The term NFTs is all over the place, taking the news headlines by storm and becoming the major talk of the crypto space. But you’re still very much confused about the whole NFT craze and feel entirely lost whenever the subject matter is brought up.
Well, this article is prepared for you to grasp what NFT actually entails as well as how to immensely benefit from it by understanding how to chalk out huge sum of money for yourself.
JUST EXACTLY WHAT IS NFT?
NFT is simply “Non-Fungible Token”. Yeah that’s simply what it is. But that makes no relatable sense to you right? So before we move on, try substituting the word “fungible” with “replaceable”. Therefore, NFT is a Non-Replaceable Token; A non-replaceable entity.
Let’s take for instance the worldly highly regarded popular Monalisa painting by Leonardo Da Vinci, there’s just one original copy of the painting and no other one right?
So even after taking a picture of the painting on your smartphone, it does not in any way affect the value of the original painting and neither does it mean that there is a duplicate of it. The painting can be called an NFT. It is not replaceable (Non-fungible).
NFTs could be art, collectibles, moments, and anything that is single, unique and original and as well can’t be duplicated. NFT is a digital object such as a drawing, animation, piece of music, photo, or video with a certificate of authenticity created by blockchain technology. It cannot be forged or otherwise manipulated.
Non-fungible tokens could be seen as digital assets that represents real-life objects like art, music, in-game items (swords, cars, cards, and the likes of them) and videos. They are bought and sold online with cryptocurrencies, and they are generally encoded with the same underlying software as many cryptocurrencies.
With that said, you’re currently wondering why so much money for something that can still be viewed by a third party, or in the case of art can be snapped with a mobile device by another individual.
Well this is because an NFT allows the buyer to own the original item. Not only that, it contains built-in authentication, which serves as proof of ownership. Collectors value those “digital bragging rights” almost more than the item itself.
THE ENIGMATIC VALUE OF NON-FUNGIBLE TOKENS
Unlike cryptocurrency, NFT is a powerful kind of token that allows for a flexible way to represent non-fungible assets on a blockchain. A non-fungible token cannot be interchanged with another unit of the same thing. The beautiful part about NFT is that they never lose their quality as they exist in digital form and are securely stored in the infallible blockchain.
The value of an NFT is dependent on the utility, ownership history, future value ad liquidity premium.
- The utility value depends on how the NFT can be exploited. Two major usage of NFT is for gaming and music concerts. Ability to use NFT in a different application would increase its value too. But due to the unfortunate fact that NFT game players can only use an NFT in a particular game, the latter may not be possible. The value of an NFT can also be increased when partnership is formed with businesses to provide benefits to people who hold NFT’s thereby increasing the value and leading to an increase in participants for an event where NFT is accepted, hence a win-win situation for all parties.
- Value of an NFT can also sky rocket when the owner is a famous artiste, brand or establishment. When companies or individuals with strong brands issue NFT tokens, it would generate traffic and of course more users to the system.
- Future value of NFT can be increased by speculation which is human nature and a non-trivial part of the current financial system. Scarcity of supply also increases the value.
- NFTs built on the ethereum blockchain can be swapped for ethereum and this would cause a subsequent increase in potential buyers.
With this values, it can be seen that the future of NFT is vast and would rake in a lot of funds for those who grab the opportunity and key in early. For gamers, how would you feel making cool cash while enjoying your game.
NFTs IN ART, SPORTS AND THE MUSIC INDUSTRY
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 retain even more of the profits.
In addition, artists can program in royalties so they’ll receive a percentage of sales whenever their art experiences a change in ownership or a new buyer purchases it.
This is an attractive feature as artists generally do not receive future proceeds after their art has been initially 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 sold out in minutes, with the highest bids coming in at 1.5 wrapped ether (WETH) which is equal to a mammoth $3,723.83 at the time of writing.
In the sports space, NBA Top Shot generated more than $500 million in sales in the first quarter of the year. A single LeBron James highlight NFT fetched more than $200,000.
This is still yet to be implemented in the football space, and it’s just a matter of time as it is a question of when. Moment of top footballers like Cristiano Ronaldo dos Santos Aveiro and Lionel Messi who is on his way to a seventh Ballon d’or award would definitely generate even more cash than the NBA top shots.
Investors can cash in on this by hastening the implementation of NFTs in sports yet to witness such breakthrough.
The music world is not left out, as celebrities that have long been in the game like Snoop Dogg and Lindsay Lohan are hopping on the NFT bandwagon, releasing exclusive memories, artwork and moments as securitized NFTs.
HOW TO BUY NFTs
With much said and done as regards the value of NFTs and how they’re making waves in the music, art and sports industry, let’s take a look at how you can buy some and probably kick-start your own NFT collection.
First and foremost, you’ll need to get a digital wallet that allows you to store NFTs and cryptocurrencies like Trust Wallet and Metamask.
You’ll likely need to first purchase some cryptocurrencies, like Bitcoin, depending on what currencies your NFT provider accepts which in most cases is the world’s second largest cryptocurrency; Ethereum. You can buy cryptocurrencies using a credit card on trusted platforms like Coinbase, Kraken, eToro, PayPal as well as Robinhood. You’ll then be able to move it from the exchange to your wallet of choice.
Also, not to forget the ever annoying aspect of crypto transactions, which is the gas fee. You’ll need to put that into consideration.
Where can I buy NFTs?
After answering the question of how, now it’s time to look for where to actually buy one.
Currently, there are three major NFT marketplaces; OpenSea, Rarible, and Foundation. With time, more will come to limelight as more investors are looking for an angle they can take advantage of in the NFT space.
This peer-to-peer platform is regarded as the number one hub of “rare digital items and collectibles.” To get started, all you need to do is to sign up with your persona details and create an account to browse NFT collections.
You can buy the following two NFTs below their current worth
Rarible is a democratic, freely accessible marketplace that allows artists and creators to issue and sell NFTs. RARI tokens issued on the platform enable holders to weigh in on features like fees and community rules.
Here, artists must receive “upvotes” or an invitation from fellow creators in order to post their art. Artists must also purchase “gas” to mint NFTs which connotes a boast of higher-caliber artwork.
Though the aforementioned platforms and others are host to thousands of NFT creators and collectors, be sure to do your own research (DYOR) carefully before initiating a purchase. The whole process is one of ease and full of excitement.
Finally, after calmly and thoroughly reading through this article, I trust the meaning of NFTs is now very clear to you. Stick around as more about the NFT space will be unveiled here in this “NFTs and Cryoptocurrency” category on expomaster.com.ng.