Understanding the NFTs-Future of the digital art
Non-Fungible Tokens are heating up and getting super popular recently. What are NFTs? In our modern world, everything can be digitalized and then sold. Basically, this is what NFT means.
In this article, we will provide complete info about everything you might ask regarding the NFTs: What they are, how useful they are, how, where you can create and sell, how you can buy, etc.
Well, NFT is a non-fungible, irreplaceable token, a unique identifier recorded on the blockchain, telling the world who owns assets.
For digital artists, they are an inspiring innovation, and their works can easily be copyrighted, which obscures ownership.
Simply put, NFT means a virtual asset representing some real-world objects. A wide range of NFTs can include art, music, in-game items, videos, etc. They are bought and sold online, often using cryptocurrencies. They are usually encoded using the same underlying software as many cryptocurrencies.
Although they have existed since 2014, they are now becoming more and more notorious. NFTs are becoming super popular methods for buying and selling digital art. Since November 2017, a staggering $174 million has been spent on Non-Fungible Tokens.
NFT is usually one of a kind, or at least a very limited kind, and has a unique identification code.
Non-Fungible Tokens creates digital scarcity
NFT is in stark contrast to most digital creations, which are almost always in unlimited supply. Assuming there is demand, cutting off supply should increase the value of a given asset.
But, at least in the early days, many NFTs were digital creations that already existed elsewhere in some form, such as iconic video clips from NBA games or securitized versions of digital art that have been circulated on Instagram.
For example, artist Mike Winklemann the famous digital, also known as “Beeple,” made a composition of 5,000 daily paintings.
He created perhaps the most renowned NFT at the moment, “Everyday: the first 5000 days”. Today, the artwork is in Christie’s auction house and is set at a record-breaking $69.3 million.
What advantages can NFTs bring?
Anyone can view a single image online for free or even an entire image collage. So why are people willing to spend millions of dollars to buy something they can easily take a screenshot of or download?
The reason is simple: Because NFT allows the buyer to own the original item. Not only that, but it also includes built-in authentication, which can be used as proof of ownership.
Collectors almost value these “digital bragging rights” more than the objects themselves.
In the first half of 2021, the size of the NFT market reached 2.5 billion U.S. dollars, while in the first half of 2020, it was only 13.7 million U.S. dollars.
Prices aside, the number of NFT artists and collectors seems to be growing.
Where can you buy Non-Fungible Tokens?
Many different NFT markets can meet different needs.
Some list various tokens, from art and music to trading cards and domain names, while others only sell collectibles from niche brands, such as the North American Basketball League, NBA Top Shot, or the Pokemon-style online video game Axie Infinity.
Today, the most famous NFT marketplaces are SuperRare, OpenSea.io, Foundation.app, Mintable, and Raible.
You should note that each market has specific crypto wallet requirements. Currently, no wallet can be used on all websites.
The most commonly accepted crypto wallet is MetaMask, while others include Formatic, Coinbase Wallet, Torus, and Portis.
How can you buy NFTs?
If you are keen to start your NFT collection, you need to obtain some essential items:
First, as mentioned, you need a digital wallet that allows you to store NFTs and cryptocurrencies. You may need to buy some cryptocurrencies, such as Ether, depending on the currency accepted by your NFT provider.
You can now use credit cards to buy cryptocurrencies on Coinbase, Kraken, eToro, and even PayPal and Robinhood. You can then transfer it from the exchange to the wallet of your choice.
When researching options, you need to keep costs in mind. When you buy cryptocurrency, most exchanges charge at least a certain percentage of transaction fees.
How can you create and sell NFTs?
Creating your own NFT artwork is a pretty simple procedure. It does not require extensive knowledge of the crypto industry. NFT artwork can also be used to develop collectibles, such as digital card decks.
Before you start, you need to decide the blockchain on which you want to issue an NFT. Ethereum is currently the leading blockchain service published by NFT. However, a series of other blockchains are becoming more and more popular, including Binance Smart Chain, Dapper Labs’ Flow, Tron, EOS, Polkadot, Tezos, Cosmos WAX.
Each blockchain has its own independent NFT token standard, compatible wallet service, and market. For example, if you create NFTs on Binance Smart Chain, you will only sell them on platforms that support Binance Smart Chain assets. This means that you will not be able to sell them on platforms like VIV3 or OpenSea.
To sell your NFTs on the market, you need to find them in your collection, click on them and find the “Sell” button. Clicking this button will take you to the pricing page, where you can define the terms of sale, including whether to conduct an auction or sell at a fixed price.
Today, Ether and ERC-20 tokens are the most widely used cryptos for selling NFTs. However, keep in mind that some platforms only support the native tokens that build their blockchains. For example, VIV3 is a Flow blockchain market that only accepts FLOW tokens.
Bottom Line: Is it worth buying NFTs tho?
Investing in NFTs is primarily a personal decision. If you have spare money, it may be worth considering, especially if a work is meaningful to you.
But remember, the value of NFT depends entirely on the price others are willing to pay for it. Therefore, demand will drive prices rather than fundamentals, technical or economic indicators. The latter affects stock prices, at least usually form the basis of investor demand.
All of this means that the price of NFT resale may be lower than the price you paid. Or, if no one wants it, you may not be able to resell it at all.
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