Here’s everything you need to know about NFTs — the front runner for the future of art
- Non-fungible tokens (NFTs) aren’t like cryptocurrencies even though they are a digital asset.
- Their value comes from how rare they are, which is why some are going for millions a piece.
- Here’s everything you need to know about this latest blockchain fad that some are calling the ‘future of art’.
Non-fungible tokens (NFTs) aren’t like your normal cryptocurrencies. While one can exchange one Bitcoin or Ether for another — NFTs aren’t interchangeable.
This latest blockchain fad has people spending millions just so that they can have the bragging rights to digital art, music, and images — like Beeple’s Everydays: The First 5000 Days for a whopping $69.3 million and CryptoPunk 6965 for $1.54 million.
Despite speculations of a bubble, NFT sales volume surged to $2.5 billion in the first six months of the year — a nearly 200- fold increase from the first half of 2020, according to a report by Reuters.
What are non-fungible tokens (NFTs)?
NFTs give a person proof of ownership. This means that they can monetise the right to own it. However, since the internet is so porous, owning an NFT doesn’t necessarily mean that a person has exclusive rights since anything digital can be duplicated endlessly.
Simply put, think of it as the Mona Lisa. You can go to a museum and see the painting on display, maybe even take a picture, but you can’t bring it home with you — you don’t own it. But the painting that’s hanging on your wall at home that’s akin to a NFT because it’s all yours and you decide what you want to do with it.
The most common currencies used for an NFT transaction, which happen entirely online, are Bitcoin and Ether.
What is the difference between fungible and non-fungible tokens (NFTs)?
Both fungible tokens — like Bitcoin, Ether, Doge and other cryptocurrencies — and NFTs are a form of digital assets. While cryptocurrencies carry monetary value, NFTs are valued as per their uniqueness, akin to a collectors item.
Since each NFT is unique, one cannot be swapped out for another — just like you can’t swap your house for your neighbours’ even though you live on the same street or have the same number of rooms.
How do you verify the authenticity of your NFT?
Since NFTs live on the blockchain, they’re easy to track. Tracking allows for transparency and the verification of their authenticity. The blockchain contains the entire history of all of its owners, past and present.
Simply put, NFTs are like any other smart contract.
How can you create your own non-fungible token (NFT)?
Creating your own NFT isn’t as hard as one would think. Whether you’re looking to create a GIF or an image, the overall process is fairly straightforward.
The first thing you have to do is pick your artwork — it can be any kind of digital file — including text, music, or video. The more unique it is, the better.
Once you’ve picked out what you want to put up for sale, you need to figure out which blockchain you want to use. The most commonly used cryptocurrency is Ether and most of the biggest NFT platforms have Ethereum support.
Assuming you have chosen Ethereum, you will want to have some Ether on hand.This is because listing your NFT in a marketplace costs money — unless you choose to go with OpenSea.
The process is free on OpenSea, but you will still need a digital wallet in order to create an account and sign up. Other examples of NFT marketplaces include Axie Infinity, OpeanSea, CryptoPunks, NBA Top Shot, Rarible, Foundation and Sorare.
Each of these platforms has its own listing process, which involves typing up a couple of details and uploading your item. And, once all of that is said and done, you will have successfully created your own token.
How do you buy and sell your NFT once you have created it?
The token you have created will be listed in the marketplace for other people to bid. However, if you don’t want to opt for an auction, you can also set a fixed price on the selling page — and the royalties you want to receive from the initial sale as well as subsequent sales.
Now, all you need to do is sit back and wait for a buyer to come along.
What is the future of NFTs?
NFTs have been a boon for the creative community. Artists, musicians and others have a new source of income — one where they don’t have to quibble over intellectual property (IP). And, for investors, it’s a new way to invest their money.
And, as the CEO of Grayscale Investments told Business Insider India during a Twitter Live, new asset classes only come along “once in a generation.” NFTs are younger than Bitcoin. They haven’t even been around for a full decade. New use cases are still being discovered.
Published By : Business Insider