The Non-Fungible Token or, shortly, NFTs are the biggest hype on the market right now. What are NFTs exactly, how do you create one and how do you sell it? Where? Is it worth to own digital art during these uncertain times or is it just a temporary puff? You can read all the answers in the rows below.
What is a NFT?
Non-fungible Tokens gain more and more publicity each day that goes by. We will call then just NFTs throughout this article. NFTs is just digital art, and when we say art, we refer to absolutely anything: pictures, paintings, objects, anything that comes to your mind actually. You won’t see it physically next to you though, everything is digital, so in the online world. For the sake of imagination, let’s think that the item you buy and re-sell is a token. Non-fungible means that that respective item is unique. It cannot be replaced with anything alike. Just like a small comparison, you can exchange a Bitcoin for another Bitcoin. You cannot do the same thing with a NFT. each one is different from another one (different value, different meaning, different price). In conclusion, you own something unique in the digital world.
How do NFTs work?
Now that we saw what is a NFT, let’s see exactly how they work. They are very much related to the blockchain market. NFTs are units of data stored on a blockchain digital ledger. In comparison, a blockchain is different than a normal data base in the idea that a “blockchain” means several blocks of data “linked” together. This chain of blocks create a shared digital ledger. Each ledger is stored globally across thousands of different servers; cryptocurrency is based on the same principle.
It is important to understand the difference between cryptocurrency and NFTs. Crypto coins are fungible assets, like I said earlier in this article. You can exchange a Bitcoin for another bitcoin, but you cannot do the same with NFTs; that’s why they are non-fungible. and don’t worry about your data being taken away, because each NFT is unique, it cannot be changed or stolen thanks to the principles of cryptography. Another important thing you should be aware of is that most NFTs are part of Ethereum blockchain. ethereal is a crypto coin, like Bitcoin, but its blockchain also supports these NFTs.
How do I buy a NFT?
There are quite a lot of marketplaces where you can buy/bid for a NFT and we will give some examples in a few moments. On most of them, you can either see the value in dollars of that respective token or the decimals in ether, since NFTs are part of Ethereum’s blockchain. Some have a fixed price, although it might change quite often. That is because of the volatility of the cryptocurrency market.
So let’s see where we can buy NFTs from. Some marketplaces are specialised in selling art and music tokens, others sell sports-only tokens, others miscellaneous and so on. Some of the most popular places where you can purchase are OpenSea.io, NBA Top Shop, Sorare, SuperRare, Foundation.app, Rarible, Mintable. Venly, Zeptagram, Zora, GROW.HOUSE, Valuables and many more. Once you go on one of these websites, you need to have a crypto wallet in order to upload new NFTs, buy, sell, basically….for anything. The most regularly accepted crypto wallet is MetaMask, but you can also use for others Coinbase Wallet, Formativ, WalletConnect, Torus, Portis, Kaikas, Venly, Dapper, Authereum etc.
What is mining?
As NFTs are part of crypto blockchain, they are partly responsible of the carbon dioxide emissions generated by cryptocurrency. Generating a crypto coin involves the process of mining. This means that when somebody invests in cryptocurrency, then the details of the investment are entered on a distributed ledger, called the blockchain. The process is complete only when a “miner” verifies the transaction as legitimate.
How to make a NFT?
You can either buy the pre-existing NFTs on the marketplaces I just mentioned above – and later sell them for a better price. Or you can also make your own NFT or “mint” it. Basically, on the same websites, you hit “Create”, then upload the specific file, image, video that you want to turn into a NFT, and follow the instructions from there on. You can choose either to mint single or multiple NFTs and afterwards just select the price and the type. You may need to pay some gas fees when minting your own NFT, but this would be a different fee from platform to platform. Don’t forget that you need a crypto wallet for all these transactions.
Hype or puff?
In the last months, NFTs are being talked about everywhere. People invest large sums of money in order to invest in a NFT and later sell it for a much better price. There are cases where teens made tens or even hundreds of thousand of dollars just with this trade. Is it worth it though? Others talk about the “dirty world of NFTs”. They claim it is environmentally unethical, it is an “ecological nightmare pyramid scheme”. Why? Pretty much because of the mining. These individual pieces of digital art are responsible of large amounts of carbon dioxide emissions generated by the cryptocurrencies to buy and sell them.