What You Need To Know About Non-Fungible Tokens (NFTs)
What Is an NFT?
NFTs are digital assets that represent real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency & they are created in the same underlying way as crypto currencies are. Although they have been around since 2014, NFTs are gaining popularity due to NFTs having made it easy to buy & sell digital artwork. A staggering $174 million has been spent on NFTs since November 2017.
How Is an NFT Different from Cryptocurrency?
NFT stands for non-fungible token. It’s generally built using the same kind of programming as cryptocurrency, like Bitcoin or Ethereum, but that’s where the similarity ends.
Physical money and cryptocurrencies are “fungible,” meaning that they can be traded or exchanged for one another. They are also equal in value — one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin. Crypto’s fungibility makes it a trusted means of conducting transactions on the blockchain.
How Are NFTs Transforming the Digital Art World?
NFTs exist on a blockchain, which is a distributed public ledger that records transactions. Blockchains are well known being the underlying infrastructure that made the rise of cryptocurrencies possible.
Specifically, NFTs are held on the Ethereum blockchain or any other blockchain ecosystem
An NFT is created, or “minted” from digital objects that represent both tangible and intangible items, including:
•Visual Art/ Movies
• Videos and sports highlights
• Video game avatars & skins
• Apparel/ Designer sneakers
• Trading cards
• Virtual land
• Real world objects & Assets
• Tweets/ Posts
What Are NFTs Used For?
NFTs are a novel concept to confirm fool proof asset ownership. NFTs make trading easy, and give asset creators fairer rights than existed hitherto. And eases trading across geographies and does more, The value proposition of NFTs does not stop here, though.
NFTs give impetus to a new type of creative dynamic that may take human-machine interactions to a different level, be it for Gaming, Finance or Business in general. If considered Gaming for example. NFTs have potential to provide a solid platform to make Gaming decentralised. Be it by encouraging creativity to create new kinds of gaming characters, scenes. Or by making it easier to build leveraged revenue models Example of it would be incentivising digital ads in decentralised spaces/ meta verses or by claiming complete ownership to an in-game collectibles and trade them internally or on any other secondary marketplaces of their own choice, the possibilities of and with NFTs, seem limited only by human imagination!
Blockchain technology and NFTs afford artists and content creators a unique opportunity to monetize their wares. For example, artists no longer have to rely on galleries or auction houses to sell their art. Instead, the artist can sell it directly to the consumer as an NFT, which also lets them keep more of the profit. In addition, artists can program in royalties so they’ll receive a percentage of sales whenever their art is sold to a new owner. This is an attractive feature as artists generally do not receive future proceeds after their art is first sold. Art isn’t the only way to make money with NFTs. Brands like Charmin and Taco Bell have auctioned off-themed NFT art to raise funds for charity. Charmin dubbed its offering “NFTP” (non-fungible toilet paper), and Taco Bell’s NFT art sold out in minutes, with the highest bids coming in at 1.5 wrapped ether (WETH) — equal to $3,723.83 at time of writing. Pizza Hut Canada auctioned their first ever digital pizza slice 1 Byte Favourites,” aka digital images of pizza, as non-fungible tokens. 01Pizza Hut believes no world should exist without pizza, especially their pan pizza. That’s why they wanted to make sure it was enshrined in the digital universe,” they said in a release. Each week, the company will release a new image of a pizza slice, each of a different recipe, for purchase on Rarible. The first-ever “slice” was listed for $0.0001 ETH ($8,824)
How to Buy NFTs ?
If you’re keen to start your own NFT collection, you’ll need to acquire some key items:
First, you’ll need to get a digital wallet that allows you to store NFTs and cryptocurrencies. You’ll likely need to purchase some cryptocurrency, like Ether, depending on what currencies your NFT provider accepts. You can buy crypto using a credit card on platforms like Coinbase, Kraken, eToro and even PayPal and Robinhood now. You’ll then be able to move it from the exchange to your wallet of choice.
You’ll want to keep fees in mind as you research options. Most exchanges charge at least a percentage of your transaction when you buy crypto
If you are keen to start your own NFT collection
you’ll need to acquire some key items:
First, One would require to setup their digital wallet that allows them to store NFTs and cryptocurrencies. You’ll likely need to purchase some cryptocurrency, like Ether, depending on what currencies your NFT marketplace accepts. You can buy crypto using a credit card or a debit card on platforms like Coinbase, Kraken, eToro and even PayPal and Robinhood now. You will then be able to move the crypto from the corresponding Exchange to your wallet of choice. You will want to keep fees in mind as you research options. Most Exchanges charge at least a percentage of your transaction when you buy crypto
Popular NFT Marketplaces
- Nba Top shot
Why Should one Buy NFTs ?
Just because you can buy NFTs, does that mean you should? It depends, Yu says.
“NFTs are risky because their future is uncertain, and we don’t yet have a lot of history to judge their performance,” she notes. “Since NFTs are so new, it may be worth investing small amounts to try it out for now.”
In other words, investing in NFTs is a largely personal decision. If you have money to spare, it may be worth considering, especially if a piece holds meaning for you That said, approach NFTs just like you would any investment: Do your research, understand the risks — including that you might lose all of your investing dollars — and if you decide to take the plunge, proceed with a healthy dose of caution.