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In this YouTube tutorial, the speaker demonstrates how to create a demo markdown project. They start by creating a markdown file and then proceed to upload a picture into the folder by dragging and dropping an image file. The speaker explains the basic markdown syntax for adding the image, which involves starting with an exclamation point, followed by the alt text in brackets, and the file path in parentheses. They use an example of adding the logo image and show how it appears in the markdown file. The tutorial emphasizes using regular markdown syntax to successfully add images to the markdown file.