NFTs are extremely popular these days, but despite being so popular, there is huge confusion about what is an NFT among most people. Many people have so many perplexing thoughts in their minds about what is NFT art, where to buy NFT, what is NFT stock, and so on. Today, in this blog, we will discuss everything about NFT so that you have a clear understanding of this revolutionary milestone in the finance world.
What is NFT?
NFT is the abbreviation of a non-fungible token, a non-interchangeable unit of data stored on a blockchain, which is nothing but a digital ledger. The different NFT data units are associated with various digital files like photos, videos, and audio. In the case of NFT, each token is separately identifiable, which is why NFTs are different from other types of other blockchain cryptocurrencies like Bitcoin.
Before the advent of NFTs, digital ownership depended on the central servers of companies that were subjected to manipulation. And digital ownership is something that is becoming very popular with each passing day. Interestingly, NFTs are taking this concept to an entirely new level.
The non-fungible tokens or NFTs are completely different from other cryptocurrency investments. NFTs don’t have value from their utility like other forms of cryptocurrencies. Rather, NFTs are considered precious because of the media they are attached to. The most well-known forms of media on NFTs in today’s modern world are nothing but art and music. But what is more interesting about NFTs is that they have the power to tokenize any real asset.
What are the Pros and Cons of NFTs?
NFTs are truly one of the most beneficial elements for artists who have the power to produce digital media. Before NFTs came into the picture, it was tough for anyone to verify how authentic the digital media is, as anyone could copy and paste the file. However, not all the features of NFTs are valuable. There are different cons of it as well. So, before we dive in more, let’s first check out the pros and cons of NFTs.
Non-fungible tokens or NFTs make the process of selling digital media an easy one
These tokens leverage the efficacy of blockchain to verify the authentic artwork and digital ownership. So, they are highly reliable
NFTs can transform collectibles like trading cards to be more interactive and engaging.
The upsurge of NFTs during this modern era has made the prices of many collectibles go up a lot. Thus, they will become overvalued in the long term
If you don’t take the required safety measures while storing the NFTs, there might be some serious risks of them getting hacked like any other cryptocurrency.
Which are the Top NFTs in the Market Today?
There are different types of NFTs available in the market today, but the most well-known categories include art, music, and collectibles. There are some big names associated with the creation of NFTs; they are Grimes, Kings of Leon, 2 Chainz, and Steve Aoki.
Some of the biggest artists who make the best use of digital media as the medium of showcasing their art, like Joon Noorlander, Beeple, Mike Greg, et al., have welcomed NFTs with open arms. Moreover, a public company like Score Media and Gaming Inc. has started talking about NFTs in their show Mint Condition, which gets broadcasted once weekly.
One of the most popular and the biggest NFT was a crypto collectible called Cryptokitties. These digital cats first came into existence in 2017. They are the same collectible as Beanie Babies. There are many other unique NFT collectibles like NBA Top Shots, Cryptochunks, and in-game elements for video games.
How to Create NFTs?
Creating NFTs is an effortless process. You need to make an account with a marketplace like OpenSea. This platform allows users to create NFTs easily. For that, you shouldn’t have to learn about the making process of an ERC-721(NFT) token or have any experience in handling blockchain technology.
Although anyone can create an NFT, everybody can’t sell it. Many random people have created tons of different types of NFTs, but unfortunately, they never get sold for too low values. To ensure an NFT has some value, the media needs to be important. For an NFT to gain value, the artist should have some reputation, or the media must have quite a remarkable extent of historical significance.
How to Buy NFT?
Where to buy and what is NFT crypto has been a very perplexing thought in everyone’s minds for quite a long time. Buying NFTs is a comprehensive process that needs to be handled very precisely. There are some crucial steps of buying NFTs most appropriately. They are:
Most of the NFTs are Ethereum based tokens. So, most marketplaces compatible with purchasing NFTs accept only Eth tokens as a payment. If you have already created an account with any of the standard cryptocurrency exchanges, you can buy Ethereum on it and direct your crypto to the associated MetaMask wallet.
However, if you don’t already have an existing account in any crypto exchange platforms, you can start with Coinbase and eToro. They are a couple of the most amazing options for beginners.
Get Your MetaMask Wallet Connected to OpenSea or Any Other NFT Marketplace
You have different marketplaces to buy and sell NFTs. It depends on the platform you choose, buying a variety of art and collectibles as possible. All these marketplaces include some prominent secondary marketplaces, which consist of various NFTs. But the working platform for each platform is quite different.
Now, do you know what MetaMask is?
It is an Etherum wallet available in chrome extension and mobile apps. If you want to sign in to OpenSea or any other NFT platform, there will be an Etherum wallet for you. You need to link your MetaMask to a ledger hardware wallet if you want maximum security. This will help you nullify the hacking risks.
All you need to do here is download MeyaMask and set up a wallet. You should now start sending over the ETH that you have just purchased from Cubase. Simple!
Next, let us understand what a ledger is?
Ledger is a hardware wallet that acts as perfect storage for different NFT altcoins. If your investment amount is quite huge in NFTs, it is advisable to safeguard your investment within a hardware wallet. If you think that the modern software wallets of the ledger offer the same extent of security, then you’re mistaken. Unfortunately, hacks are very common in the case of software wallets in the NEFT space.
After MetaMask wallet and ledger, another crucial term that comes into our minds is Opensea, which we have already mentioned above.
OpenSea is an ideal marketplace for NFTs that operates with Ethereum as the base. When it comes to OpenSea, users can communicate with the network to exchange NFT tokens of cryptocurrency. The OpenSea platform is a host of different digital collectibles, from video games to digital artworks and what not!
If you want to know how you should use this platform, the very first thing that you will need is a web3 cryptocurrency wallet like MetaMask. The address of your Ethereum wallet will act as your username and password. This will help you interact with platforms like OpenSea. After connecting with the wallet, you can now start browsing the market and placing bids.
Except for OpenSea, there are some other effective NFT marketplaces, and they are super rare, Nifty Gateway, NBA Top Shot, and so on.
Purchase the NFT of Your Choice
Once you are done funding your account, the next step (buying process) is super easy! The prominent marketplaces are usually in an auction format. All you need to do is submit a bit for your desired NFT. The majority of marketplaces operate like an exchange. They use the highest bid and lowest ask for NFTs, which have a variety of prints.
One of the biggest advantages of buying an NFT from any of the above major marketplaces is its potential resale value after the product is sold. The highly demanding NFTs are expected to sell for 5 to 10 times more than their initial price after release.
So, isn’t it easy to purchase NFTs? If you have not done that before, this article must have given you a 360-degree view of that.
What is the Future of NFTs?
Currently, NFTs are mainly used to sell digital arts and collectibles. This seems to be the revolutionary way of exchanging collectible assets from trading cards to artworks.
In the future, the face of NFTs will be changing remarkably. They will be used to tokenize all kinds of real-world assets. With this, the ownership of assets will be more transparent and incorruptible than ever before. The NFTs will be one of the most precious elements of the real estate world, intellectual property rights, and business owners for sure.
Although the future of NFTs is not so clear now, it is evident that this technology has an immense level of potential to transform the entire face of the internet. Well, we are still very early….and a lot of developments are yet to be seen!
For more finance-related concepts you can have a look at the FinanceShed, and stay tuned for more updates.