what is NFTs ( Non-Fungible Tokens ) and how does it work?

NFTs are all over the internet now, people have a random animal, robot, fruit, and more stuff as their profile pictures, and recently celebrities started having them too!

These are NFT arts designed by a stranger, sold for thousands of dollars, and the owner of this piece of art is the unique owner.

So, what is NFT? And how did it becomes that popular? In this blog, we will explore NFTs and their future.

Definition of NFT

NFT stands for “Non-fungible Tokens, ” a non-interchangeable file stored on a unique secured blockchain.

These files include videos, photos, and audio files, stored as data on the blockchain, and each file is identified with its unique token that cannot be copied or multiplied.

What is NFT exactly?

These files create someone who happened on a digital device such as a computer or a tablet, video files generated using machines to provide visual colours.

Photos and art drawings that are unique and used to support a specific cause, we will explore that more later.

Audio files, like certain sounds or music, are digitally created from scratch.

When did NFT start?

In late 2017, a game called CryptoKitties raised over 13 million US dollars in investments in its new gaming style. Crypto Kitties is a virtual world where players sign up and roam around adopting pets virtually, pets like dogs and cats. Payment methods in this game happen through digital wallets like crypto wallets that use bitcoin, etherium, etc.…, and this is where individuals started visioning the future long before metaverse came into existence. They saw those one-day cryptocurrencies would take over, so we should take action from now. They started programming more pets to the game and selling them at a low bitcoin price, not to mention a single bitcoin costs around $41,000.

Categories of NFT

Seven major NFT categories are roaming around the internet now:

Art

It is now the most popular and famous type of NFT, with the board yacht ape on the top of the list, creating a wide range of ideas.

It can use the art with assistance to a specific cause. For example, Board Yacht Ape’s cause is the access, which means any BYA (Boarch yacht Ape) owner can access a yacht party in the US. Those who bought a single BYA card hold a unique number to scan the entrance. Each card has features like the BYA with a captain, access to the captain room, and many other features.

Another widespread use of this NFT art is when you keep it as a profile image to prove to the world that you own an NFT. Once the metaverse arrives and the whole world starts shifting to the virtual world, you will have some access to your NFT that you bought for 0.5ETH, which is equal to approx. 1600 US Dollars.

Music

A piece of music NFT is certified ownership of that particular sound, also known as copyrights. The owner will have complete control of how much you would sell it for; it can sell these NFT’s to another party. This part of the NFT brings the musicians and composers together to trade and create freelancer work for each other.

Domain names

Owning a domain is a big player in the NFT Market; usually, a 3rd party service controls your domain when purchased. It’s not like that in the NFT market. When you buy a domain, you get many benefits, especially since you will own the exclusivity of that domain.

You will be able to use these domains in the metaverse; domains like AMAZON, EBAY, and many other famous domains are being sold. Imagine you own the Amazon domain in the metaverse. You might force amazon to buy it from you for 5ETH (180,000 US Dollars) or even more!

Game Objects

Back to the gaming section, companies are not selling the games as NFTs but instead, they sell the game as usual. But the in-game purchases happen through cryptocurrency, making the objects purchased in the game an NFT.

Plus, DLCs (Downloadable content) have started becoming NFTs, taking EA Games as an example.

Sports Moments

This one is different, and it’s a video type file that shares memorable videos in the sport’s history, encrypted into cryptocurrency-based videos.

Miscellaneous Online Items

well, this is the market that sells random online items in exchange for an Etherium.

Jack Dorsey sold a message on Twitter (Tweet), yes he sold a tweet, someone now owns a tweet digitally.

Virtual fashion

You can now own fashion items, tops, bottoms, shoes, etc. As an NFT, of course, virtually, you can wear them in the metaverse or some other VR or AR world.

Famous NFT owners

• Shawn Yue Man-Lok

NFT: Board Ape Yacht Club, Cryptopunks

• Justin Bieber

NFT: Illustrated bears

• Steph Curry

NFT: Virtual Sneakers

• Lionel Messi

NFT: Man from the Future, Worth the Weight, The King Piece.

Most popular NFT

The most popular NFT is the collection of Cryptopunks. It was one of the first-ever NFTs to be made, started in 2017. The characters of this collection feature punks but are fully pixelated (8bit art).

American rapper Snoop Dog and Jay-Z are some of the celebrities who own a CryptoPunk.

This NFT has sold at the highest price was an alien punk at 7.5 million US Dollars.

Safety of NFT

The increasing popularity of NFTs has sparked a lively debate about their security. NFT safety is not strong enough to ensure the absolute protection of investors’ assets because it is a new technology.

Scams are one of the most significant NFT dangers impacting investors and projects. Malicious actors impersonate well-known platforms, exchanges, or wallets to steal users’ personal information and gain access to their virtual assets, jeopardizing NFT security.

The ability of centralized platforms to preserve the private keys of all assets kept on them is critical to NFT security. 

Even if platforms adopt the most modern security measures, a substantial NFT risk is associated with users’ failure to securely store their passwords and other sensitive data, which unscrupulous actors can use to acquire their non-fungible tokens. 

NFTs purchased by individual art collectors may become unavailable in specific situations. When a consumer buys an NFT, he gets a link to the file that contains the artwork. This artwork isn’t saved on the blockchain; instead, which can store elsewhere. NFT platforms can close their windows at any time.

How to buy an NFT?

