famous blockchain is that of Bitcoin, which had the critical innovation of allowing a Trustless group to verify transactions without the need of a central authority. Blockchains are a specialised form of distributed database, commonly used to store information such as a transaction ledger. Most Cryto-related blockchains are designed to be highly secure, decentralised and immutable, which essentially means that the information in the blockchain is distributed across many actors who must all reach a consensus for a new block to be formed. Once the information is added to the blockchain, it can never be edited or deleted.
Cardano is a public blockchain platform. It is open-source and decentralised, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, Ada. Cardano was founded in 2015 by Ethereum co-founder Charles Hoskinson.
Cardano is also the first to be founded on peer-reviewed research and developed through evidence-based methods. It combines pioneering technologies to provide unparalleled security and sustainability to decentralised applications, systems, and societies.
We will explain how NFTs are native assets on the Cardano blockchain and can be stored, sent, and received in the same way as ADA or any other token.
Metadata is data that provides information about other data; in the case of an NFT, it describes that NFT's essential properties, including its name, description, and anything else its creator feels is important. In many cases, an NFT's metadata also contains links to the images and other "primary" digital assets that give an NFT its value.
The process of initially storing the NFT onto the blockchain is known as Minting. Minting an NFT requires a fully operational Cardano Node (a server connected to the blockchain) and various other technical requirements. NMKR Studio allows anyone to use our specially designed infrastructure, to Mint NFTs using an intuitive user interface.
One of the many unique differences between Cardano and all other blockchains is the ability to create, interact and destroy custom tokens in a native way. This means besides sending and receiving the official currency ADA, you can also interact with custom assets (NFTs) without the need for smart contracts.
In addition, all information regarding the NFT is stored in the Native Token Minting Transaction Metadata. With this, Cardano wallets like Nami, Daedalus and Yoroi can pull the metadata from the native assets to display the NFT in the intended form.
Once the Policy ID is locked, the NFTs minted cannot be edited.
NFTs are native assets on the Cardano blockchain, and therefore can be stored, sent, and received in the same way as ADA. The wallets that support NFT storage on Cardano are CC Wallet, Daedalus, Nami, and Yoroi.
There are two methods to viewing your NFTs in your wallet.
Firstly, you can use Cardano wallets such as Nami, GeroWallet or CardWallet that allow you to see NFTs directly in your wallet. Also worth noting is that since the launch of smart contracts, the Yoroi wallet by Emurgo is soon to be updated to include a new NFT Viewing Gallery. You can find out all about that here: https://summit.cardano.org/sessions/what-s-in-store-for-yoroi-wallet-users
Secondly, you can utilise online tools like Pool.pm that display NFTs in your wallet. All you need to do is insert your the ID of the NFT in your wallet into the search bar and the your NFT will be displayed will all the relevant metadata.
The cost to mint an NFT on NMKR Studio is dependant upon the Tier your NFT Project is applicable to. The prices per Tier can be found here: https://www.nmkr.io/studio#pricing Here is an example of how fees are calculated in price Tier D:
2 ADA is the fee for the NMKR Studio Platform 2 ADA are sent with the minted NFT to the buyers' wallet (sending a minimum of 2 ADA with each transaction is a requirement from Cardano). ~0.2 ADA is the transaction fee of the Cardano Blockchain. So in total, it is calculable that you should expect a fee of 4.20 ADA if you are minting in Tier D.
You can mint any kind of NFT that you would like because the metadata structure contains a lot of flexibility. The typical files types that are supported are images, videos, and audio.
IPFS stands for InterPlanetary File System and is a peer-to-peer protocol designed for storing and sharing data in a distributed file system. Currently, IPFS is the main protocol used to store digital the digital media that many NFTs represent. In short, the NFT is on the blockchain and it probably points to media files on IPFS.
You can send your NFT from your wallet directly to another person's wallet or another wallet that you own.
All you need to do is have an address to send it to that starts with the prefix "addr1.." which means that the receiver wallet is a Shelley era wallet and NOT on an exchange.
The next step is to ensure that you have enough ADA to cover the cost of sending the NFT. Simply enter the correct address and amount displayed in the wallet, verify with your spend password, and that's it!
Currently, crypto exchanges do not support Cardano Native Tokens. Maybe they will in the future, but at the moment they do not. Using an exchange wallet will mean you will lose your NFTs, as you will likely never be able to access them.
To buy and store NFTs, you need to use a wallets like Yoroi, Daedalus, Nami and CCWallet that support Cardano Native Tokens. Creating your own wallet is a very easy process and is a critical part of taking ownership of your crypto-assets.