What is NFT crypto? A guide to understanding NFTs

NFTs or non-fungible tokens are definitely having a boom time, with brands and companies like NIKE, Taco Bell, TIME magazine, The New York Times, and NBA and celebrities like Mark Cuban, The Weeknd, Eminem, and Paris Hilton launching new products/services into the NFT market.

NFTs became increasingly popular when auction house Christie’s auctioned an NFT artwork by digital artist Beeple for over $69.3 million in March. With this sale, Beeple propelled the concept of NFT directly into the public and media spotlight.

What does NFT mean?

What does NFT mean?

NFT stands for non-fungible token. Non-fungible tokens are unique digital assets that have proof of ownership and authenticity verified with blockchain technology.

An NFT exists on a blockchain, usually Ethereum, and can give the buyer or owner unique or exclusive verifiable ownership rights to digital files or physical and digital objects.

NFTs represent ownership of items from the art world, such as art, photography, music, baseball cards, collector’s items such as physical art, and more. They usually have a cryptographic hash to prove ownership of digital goods.

How does an NFT work?

Most NFTs work on the Ethereum blockchain technology – a decentralized digital ledger that records transactions.

But other blockchains and decentralized protocols also have features that can support the creation of NFTs such as Flow, WAX, Tezos, and Binance Smart Chain.

An NFT turns a digital file or digital item into a digital asset and is registered on the blockchain possessing a digital signature, making it easy to verify ownership and trade NFTs.

Can anyone create NFTs?

Yes, literally anyone can create and sell NFTs. Any internet user can create a digital file and, turn it into an NFT on the Blockchain (This process is called ‘minting’) and put it up for sale on the NFT platform or marketplace of your choice like OpenSea NFT, Rarible, SuperRare and Foundation.

You can even schedule royalties between 5-10% depending on the platform, which will be the commission you will receive, when someone resells your NFT work for a higher price.

As with purchase NFTs, as a creator, you will also need to have a digital wallet (Metamask, Trust Wallet or Coinbase Wallet), and it needs to have some of the Ether (ETH) cryptocurrency to pay gas fees – costs for using the Ethereum network where most platforms and NFTs are created and hosted.

Is NFT the same as Bitcoin?

No, NFT is not the same as Bitcoin or another altcoin (cryptocurrencies that emerged after Bitcoin). Although NFTs are created and hosted using the same blockchain technology that powers cryptocurrencies, they are totally different.

The main difference between Bitcoin (BTC) and non-fungible token (NFT) is that Bitcoins are fungible, meaning that they have the same value, and you can exchange one Bitcoin and receive the same Bitcoin, meaning that their values define them and not their unique characteristics.

Bitcoin was designed to be a store of value and currency of exchange on the Internet – for people buying and selling products/services and accepting payments in digital currencies.

One NFT is not the same as another NFT, because each NFT is minted representing something different (music, photography, digital art, video clip). NFTs are usually purchased with cryptocurrencies such as Ethereum.

What is an example of NFT?

What is an example of NFT

An NFT can be created in different sizes and shapes, and can represent any file on the Internet or any object in the real world.

Digital art

CryptoPunks was one of the earliest NFT projects on the Ethereum blockchain and its art has grown in value as collector’s items.

This project was developed by Larva labs in 2017 and consists of 10,000 collectible pixel art images of different sizes and shapes such as people, zombie aliens, and monkeys. CryptoPunks gained highlights and headlines when a set of nine (9) Punks were sold online at a Christie’s auction for $16.9 million.

Memes

The girl in the iconic “Disaster Girl” meme – a photograph of a little girl looking into the camera with a slight smile as a house catches fire behind her back, the image that made her famous 16 years ago sold in April for $473,000.

Tweets

The most notable example of tweet sales is that that of the Twitter CEO Jack Dorsey, who auctioned his first ever tweet as an NFT for $2.9 million in March.  Virtual Homes (digital real estate)

In March, a virtual house called “Mars House” by artist Krista Kim was sold for $500,000.

The project was created with the help of a video game software architect, the NFT ownership of the owner of this futuristic project can explore the Mars mansion or the metaverse using Virtual Reality (VR) glasses, which includes sunbathing outside the Mars house (in the Mars atmosphere).

Sports highlights

The NBA in partnership with blockchain company Dapper Labs Flow has designed and launched NBA Top Shot – an NFT platform that sells digital collectibles in the form of sports collectible cards from North America’s top professional basketball league – NBA and WNBA (Women’s National Basketball Association, embedded with iconic moments and highlights from the game. 

Music

Musicians have also entered the NFT space and are selling their work in the form of NFTs, such as short videos for clips of their music, and other concert access rights.

One example of this is the rock band Kings of Leon, who in March this year released a complete album in the form of NFTs.

The other example is the case of rapper Eminem, who partnered with the Nifty Gateway NFT platform for an event where the rapper premiered several of his works in the form of NFTs on the Nifty Gateway platform, including an original beat.