We have put together the easiest way possible to buy NFTs.

1. Purchase a Cryptocurrency. Sign up for a cryptocurrency exchange like Coinbase and deposit Ethereum into your account.
2. Open a Cryptocurrencies Wallet. Open a “Non-custodial” wallet, such as Metamask to store and handle your cryptocurrency and digital assets.
3. Transfer Your Cryptocurrency: Deposit your ETH coins from Coinbase to your wallets (Metamask or another), which offers you the ability to buy NFTs on several platforms.
4. Become a member of the NFT Marketplace, Raible: Join Raible, a website that sells NFT artwork, or you can check out Opensea!. You’ll be prompted to connect your digital wallet (Metamask or another) to the website, which will allow you to buy and store digital assets.
5. Purchase your first NFT: Be aware of current “gas fees” when acquiring your first NFT, whether through auction or direct sale, since they might add hefty expenses on top of your purchase.

How to create your NFT?

1. Choose your item

Let’s begin with the fundamentals. You’ll need to figure out what unique digital content you want to make into an NFT if you haven’t already. It might be a customized painting, photograph, song, collectable video game assets, meme, GIF, or even a tweet. An NFT is yet another digital artefact with only one owner. 

Before proceeding, make sure you own the copyrights to the object you wish to make into an NFT. You could get into legal complications if you make an NFT for a digital asset you don’t even own.

2. Decide on a blockchain

After you’ve chosen your digital asset, you can proceed to mint it into an NFT. The first step is to decide the blockchain wallet that you’ll utilize for your NFT. Ethereum is the most recognized among NFT creative artists. 

3. Go to the opensea

website and create an account; only then you can start designing your first NFT to sell it.

4. Upload!

You’ve finally arrived at the point where you can mint your NFT. A step-by-step guide for submitting your digital image to your preferred NFT marketplace should be available. Using this method, you’ll be able to convert your digital image (a PNG, GIF, MP3, or another file format) into a marketable NFT.

How to sell your NFT?

 After minting your NFT the right way (drop a comment if you would like to learn how to mint the right way), many websites will offer you a place to sell your NFT in a digital auction.

We will list them for you, don’t worry!

1. Open Sea
2. Larva Labs
3. Axie Marketplace
4. Raible
5. NBA Top Shot
6. Foundation
7. SuperRare
8. Mintable
9. Nifty Gateway
10.  Theta    

Is NFT a good investment?

NFTs became mainstream, with celebrities supporting the non-fungible tokens, it’s safe to say that is growing to something bigger, Yes NFT is a good investment, only when the investor follows a specific strategy, mints the work, and market it right.

No one knows when everything will fall apart or when everything will boom, but yet investing in cryptocurrencies has its risks while NFT is more fun to create and invest in and less risky.

Will NFT go up?

With the rise of cryptocurrencies (digital currencies) NFTs will also rise, they are connected in the serial numbers, especially since NFT is a unit that can be only bought using digital currencies.

Effects of NFT on ethereum and digital currencies 

Cryptocurrency supporters are ecstatic about the millions of dollars moved in this new market for digital goods and commodities, which has helped the careers of certain digital artists, such as Beeple’s. However, some analysts and experts are predicting a probable bubble in the NFT frenzy and the crypto art resale market, which has seen prices skyrocket.

While as mentioned above, the connection of NFT and ethereum is strong, at the moment NFT is only accessible if you own at least 0.5 ETH which is equal to approx 1700 US Dollars.

Recent million-dollar purchases, such as the selling of Twitter CEO and Co-Founder Jack Dorsey’s first tweet for $2.9 million and the selling of digital artist Beeple’s crypto artwork for $69.3 million, have fueled demand for NFTs.

Can you make money from NFT?

The short answer is Yes, you can.

Though it might seem hard to create one, NFT is not only for creators, investors can play a role, those who have invested in ethereum in 2017 which is before the boom, now can buy popular NFTs and resell them to make extra money, just like how the stock work.

It’s crucial to keep in mind that, while trading NFTs may appear to be simple, it’s not always the case. When you mint (create a collection) of your NFT and sell it, you’ll suffer from the marketplace and Ethereum expenses, which can be rather significant depending on when you sell it. Because of the unpredictability of this emerging industry, trading NFTs might be risky.

Will NFT be worth anything?

Creators, investors, designers, artists of all types are all into NFT, it’s a new way and a new technology to buy sell, or event rent digital items.

Things are usually more precious when they are rare. Just one Mona Lisa exists. Only 59 LeBron James NBA Top Shots exist (each of which was bought for $US387,000).

However, the fact is people are generating millions upon millions of NFTs, which are overwhelming the markets and causing speculative purchasing frenzy. Thousands of people talk about what they’re planning to buy on forums and group chats, hoping to inflate prices and then sell when they feel they’ve made enough money.

Future of NFT

Any blockchain project’s future is uncertain, experts believe, however, that NFTs are all here to stay and will keep expanding outside the realms of art and gaming, particularly if rich investors continue to invest.

The features that can represent ownership rights, give social status, grant unique access, regulate licensing, and confirm authenticity have also contributed to NFT’s growth. It enables you to own your items in the same way that Bitcoin allows you to become your banker.

With that in mind, the Metaverse is getting closer to us, and the use of digital art will be a major player in interior designs of buildings within the Metaverse, or even the wall art.

You can read more about the Golden Click’s Metaverse blog here:

Golden Click Blog