What are NFTs? Description of non-fungible tokens
What are NFTs? Description of non-fungible tokens - New York (CNN Business) Non-fungible tokens (NFTs) are the latest cryptocurrency phenomenon to enter the mainstream. NFTs suddenly caught the world's attention after Christie's auction house sold his first-ever NFT artwork (a collage of images by digital artist Beeple) for a whopping $69.3 million.
So what are NFTs?
Simply put, NFTs transform digital works of art and other collectibles into unique, verifiable assets that can be easily traded on the blockchain.
While it may not be easy for beginners to understand, the payoff is huge for many artists, musicians, influencers, etc., with investors spending top dollar to own NFT versions of their digital images. For example, Jack Dorsey's first tweet was $2.9 million, LeBron James' Slam Dunk video clip was over $200,000, and ten years ago the "Nyan Cat" GIF was $600,000.
But NFTs are nothing new. CryptoKitties, a digital trading game on the cryptocurrency platform Ethereum, was one of his original NFTs that allowed people to buy and sell unique, blockchain-stored virtual cats.
So why is the NFT phenomenon getting so much attention now?
His CEO of Artsy, Mike Steib, told his CNN Business: “Others are intrigued by the idea of acquiring a digital asset that anyone can copy and then claim ownership of it.NFT’s recent major price record diversifies Bitcoin holdings, etc. It seems to be driven primarily by newly minted crypto billionaires and billionaires who are trying to take an interest in the crypto ecosystem.”
What are NFTs?
A non-fungible token (NFT) is a piece of digital content linked to the blockchain, the digital database that underpins cryptocurrencies such as Bitcoin and Ethereum. Unlike NFTs, these assets are fungible. That is, like dollar bills, they can be traded or exchanged for another identical item of equal value.
NFTs, on the other hand, are unique and incompatible with each other. In other words, no two NFTs are the same.
Think Pokemon cards, rare coins, or a pair of limited-edition Jordans. NFTs create scarcity in an otherwise infinitely available asset. There is even a certificate of authenticity to prove it. NFTs are typically used to buy and sell digital art and can take the form of GIFs, tweets, virtual trading cards, images of physical objects, video game skins, virtual real estate, and more.
How to purchase NFTs
Essentially any digital image can be purchased as an NFT. However, there are some things to consider when buying, especially if you are a beginner. You will need to decide which marketplace you will purchase from, what kind of digital wallet you will need to store it in, and what kind of cryptocurrency you will need to complete the sale.
Some of the most popular NFT marketplaces include OpenSea, Mintable, Nifty Gateway and Rarible. There are also niches for more specific types of his NFTs, such as NBA Top Shot for basketball video highlights and Valuables for auctions such as Dorsey's currently bidding tweets.
However, be careful with fees. Some markets charge a “gas” fee, which is the energy required to complete a transaction on the blockchain. Other fees include the cost of converting dollars to Ethereum (the currency most commonly used to buy NFTs) and settlement costs.
If you're curious and want to learn more about what it's like to buy an NFT, go ahead and buy it. (And yes, it's a cat.)
How to sell NFTs?
NFTs are also sold on marketplaces and the process may vary by platform. Basically you upload your content to the marketplace and then follow the instructions to convert your content to NFT. You can include details such as a description of the work and a suggested price. Most NFTs are purchased using Ethereum, but they can also be purchased with other ERC-20 tokens such as WAX and Flow.
How to make NFT?
Anyone can create an NFT. All you need is a digital wallet, a small purchase of Ethereum, and a connection to an NFT marketplace where you can upload your content and convert it into NFTs or crypto art. Simple, isn't it?
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