What You Need to Know About NFTs
NFT is a trending word or term these days, they are everywhere but not everyone knows what it is and what it is about. Though some might have an idea of what NFT is but is your idea of NFT actually what it is? This post will be revealing information on what NFT is and what it is all about. Sit back and read this post for everything you should know about NFT.
NFT is a digital data that took over the world of arts and gaming towards the close of 2021. This asset became very popular and made headlines after selling for millions of dollars in auctions. Just like cryptocurrencies, NFTs are digital assets investors, brokers, and traders are particular about investing in.
What is an NFT?
NFT simply means Non-Fungible Token. Obviously, that doesn't define it clear enough, so we will be going into details. In this context, non-Fungible means unique and unreplaceable. Let us take the popular cryptocurrency, Bitcoin for example. When you trade one bitcoin for another, you have the same bitcoin, this means it is fungible. NFTs on the other hand, when you trade one, you can never get the exact piece again except you’re buying it again from the current holder. In other words, they are as good as a physical token with value.
Any file that can be easily reproduced can be stored as a non-Fungible token so as to identify its original copy. The majority of the NFTs you have come across are most likely minted from motion artworks. Minted? Yes, we will get to that later in this post. NFTs can be minted from any kind of art or photography, it could be a meme or a tweet. Music and video files can also be minted to NFTs. The bottom line is NFTs can be any unique digital file that holds value.
How Does NFT Works?
The uniqueness and proprietorship of NFTs are variable through the blockchain ledger. NFTs were first launched on the Ethereum blockchain, subsequently, other blockchains like Bitcoin, Cash and Flow now support NFT. Be it an MP3 file, JPG, GIF, or any other digital file, the NFT that verifies the proprietorship can be bought or sold just like any regular art piece.
It is possible for an NFT to be available in replicated copies. It is just like the case of walking into an art gallery and finding multiple copies of a famous art piece. In this scenario, in the case of NFTs, the replicated copies will be valued lower than the original copy. NFTs most times come with a license to the assists it originates from; however, this does not guarantee copyright ownership. The copyright owner of the NFT may decide to reproduce the item and the owner is entitled to any royalties.
How to Create an NFT
The first and most important step to creating an NFT is defining the digital asset in the Ethereum blockchain. This can also be done on other blockchains like Bitcoin, Cash, and Flow. After creating your NFT, it is assigned with a unique ID that will be used to reference or buy and sell it in the marketplace. This section of this post will guide you on how to create an NFT. Below are the steps involved in creating an NFT.
- Define the digital asset.
- Create a crypto account for transferring and receiving funds.
- Upload your NFT to the Ethereum blockchain or other supported blockchain.
- Await a confirmation that will be sent to you before you can start using your NFT.
On completing the above steps, you now own an NFT and you can use it however it suits you. NFT can be used to track the proprietorship of digital assets, establish rights and even develop digital assets with specific characteristics.
How to Buy NFT
To own an NFT, you either have to create one or buy one. Don’t think by screenshotting or downloading the image you are a multimillion dollars NFT owner. Images of NFT you download or screenshot from the internet are just copies of the Original NFT and hold no value at all.
If you are considering buying NFTs, you can get them on a lot of online platforms, or the marketplace as it should be referred to. However, the marketplace you will be going to depends on the NFT you want to buy. They are various marketplaces for different kinds of NFTs. For example, if you want an NBA NFT, you will have to visit the NBA top Shot Marketplace.
In addition, you will be needing a wallet specific to the marketplace you are buying from and you will also have to credit the wallet with cryptocurrency to pay for the NFT you desire.
NFTs are in very high demand and due to this, they are released in batches or drops. A similar case is where events tickets are sold in batches. Back to the topic, when these NFTs are finally released in batches, there will be a frantic rush for each drop that is released. To this end, it is advisable to get your account ready and your wallet funded for anticipated NFT drops. Here, we have collated and highlighted the list of some of the best NFT marketplace to buy almost any NFT.
- Axie Marketplace
- NBA top Shot Marketplace
- Nifty Gateway
- Theta Drop
- Larva Labs
Gamers have become more aware of NFTs and games now list NFTs amongst other items in their in-game purchases. NFTs assets in games are bought and sold within the games they include but are not limited to specialized weapons, skins, and avatars.
What is an NFT Art?
NFT is a bit complicated to understand, but we have broken it down into bits in this post. This section will clearly define what NFT art is. Firstly, it is a digital asset that only exists in the digital universe. You can own it but can’t touch it.
An NFT art can be a digital file of any format, not just limited to JPG and GIF. It could even be a meme. What is most important is that it is non-fungible. Here, we will be giving another instance of its non-fungibility. If you hand out a $100 note, you can get back 5 $20 dollar notes, which equates to $100 and your money will still have the same value.
However, if the $100 was signed by Barrack Obama, it is unique and non-fungible and will be valued higher than a regular $100 note without an autograph of the ex-president. From the above illustration, the signed $100 note is as good as an NFT art.
How to Sell an NFT
As far as you own an NFT, you can sell it whenever you want. Regardless of whether you bought from an NFT creator or you minted it. However, how you sell it matters. To make the most profit from selling your NFT, there are procedures and strategies to follow. Below is a guide on how to sell an NFT.
- Choose a marketplace to sell your NFT
- List your NFT for sale
- Manage your listing
- Choose a marketplace to sell your NFT
This is the first step to selling your NFT. Just as we made it known earlier, there are different marketplaces for different NFTs. Depending on the NFT you want to sell, choose a suitable marketplace.
Listing your NFT for sale
Once you have found the best marketplace for your NFT, navigate to the SELL button and click on it. Generally, the marketplace would provide guidelines for listing your NFT.
Managing your listing
Now that you have listed your NFT, anyone can come to the marketplace to place a bid on it if there is a starting price or buy it directly if it has a fixed price. You may also have to do some promotions via social media and other suitable platforms.
How to Mint an NFT
Minting an NFT is basically the same thing as creating one but it also involves listing and selling it. Here are instructions on how to mint an NFT.
- Link your wallet
- Create your NFT
- Fund your wallet
- Link your wallet
Firstly, you need to create a crypto wallet and link it to the NFT marketplace you want to sell on.
Creating your NFT
Once on the marketplace, you can easily locate the CREATE button. Click on it to create your NFT. Here you will be prompted to upload the file, depending on the marketplace, there may be other information fields to fill in. Once you’re done, click on COMPLETE, and you are done minting your NFT.
Funding your wallet
Now you may be wondering why you have to fund your wallet since you are selling and not buying. It is simple, you will be charged for transactions you make or receive, and it is called Gas Fee.
To finalize the minting process, you must list your NFT and manage your listings.
Now, we have NFTs, but there are no guarantees that they will be around forever. While some people are making millions of dollars from NFTs, there are still a lot of controversies about this digital asset. However, what you should be most careful about when dealing with NFTs is the marketplace. To ease your search, this post already lists the top 10 NFT marketplace.
This content should not be treated as investment advice. Cryptocurrency is a highly risky and speculative market.