What Are NFTs?• 6 min read
NFTs took the internet by storm in 2021, surging in popularity seemingly overnight. People of all financial standings are purchasing digital artwork, among other things, for millions of dollars.
What are NFTs (non-fungible tokens), and why are they so popular?
This article dives into the popular world of NFTs, why they are worth so much, and who can make them. If you’re wondering what the buzz around NFTs is, continue reading to learn more.
What are NFTs?
NFT stands for non-fungible token. While some folks may understand the language, others may not. So, let’s examine the differences between the concept of fungible and non-fungible. A fungible item is something replaceable with the same object of identical value.
Think of it like bitcoin - you can trade one for another bitcoin, which leaves you with exactly the same thing.
However, non-fungible items are unique and irreplaceable. For example, let’s say you have a one-of-a-kind baseball card; it’s the only one that exists. You could trade it for a different card, but you’d end up with something entirely different. The same concept applies to NFTs.
NFTs can appear in many different forms, representing various digital assets. For example, they could mean anything from a title of ownership to an asset or something like intellectual rights.
NFTs are often associated with digital art created by various artists and traded on the marketplace. However, NFTs have been branching into multiple fields, such as retail, gaming, real estate, and sports.
How Does NFT Work?
Each NFT’s individualized identity and ownership is verifiable through the blockchain ledger, which tracks the NFT’s information. They made their first appearance on the Ethereum blockchain but have moved to other blockchains, including Bitcoin Cash and FLOW.
Like any other type of art, NFTs can be bought and sold. The price of the NFT hinges on market demand, also similar to physical art forms. Additionally, some NFTs operate the same as art replicates. For example, you can purchase replicas of famous art, like Picasso or Rembrandt. The same logic applies to some NFTs: you can buy parts or reproductions, but they don’t hold the same value as the original.
In some cases, NFTs come with a license to the digital asset in question. However, copyright ownership isn’t automatically granted. Whoever holds copyright ownership may reproduce work to profit from.
What Can Be An NFT?
NFTs can appear in a variety of forms. Although digital art is a recognized form of NFTs, it can represent various digital objects. For example, images, videos, text, music, and believe it or not, even tweets can be purchased and sold as NFTs.
However, NFTs appear in sports, virtual world environments, and many others. Fans can collect and trade NFTs related to their favorite player or sports team. The National Basketball Association Top Shot platform partakes in NFTs by offering enthusiastic fans collectible NFTs in the form of video highlights displaying clips from various games.
Or, they may also represent pieces of land in a virtual world environment, virtual clothing, and other similar things.
Why Have NFTs Surged Suddenly?
NFTs gained popularity in 2021 suddenly, seemingly out of the blue. Several guesses exist regarding why they abruptly surged, pushing their way to the forefront of everything. While some individuals attribute the attention to widespread lockdowns, forcing people to stay at home, thus spending more time on the internet, others see it as a status.
NFTs are a method of owning various possessions online or in a virtual environment, indicating social status and individualized tastes. NFTs offer the digital alternative to purchasing an ultra-expensive bag or clothing for some individuals.
However, others find NFTs so appealing because of the sudden rising prices, giving the implication of significant returns and a ‘get-rich-quick’ mentality. Some participants “flip” NFTs by purchasing them, then selling them within a couple of days or even a few hours for profit.
NFT Marketplace: What Is It?
NFT marketplaces are critical for transactions to take place. They create a bridge that closes the chasm between buyers and sellers. Some marketplaces offer tools to develop NFTs within mere minutes.
The marketplace is slightly different from other types of platforms. It allows buyers to browse and buy what they’d like via bidding. It requires NFT developers and enthusiasts to utilize the marketplace to ensure lucrative deals on the digital asset in question.
A variety of NFT marketplaces exist, some better than others. The quantity of NFT marketplaces has expanded drastically, muddying the pool of choices. The best marketplaces ensure easy and flexible access to NFTs while simultaneously resolving conventional issues surrounding the revenue streams of creators.
A few renowned NFT marketplaces include:
- OpenSea (one of the best according to industry standards)
- Nifty Gateway
- Myth Market
Buying & Selling NFTs
Buying and selling NFTs requires a few things from the buyer. It’s not as simple as going on a regular website and purchasing something with your credit or debit card.
Buyers need to consider which marketplace they want to buy from, what kind of digital wallet is necessary to store it, and the kind of cryptocurrency they’ll need to complete the sale.
Nearly any digital image, or any other digital asset, can be purchased as an NFT. If you’re new to NFTs and plan on purchasing, watch out for fees. Specific marketplaces require a “gas” fee, which covers the energy necessary to complete the transaction on the blockchain.
Or, you may have to pay a conversion fee (example: dollars into ethereum) and closing expenses. Ethereum is most commonly used to purchase NFTs, but there are a few other types buyers use for their purchases.
To sell an NFT, the process looks considerably different. NFTs are sold on various marketplaces, so the process may vary based on the platform. For the most part, you upload your content to the market then follow instructions to convert it into an NFT. From there, you add specifics like a description of the work and suggested pricing.
The majority of NFTs are purchased using ethereum. However, you can also buy them with other types of ERC-20 tokens like WAX and Flow.
How Do You Make An NFT? Can Anybody Do It?
Given the dramatic boom in attention to NFTs, many people want to participate. You may be wondering if anyone can create an NFT or if they need to have special privileges. The answer is anyone can do it. Since NFTs can be nearly any type of digital content, the possibilities are virtually endless.
However, making and selling NFTs has a few requirements. You need a digital wallet and must purchase a small amount of ethereum. Additionally, you’ll need a connection to an NFT marketplace so you can upload your content and convert it into an NFT.
The process of making the NFT itself depends on what you plan on selling. For example, digital artwork is trendy among NFTs, which artists may create using a digital art app. On the other hand, the setup you’d need to record a song would look very different. So, the development stage hinges on what you’re developing.
You can find Krikey NFTs with almost every style of avatar. As such, you should be able to easily find one that looks just like you, a friend, or a loved one. Plus, since they are brand new, you can purchase them for a low price.
NFTs garnered worldwide attention in 2021, seemingly grasping the focus overnight. The world of NFTs offers an appealing appearance of the possibility of profits and social status. However, for some, it simply ends up being a mirage. Given that NFTs are primarily unregulated and hinge on the hype behind them, the possibility of losses is prevalent.
With that said, NFTs could revolutionize how music, sports, gaming, art, and even real estate are bought and sold. Buyers and sellers alike have the potential to profit exponentially off the buzz surrounding their content.
Who knows? NFTs could very well be the future of ownership. They may remain in the limelight, holding a position as one of the most sought-after digital assets. Time will tell.