Is NFT a good investment?

To buy an NFT, the first thing to do is to create a crypto wallet and deposit Ethereum cryptocurrency and then find a market.

Before buying NFT, you should find out what type of crypto wallet and cryptocurrency or cash is needed to buy and store the NFT asset.

Ethereum cryptocurrency is the default payment token on most NFT markets, other NFT marketplaces like Nifty Gateway allow you to link your bank account, credit card or debit card, i.e. accept payments in US dollars, but the platform may charge a fee to convert the dollars into cryptocurrencies.

For content creators and digital artists, NFTs create new opportunities to sell digital art and digital products.

The other interesting thing is that NFT creators can receive a commission for each subsequent sale of their work.

Now, if your idea is to buy an NFT or digital token as a short-term or long-term investment, know that there is no guarantee that you can get considerable returns. While there are examples of some NFTs have sold for thousands and thousands or millions of dollars, others can depreciate.

As for the question of why people buy NFTs, there are different practical reasons, such as just buying the NFT to download the image and use it as a profile picture on social media or for other purposes without fear of copyright infringement.

How to sell an NFT

The process of selling NFTs can vary depending on the platform and marketplace. For example, on NFT marketplaces like SuperRare and Foundation you need to fill out a submission form and wait to be approved to sell your digital artwork, marketplaces like OpenSea NFT and Rarible are open, and you can sell your artwork, from the moment you create an account or log in as a wallet, usually Metamask.

But on most platforms, you upload your file – video, music, an image in any format like PNG, MP4, and MP3 – to the marketplace or platform and then follow the instructions to turn it into an NFT. And later you can add a title and description of the work and set prices.

NFT marketplaces usually host your NFT in an auction at a set time (usually 24 hours) and connect the highest bidder or winner of the auction with the creator of the NFT.

How to buy NFTs

You can create, buy, collect, sell or trade NFTs on online platforms or marketplaces. The creator, digital artist or current owner of the NFT can choose to sell the NFT at a fixed price or set up a timed auction and you can bid for the NFT.

WePlay Collectibles are for people who want to be part of Esports events and show that they like players and talents in a different way, besides merchandising. The WePlay Collectibles are part of a platform, where you can buy items with NFT technology – both digital and physical. They are rewards and items associated with a specific tournament.

WePlay Collectibles work through Ethereum, a software platform that uses blockchain technology. Blockchain is like a distributed ledger – a system that allows parties to exchange products, services, or financial assets, while securely managing transaction records. They are encrypted, organized in a series of blocks available to all platform participants (actually, their computers, to be exact), but impossible to alter. So you can be sure that the transactions of non-fungible tokens are protected from fraud.

The blockchain network is controlled and regulated by smart contracts.

Buying unique digital art from WePlay Collectibles is easy, and you can do it through the Binance NFT marketplace. If you already have a Binance account, you can use it to buy and sell digital art in the marketplace. If you are not yet a Binance user, register today and open your digital wallet to hold cryptocurrencies, collect digital art, and more.

To buy NFTs, you will need to have ETH, BNB, or BUSD in your Binance wallet. After crediting your wallet with any of these cryptocurrencies, you can bid on any non-fungible tokens available on the Binance NFT market.

Find the NFT you want, place your bid, win the auction, and the token will be transferred directly to your wallet! With any of these cryptocurrencies, you can bid on any NFTs available in the Binance marketplace.

Now you can own unique digital items and keep, sell or exchange them according to your own taste.

weplaycollectibles

Image: WePlay Holding

Find more information about the platform and NFTs at https://weplaycollectibles.com/

Largest NFT marketplaces

OpenSea NFT: also considered to be the first and largest NFT marketplace today, you can find NFTs from a wide range of digital collectibles (NFT art, music, sports, etc.).

Foundation: is an NFT marketplace that focuses exclusively on NFT art.

Rarible: is another popular marketplace and offers a variety of digital items in the form of digital assets such as Punks, DeFi, metaversos, digital images, video clips, music, etc., but its main focus is on digital art.

SuperRare: is another popular marketplace that focuses on, curates, and offers digital art.

Why are NFTs controversial?

Most NFTs are hosted on the Ethereum blockchain, and the controversy comes from the fact that the Ethereum blockchain – built on the Proof-of-Work (PoW) system – consumes a lot of energy and contributes to the carbon footprint.

For the proof-of-work (PoW) systems of blockchains like Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Dogecoin to work, they need a certain amount of computing power, and the miners (computers connected to the network that solve complex mathematical problems) use a lot of energy, which often comes from fossil fuels rather than clean or renewable energy.

But the Ethereum Foundation has announced an update to the Ethereum blockchain that will use the proof-of-stake (PoS) system – which requires no mining, and will be 99.98% greener correctly than many industries, and many eco-friendly artists will then be able to create artwork without fear of harming the environment.

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