What is NFT, how do you buy, produce and sell it?

After Bitcoin and Blockchain, NFT is another word that has entered our encyclopedia. Buzzword is everywhere and people are wondering what is NFT and what is it for? Well, there really is not a single line explanation. That’s why I’ll give you a complete explanation of NFT, its use in digital art and more.

So without wasting time, let’s go and learn all about NFT (Non-Fungible Token) in detail. Here I have mentioned all the questions that people have in mind regarding NFTs.

First of all, let me give you a clear definition of NFT and what it stands for. NFT is the abbreviation for Non-fungible token. Fungible, by definition, means something that is mutually interchangeable. For example, you can exchange one $ 10 note for another $ 10 note or exchange it for two $ 5 notes. In either case, the value remains the same and you will have no problem exchanging the money. Here, money is a changeable object because it can be exchanged without their value falling.

What is NFT?

So when I say Non-Fungible, it means something that cannot be exchanged for a similar item of similar value. To give you a simple example, if you wanted to replace the painting of the Mona Lisa stored in the Louvre with another print of the same image, would it be the same? And more importantly, will it have the same value? The answer is no. Here, the incomparable Mona Lisa painting is a non-fungible object that cannot be exchanged for another object with an identical appearance.

The unique is the key here. A non-fungible object is therefore something unique and authentic. Something that has value for its authenticity. Now we come to the part where we talk about the middle ground. A token is a 40-digit string of words and numbers that contains the information about the original artist who created the masterpiece, the current owner of the item (there can only be one) and the current price of the item. This information storage is coupled with Blockchain technology, which can not be modified in any way due to its decentralized system.

Finally, when you put the three words together, NFT stands for an indestructible token that contains information about the ownership of a unique and genuine item. NFT is basically a certificate of ownership or authenticity. This is the general definition of an NFT, but if you want the full idea of ​​NFTs, you need to understand the concept of using digital art as an example, which I covered in the next section.

What is the use of NFTs in digital art?

Many people have to wonder what is the use of NFT in digital art and why is it so noisy? Well, as I explained in the previous section, NFT is a signature of authenticity and it gives the authentic stamp of approval on the web when it comes to digital art. We all know that in today’s world everything can be treated and people can publish the work of others as their own. In fact, on the web, it’s virtually impossible to find the original creator of a work of art, and this is where NFTs come into the picture. NFTs aim to bring the art collection into the ordinary digital age by offering completely digital works of art sold as NFTs.

NFTs allow digital creators to put their works in the public domain without having to worry about proving their ownership or authenticity. Digital artists can generate an NFT for their original work and auction it off to another person while retaining information about the original creator, current owner and current value. The best part of NFT is that every time digital art is sold to another person, part of the value will be transferred to the original creator. NFT is therefore an excellent proposal for digital artists who want to make money on their works..

The beauty of NFT is that it is no longer limited to paintings, but people are now using it to buy digital collectibles of all kinds. For example, Jack Dorsey launched an NFT auction on his first tweet, which is currently worth $ 2.5 million.

What is the connection between Blockchain and NFT?

I explained that above Blockchain technology is the foundation on which NFT is based. We already know that Blockchain is infallible and that it is used massively in the management of multiple cryptocurrencies. Every transaction made by NFT is recorded in a public finance book, which means that the whole system is very transparent. Another aspect of this technology is that it creates a chain, which means that everything can be traced back to the original creator.

One thing to note is that you can only buy NFTs with cryptocurrencies and especially Ethereum. Ethereum is currently the market leader in the issuance and management of NFTs due to its early lead. However, some services also accept bitcoin to buy and sell them.

A brief history of NFTs

Now that we’ve gotten to know NFT in detail, let’s find out how it was created. First of all, the reason Ethereum has a head start is that they are the ones who started this project with their new NFT blockchain system called ERC-721 in 2015. Subsequently, Ethereum brought ERC-1155 and advanced technology before Bitcoin and Flow could catch up .

