NFT is a new word that has entered our vocabulary, and it is a follower to Bitcoin & Blockchain. People are asking what NFT is and how it is used. We have created an explanation of NFT and its uses in digital art.
Let’s not waste any time and get to know more about NFTs.
NFTs explained: What is NFT in Crypto and How can it be explained?
Let us first give you a concise definition of NFT. NFT stands for Non-fungible Token. Fungible is something that can be used in a mutually interchangeable. You can either exchange a $10 note for another $10 note, or you could exchange it for two $5 notes. You can exchange the money in both cases as the value of the note will not change. Money is a fungible asset, which means it can be exchanged without decreasing its value.
So when we say Non-fungible, it means something that can’t be exchanged with a similar item of similar value.
А simple example. Each banknote has serial numbers. We exchange banknotes without thinking about them. But if these numbers are important to us, for example, we came across a bill with the numbers 88888888, and then it becomes unique in its way.
Here, uniqueness is key. An item that is non-fungible is therefore unique and authentic. It is something that has intrinsic value due to its authenticity. We now come to the token portion. A token is a 40 digit string made up of words and numbers. It contains the information of the original creator of the masterpiece, the current owner (one can be the only one), and the current item price. Blockchain technology is used to secure this information. It can’t be changed by anyone due to its decentralized nature.
When you combine all three words, NFT is an incorruptible token that holds ownership of information about an item that’s unique and authentic. NFT can be described as a certificate of ownership. This is the basic definition of NFT. However, if you really want to get an understanding of NFTs, you will need to use digital art as an example.
What is NFT used in digital art?
Many people are wondering what NFT is and why there is so much fuss about it. As we have explained above, NFT is a sign of authenticity. It provides the internet with an authentic stamp of approval when it comes to digital arts. As we all know, anything can be altered and others can claim their work. It’s almost impossible to find the original creator for artwork online. That’s where NFTs come in. The NFTs basically aim to bring art collection into the digital age by selling digital art as NFTs.
Digital creators can use NFT to make their work available to the public without needing to prove ownership or authenticity. Digital artists have the ability to generate NFT for their original work, then auction it off to someone else while still keeping the information about the creator, current owner, and current value. NFT’s best feature is that a portion of the value can be sold to other people as long as the original creator is involved. NFT is a great way for digital artists to make money from their art.
NFT is not only used to paint but people now use it to purchase digital collectibles. Jack Dorsey started an NFT auction to celebrate his first tweet. It currently has a value of $2.5million. Kings of Leon, a rock band, has also announced that NFT will be used to release their new music album. The Nyan Cat GIF was sold for $587,000 using NFT. There are many new NFT marketplaces such as OpenSea and CryptoPunks. There are many digital collectibles that can be purchased with NFTs. Although it’s still a niche market in crypto, it is growing quickly.
What is the relationship between NFT and Blockchain?
I explained that NFT was built on Blockchain technology. Blockchain technology is already known to be foolproof and has been extensively used in managing many cryptocurrencies. The public ledger keeps track of every transaction made through NFT, which makes the entire system transparent. This technology also creates a chain that allows for traceability back to the original creator.
It is important to remember that NFTs can only be purchased with cryptocurrency and Ethereum in particular. Ethereum is currently the market leader for issuing and managing NFTs, thanks to its early lead. Some services accept Bitcoin to buy and sell NFTs.
NFT: A Brief History
Let’s now learn more about NFT. The reason Ethereum has an early lead is that were the ones that started the project in 2015 with their NFT blockchain system, ERC-721. The Ethereum team brought ERC-1155 to the table and advanced technology long before Bitcoin and Flow.
2017 was the year Ethereum launched CryptoKitties, which was the first time NFT was made available to the general public. This game allowed players to buy, collect, breed, and sell virtual cats with Ether (Ethereum’s cryptocurrency). It was a mind-boggling feat that the $117,712 highest-selling cat sold was at that time. Ethereum took a cue and integrated the NFT system into its cryptocurrency. They now lead the market.
NFT: The Cons
We have already discussed the benefits of NFT, but there are still some important things to remember before you invest in a digital collectible via NFT. It consumes a lot of energy to create and maintain the system. Also has a negative effect on the environment. This is because, unlike cryptocurrency and other tokens, non-fungible tokens run on a proof of work blockchain that uses more energy. Extreme mining will cause GPU prices to rise in the future.
Critics warn that NFT is a bubble and that people who buy strange GIFs or collect rare video clips at such high prices will be left behind. Experts believe that rare collectibles and paintings are not worth their value due to the artistry of the artists, but also because there is an established market that wants to own and collect rare paintings and artworks that no one else has.
Experts say that people who buy digital artworks aren’t paying huge amounts simply because they love art. They want to create a bubble and make money selling it at a higher cost. It is worth noting, however, that the digital universe does not suffer from a shortage of artwork, unlike physical masterpieces. Therefore, prices will fall once the bubble bursts.
How to buy NFTs
It is easy to buy an NFT. All you have to do is go to one of the NFT marketplaces and make a purchase. Before you buy your first NFT, however, there are some things you should consider.
You must first ensure your crypto wallet supports NFTs. It would be best to determine which NFT marketplace you wish to purchase from and the cryptocurrency needed to do so. While Ethereum (ETH) is the most popular NFTs, other cryptocurrencies are also available. Make sure you have enough currency to purchase your unique piece of digital art.
OpenSea is one of the NFT marketplaces that you can check out. Mintable, Mintable, and Nifty Gateway are others. Grimes also sold her video on this NFT gateway.
How to sell NFTs
You can also sell your digital content on NFT marketplaces if you are the owner of the piece. Although the details might differ, you can upload your digital work and fill out all the information about it, as well as set a price.
Your NFT will then be available for purchase by those who are looking to buy NFTs. You will be paid for your efforts when your NFT is purchased. Be aware that not all marketplaces will allow you to sell your NFT. Before you decide which marketplace to sell your NFT, make sure you carefully read all the details.
How to make NFTs
Once you have completed the initial setup, making NFTs will be very simple. The hard part is actually finding the rest of it. You will need a wallet that supports NFTs such as MetaMask.
When you created your wallet you can link it to the platform you wish to sell your art on (OpenSea, Rarible, etc). You can now upload your digital art, set a price, and begin an auction.
Things can get a little complicated. Rarible will require you to pay a fee in order to list your artwork. You will need to pay an additional fee to convert your art into an NFT. Rarible will then charge you a commission and money for the transfer of the cryptocurrency from the buyer to your wallet.
Although making non-fungible token arts is simple, selling them can be difficult. You should make sure that you have enough time before you start selling your art.
Where can I sell NFTs?
There are many NFT marketplaces out there, including OpenSea, Rarible, and many others that you can use to sell your NFT.