THE COMPLETE GUİDE TO NFT: HOW IT WORKS, WHERE TO USE IT, AND POPULAR EXAMPLES

An NFT is a digital certificate where the unique ownership record of a digital asset is kept on a blockchain. Below you will honestly find what NFT stands for, the "non-fungible" concept, how it works, how it is made and bought, whether it is legal in Turkey, its prices, and the deflation of the 2021 bubble.

What Is an NFT, What Does It Stand For? (What Is It For?)

NFT stands for "Non-Fungible Token". Simply put: it is a digital certificate where the unique ownership and authenticity record of a digital asset (an image, video, music, game item or collectible) is kept on a blockchain; you can also see the definition on Wikipedia.

What is it for? It aims to prove "who owns the original" of something in the digital world. Normally anyone can copy a digital image; an NFT, on the other hand, says that the version of that image with a known owner is recorded, just as a painting may have thousands of copies but only one original. NFTs are most used in digital art, collectibles, in-game items and some ticket or identity applications. Important note: owning an NFT does not stop others from seeing or copying that image; what you own is the ownership record on the blockchain.

What Does 'Non-Fungible' Mean?

A "fungible" thing means one that can be swapped one-to-one with an identical one. For example money is fungible: if you have 100 liras and swap it for another 100 liras, you lose nothing; every 100 liras is identical and equivalent. Bitcoin is also fungible, as one Bitcoin is the same as another Bitcoin.

"Non-fungible" means that each unit is unique and cannot be swapped one-to-one. A painter's signed original painting is non-fungible; you cannot swap it for another painting as an "equivalent", because each one is unique. NFTs, with the same logic, are unique digital assets different from one another; you cannot swap one NFT one-to-one with another NFT. Uniqueness is the basis for NFTs being used for collecting and ownership claims.

How Does an NFT Work? (Blockchain and Digital Ownership)

NFTs are based on blockchain technology; they are mostly created on networks that support smart contracts, such as Ethereum. ethereum.org explains the technical side in detail. The working logic is this: a digital asset is "minted" (turned into an NFT) and the transaction is recorded on the blockchain.

Because a blockchain is a distributed, unchangeable ledger that everyone can see, who created that NFT, who owns it and its ownership history are kept transparently and securely against forgery. When you buy and sell an NFT, the ownership record passes to the new owner. A technical point: usually the digital file itself is stored outside the blockchain; what is kept on the blockchain is the ownership record and information pointing to the file. The system makes the idea of digital "original ownership" possible, but the monetary value of an NFT depends entirely on demand and is not guaranteed.

How Is an NFT Made and Bought?

The basic steps to make (mint) and buy an NFT are as follows:

• Prepare the work: create a digital work (image, video, music).
• Set up a wallet: open a crypto wallet and put in some crypto for the relevant network in exchange for transaction fees.
• Connect to a marketplace: connect your wallet to a well-known NFT marketplace (for example OpenSea).
• Mint or buy: upload your work and turn it into an NFT, or buy an NFT you like at a fixed price or by auction; ownership passes to your wallet.

The security warnings matter: never share your wallet's recovery phrase (seed phrase) with anyone; use only official and well-known marketplaces; fake NFT projects, copy works and fraud are very common. Remember there are transaction fees (gas), and there is no guarantee that an NFT will be sellable or valuable in the future.

Is NFT Legal in Turkey?

Buying, selling or creating NFTs is not an openly banned activity in Turkey; people can trade on NFT markets. Still, a few points need attention. Crypto assets and the NFTs based on them are a developing regulatory area in Turkey; in 2024 legal regulation was made for crypto asset service providers, and this area was brought under the scope of SPK and MASAK.

An important restriction is this: using cryptocurrencies as a means of payment is banned by regulation in Turkey; that is, you cannot make "payments" for goods and services with crypto or NFTs (this is a different matter from buying and selling). The tax side of gains from NFTs is also on the agenda; I addressed that side in my crypto taxation article. The rules are getting clearer over time and can change; follow official sources for binding information and get legal advice if needed. What I write is not legal advice.

NFT Prices, the Most Expensive NFTs and Making Money

NFTs have no single price; prices range from a few dollars to millions of dollars and depend entirely on demand. In history some famous NFTs (certain digital art works and collections) sold for tens of millions of dollars and drew huge interest. That said, these extreme examples represent the exception, not the rule.

The reality is this: the vast majority of NFTs are very low in value or find no buyer at all. The "making money with NFTs" talk was very popular in 2021, but many NFTs bought back then are today far below their purchase price or practically unsellable. NFTs are extremely speculative assets; an NFT's value can drop to zero tomorrow, because its value depends only on how much someone else is willing to pay. Seeing an NFT as a "sure money-maker" is wrong. If you are interested, approach with an amount you can afford to lose and be careful against fraud; I explained a similar risk in my metaverse article too. What I write is not investment advice.

Did the NFT Bubble Burst? The Current Picture

An honest assessment: NFTs saw enormous excitement in 2021; everyone was talking, prices were soaring, celebrities and brands were rushing in. Then the bubble largely burst. From 2022 on, trading volumes and prices dropped sharply; the value of many once-high-priced collections collapsed and a great number of NFTs became practically unsellable.

So did the technology die? Not exactly. The idea underlying NFTs (digital ownership and a uniqueness record) is evolving toward calmer, real uses in games, digital identity, ticketing and some collecting areas. But today's picture is very different from the 2021 speculative frenzy and much quieter. The period of seeing NFTs as a "get rich quick tool" is over; the technology lives on in certain niche areas, but exaggerated profit promises should be approached with caution. As a digital marketer, I can comfortably say this: something being marketed as "the future" does not mean it will surely make you money.