The popularity of Non-Fungible Tokens (NFTs) has exploded recently with a number of high-profile athletes, musicians, and actors especially driving their current success.
An NFT is a cryptographic asset on a blockchain that has a unique identification code and metadata that makes it unique from all others. They cannot be replicated and are real-life tokens like artwork.
They are bought and sold online in an NFT marketplace, most commonly with cryptocurrency. They have been around since 2004 but have recently proven to become very popular as a form of digital art that can be bought and sold.
In their essence, NFTs create digital scarcity as appose to the usual digital creations which are almost always infinite in supply. Cutting off the supply and making certain types of artworks makes them more valuable while there is demand.
This is where NFTs differ from cryptocurrency, as each NFT is not equal to another, its value changes based on the demand, the value the owner places on it, and the value others place on it too.
Anyone can view the NFT and can use the image where they please, though only one person can prove themselves the rightful and legal owner of the NFT.
Essentially, NFTs are like physical collectors’ items like baseball cards and autographs, just that they are digital.
NFTS started gaining mainstream attention once Beeple sold his “Everyday: The Firs 5000 Days” digital artwork for $69 million at Christie’s. Beeple is the nae Mike Winklemann goes under for his digital artwork, and he crafted a piece composed of 5000 daily drawings he had previously finished.
If you are tempted to enter the world of NFT collection, there are a few things that you’ll need to do before you start your collection.
You will need a digital wallet; this will allow you to store your NFT as well as your cryptocurrency.
With your digital wallet all set up, many NFT providers will require payment in cryptocurrency, which can be bought with your standard credit card. Cryptocurrency like Ether, or whichever your NFT provider accepts can be bought on platforms like Coinbase. Once you have purchased your cryptocurrency you can move it into your wallet and begin your shopping.
Please take into consideration exchange charges, these will be made clear when purchasing and a percentage of your transaction can be added when you buy cryptocurrency.
There is a wide range of NFT providers online and it is recommended you check out a wide range to ensure you find what really grabs your attention.
OpenSea is the most used site for the purchasing of NFTs. It has a wide range of digital assets available on its platform and is free to sign up and browse through. You can also create and sell your own NFTs, which is known as minting, on their platform.
This marketplace supports more than 150 different payment tokens, so there is a strong chance that whichever cryptocurrency you use, will accept it. As an opening place to start looking for NFTs, this is one of the best sites to go to.
Larva Labs is best known for its viral CryptoPunk NFT project. These were originally given away free back in 2017, but some CryptoPunk NFTs have been sold for millions of dollars since.
CryptoPunk NFTs have sold out but can be purchased from third-party owners through the site, but they do still have further digital art projects available for bidding on through the built-in marketplace.
Foundation.app is a simple, no-frills way to bid on digital art and a great place again for newcomers to the NFT market. Sales here are made through Ethereum and since its launch in 2021, it has already sold more than $100 million worth of NFTs.
NFT artists are invited to the platform by the community of the Foundation site. Buyers simply need to have a crypto wallet funded with Ethereum to be able to purchase anything that is available on the site.
Another that accepts Ethereum cryptocurrency is Mintable. The site, which is backed by billionaire Mark Cuban, looks to create an open marketplace like OpenSea to encourage the buying and selling of NFTs. The site backs all forms of artistic expression through NFTs and looks to make it easier to mint your own NFs and sell them on their platform.
It is important to remember that just because you are able to easily purchase NFTs online, it doesn’t mean you should purchase all you can immediately. NFTs carry risk and their future is far from certain at this current stage.
With NFTs being in their infancy it is advisable not to invest too heavily at first, in terms of your finances available.
NFTs could continue to boom and earn the early investors huge amounts, although they could level out of drop depending on the demand and interest which is currently high.
If you have money to spare you can invest and enjoy some digital art which means a lot to you, and it is a possibly lucrative investment in the long term.