In what was the first introduction of NFT to the masses, Ethereum introduced in 2017 a blockchain game called CryptoKitties. In this game, players could buy, collect, breed and sell virtual cats using Ether (Ethereum’s cryptocurrency). At the time, the best-selling cat was $ 117,712, which was creepy. Following on from this, Ethereum incorporated the NFT system into their cryptocurrency and are now the market leaders.

To give you some numbers, in 2018 NFT had a total market share of $ 50 million; in 2019, it reached about $ 150 million, and by 2020, the NFT market rose to as much as $ 338 million. Now, with the current boom, it’s anyone’s guessing where the market will go from here.

The disadvantages of NFT

Although I have discussed the benefits of NFT, there are a few major drawbacks that you should keep in mind before investing in a digital collectible through NFT. Primarily, it requires a huge amount of energy to generate and maintain the system, which makes it unsustainable and has a negative impact on the ecology. This is because, unlike cryptocurrencies, a non-fungible token runs on a proof-of-work blockchain that is less energy efficient. Anecdotally, expect GPU prices to rise further in the near future due to extreme mining.

Other than that, critics warn about it NFT is a bubble, and people who buy a weird GIF or collect on a rare music video for such a high cost are going to crumble. Experts say that rare paintings and collectibles do not retain their value solely because of their artistic character, but also because there is an established audience that wants to own and collect rare paintings or a work of art that no other person owns.

Experts point out that those who buy digital art do not pay large sums because they appreciate the art. Instead, they will create a bubble to make money by reselling them at a higher price. It is worth noting that the digital world does not experience a shortage of art – unlike physical masterpieces – and prices are likely to fall when the bubble bursts.

How to buy NFTs?

To buy an NFT, simply go to one of the NFT Marketplaces and make a purchase. However, there are some things to consider before making your first NFT purchase.

First, make sure your cryptocurrency wallet is NFT friendly. Next, you need to see which marketplace you want to buy from, as well as the cryptocurrency required to buy the NFT you are interested in. For example, while Ethereum (ETH) is one of the major players in NFTs, there is exchanges that also use other cryptocurrencies. So make sure you have enough of that currency to pay for the unique digital artwork you want.

Some of the NFT marketplaces you can check out include OpenSea, Rarible, Mintable, Nifty Gateway, etc.

How to sell NFTs?

If you own a piece of digital art or other content that you want to sell as NFT, you can also do so at NFT Marketplaces. Although the details may vary, simply upload your digital work, provide information on how it was created and more. and set a price for your digital file.

Then your NFT can be purchased by people who want to buy NFT. Every time your NFT is sold, you get paid for your work. Note, however, that some marketplaces charge a fee for hosting and selling your digital file. So be sure to read it in small print carefully before choosing the marketplace where you want to sell your NFT.

How to produce an NFT?

Making NFTs is pretty straightforward once you have completed the initial setup. The hardest part is understanding the rest of the process. Basically, you need a wallet that can be used with NFTs, like MetaMask.

Once you have created your wallet, you can connect it to the platform on which you want to sell your art (such as OpenSea, Rarible, etc.). You can then upload your digital artwork to the platform, select a price and start an auction.

But things are a little complicated. At Rarible, for example, you have to pay a small fee to put your artwork up for sale. Next, you have to pay an extra fee to have your artwork converted to NFT, so once your NFT is sold, Rarible will also charge a commission, as well as a fee to transfer the cryptocurrency from the buyer’s wallet to yours.

In general, Creating a non-fungal token is easy, but selling it requires some work. So make sure you have enough time before you start and do not set a price too low, otherwise you risk losing money by selling your works.

Verdict: Where is NFT headed?

It was a comprehensive explanation of NFT and what it means for digital art and other digital collectibles. Although NFT adds a new dimension that can help confirm authenticity, I think the current craze to own an exorbitantly priced digital item is misplaced.

It is an amazing technology that can have a huge impact on the music industry and other creative professions. It will certainly reduce middlemen and artists will be able to reap the benefits directly from consumers.

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