When we talk about specific cryptocurrencies, we often see abbreviations including BTC and ETH. However, when you see references to NFT, you should understand that they aren’t a cryptocurrency in their own right. That is, they don’t have actual monetary value and they can’t be transferred into other cryptocurrencies. Instead, this relatively new blockchain phase, backed primarily by Ether, sees people spending millions on digital art. For example, CryptoPunk 6965 sold for a staggering $1.54 million and Beeple’s Everydays: The First 5000 Days sold for an eyewatering 42,329 Ether which was equivalent to 69.3 million dollars. You’re likely still scratching your head and wondering what the point is. If so, you’re in the right place. Let’s take a look at everything NFT.
What are NFTs?
NFTs, which stand for non-fungible tokens, offer proof of ownership over digital media. They are non-fungible because it’s one of a kind – you can’t make copies of it. When someone owns an NFT, they can monetise all usage of that art. However, the issue is that owning an NFT doesn’t offer exclusive rights. After all, the internet will always be the internet, which means content will forever be replicated.
Let’s boil this down to a simple analogy. You can head down to your local art museum and see an original Picasso. You may want to take it home with you but you can’t, because you aren’t the owner. All you can do is take pictures of it. However, if you’ve got a painting hung up on the wall at home, you can do whatever you like with it without consequence because you are the owner. The latter is essentially how NFTs work. Each NFT will have a unique code that can’t be replicated. When a sale is made, the code is allocated to that transaction on a blockchain, which unequivocally proves ownership.
Typically, NFTs are associated with Ethereum, which is a cryptocurrency. If you’re into digital art, you can make your own NFT and sell it for ETH. Then, all you need to do is track the market and sell Ethereum for cash through Paxful.com. Through their peer-to-peer exchange, all you need to do is sign up and begin browsing the best offers available.
NFT Verification Process
NFTs exist on a blockchain, which makes them extremely easy to track, which is important for the verification process. When you purchase an NFT, you become the owner and the transaction is registered to the ledger. Then, if someone buys it from you, they become the owner and the ledger is once more updated. Given the nature of blockchain technology, no one can ever forge ownership of an NFT.
Creating Your Own NFT
This may all sound complex, but creating an NFT is much easier than you realise. No matter what digital media you’re attempting to create, the process is straightforward:
- The first thing you need to do is decide on digital media, which includes music, text, video, and more. Just like real art, the more unique your work, the more it will sell for.
- After you’ve created your content, you need to decide on a blockchain network to add it to. As mentioned previously, the largest supporting cryptocurrency for NTF is Ethereum.
- If you’ve decided to list your digital art with Ethereum, you need to invest in cryptocurrency to pay for your listing. However, you can choose to use OpenSea and squash this cost.
- If you list with OpenSea, all you need to open an account is an existing crypto wallet. Other popular wallets include CryptoPunk, Axie Infinity, and Rarible.
- Whichever platform you choose, all you need to do is sign up and fill in a couple of details. Then, you’re all set with your very own token.
If you’re artistically minded, creating an NFT is the easy part. The next step is to sell it for the highest price you can. Typically, your new token will automatically enter an eBay-type marketplace where people can bid. However, if you decide that the bidding gamble isn’t for you, you can assign a fixed price to your token and sell it on a store. Further, you will need to decide the royalties you will receive from all sales of the token.
What’s the Point of NFTs?
You may be sat there asking what the point is. After all, we’ve already told you that any digital art can be copied because of… internet. Therefore, the value in NFT will change depending on whether you’re an artist or a buyer.
If you’ve put your hands up and you’re a budding artist, NFTs can hold value to you because they can be an excellent way to sell your work and turn a profit. Your art doesn’t even have to be great; it just needs to be unique and pique the interest of the meme generation – just take a look at the CryptoPunk line.
The Future of NFTs
NFTs may seem pointless to you, but they’ve been a great asset in the digital art community. Through the use of NFTs, artists no longer need to argue over IP because everything is documented through the blockchain.
When we look at NFTs, we have to remember they’ve been around for less than a decade. Therefore, we don’t have access to a wealth of use case studies. When Bitcoin was first invented, it was laughed off as a fad. However, it’s now beginning to revolutionise the financial world. For people wanting a slice of internet history, NFTs may be a great investor. Just as we can sell unboxed toys for a fortune, the future of NFTs may be fruitful.
NFTs refer to non-monetary digital assets in that, you can pay cryptocurrency for blockchain-documented proof that you own content. Therefore, if people were to use your NFT, you will receive revenue. However, NFTs aren’t fool proof because everything on the internet can be replicated. For the artists amongst you, NFTs likely have the most value at the moment. After all, it’s another avenue for income generation.