Non-fungible tokens, or NFTs, are the latest cryptocurrency phenomenon to go mainstream. And after Christie’s auction house sold the primary-ever NFT artwork — a collage of images by digital artist Beeple for a whopping $69.3 million — NFTs have instantly captured the world’s attention.
So what are NFTs?
In the easiest terms, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets which are easy to trade on the blockchain.
Although which may be far from easy for the uninitiated to understand, the payoff has been big for many artists, musicians, influencers and the like, with traders spending top greenback to own NFT variations of digital images. For instance, Jack Dorsey’s first tweet sold for $2.9 million, a video clip of a LeBron James slam dunk sold for over $200,000 and a decade-old “Nyan Cat” GIF went for $600,000.
However NFTs aren’t exactly new. CryptoKitties, a digital trading game on the cryptocurrency platform Ethereum, was one of the original NFTs, allowing people to buy and sell virtual cats that had been each distinctive and stored on the blockchain.
So why is the NFT phenomenon taking off now?
What are NFTs?
Non-fungible tokens, or NFTs, are items of digital content linked to the blockchain, the digital database underpinning cryptocurrencies corresponding to bitcoin and ethereum. Unlike NFTs, these assets are fungible, which means they are often changed or exchanged with another similar one of many same value, much like a dollar bill.
NFTs, however, are unique and never mutually interchangeable, which means no NFTs are the same.
Think of Pokémon cards, uncommon coins or a limited-edition pair of Jordans: NFTs create scarcity among otherwise infinitely available assets — and there’s even a certificate of authenticity to prove it. NFTs are typically used to purchase and sell digital artwork and may take the form of GIFs, tweets, virtual trading cards, images of physical objects, video game skins, virtual real estate and more.
Tips on how to buy NFTs
Essentially, any digital image might be bought as an NFT. But there are just a few things to consider when shopping for one, especially should you’re a newbie. You will have to determine what marketplace to purchase from, what type of digital wallet is required to store it and what kind of cryptocurrency you’ll need to finish the sale.
A few of the most common NFT marketplaces embrace OpenSea, Mintable, Nifty Gateway and Rarible. There are also niche marketplaces for more particular types of NFTs, too, corresponding to NBA Top Shot for basketball video highlights or Valuables for auctioning tweets corresponding to Dorsey’s presently up for bid.
However be wary of fees. Some marketplaces cost a “gas” payment, which is the energy required to finish the transaction on the blockchain. Other charges can include the prices for converting dollars into ethereum (the currency most commonly used to buy NFTs) and shutting expenses.
For those who’re curious and want to know more about what it’s like to purchase an NFT, we went ahead and acquired one. (And yes, it is a cat.)
Find out how to sell NFTs?
NFTs are additionally sold on marketplaces and the process can differ from platform to platform. You may essentially upload your content material to a marketplace then comply with the directions to turn it into an NFT. You will be able to include specifics such as a description of the work and steered pricing. Most NFTs are purchased utilizing ethereum however can be bought with different ERC-20 tokens resembling WAX and Flow.
How you can make an NFT?
Anyone can create an NFT. All that’s needed is a digital wallet, a small purchase of ethereum and a connection to an NFT marketplace where you may be able to upload and turn the content material into an NFT or crypto art. Simple, proper?
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