Decoupling the word NFT will be a great start into having a good first impression on the space, its stands for Non fungible Token, what does it mean for something to be fungible, it means being able to replace or be replaced by another identical item. So in other words non fungible denotes unique, it cant be replaced by another or exchanged with another identical piece, why? Because a NFT is a unit of data that can be sold and traded and is maintained on a digital ledger called a blockchain. The NFT can be linked to a specific digital or physical asset (such a file or a physical object) as well as a license to use it.
To make this very interesting let me explain the blockchain concept and how it's important in the NFT hype, unlike conventional assets where a certain percentage suffers from authentication issues, only a handful can be traced from inception, majority have obscure historical records which makes it easy to perpetrate fraud and other type of deceptive behaviors, The blockchain fixes this, The authenticity of a digital currency, assets or file can be verified on a digitally distributed ledger on computers where it is stored around the world(peer to peer) and is immune to change by anybody (immutability) that's the Blockchain.
Basically an asset with blockchain implementations instantly becomes a fuel for an explosive trend, we had many artists, influencers, celebrities jumping on the train and making a ton of money from it and guess what you can do it too, that's the whole point of a place where participation is not limited to rich and famous individuals.
WHAT CAN SERVE AS NFT (USES)?
Digital art - one of the earliest use case of NFT, earlier this year a digital artist Mike Winkelmann, also known as Beeple, sold his digital artwork entitled "Everydays - The First 5000 Days" for US$69.3 million.
Generative art - a very cool and new use case involving generating unique art by using computer algorithms
Virtual worlds - also known as the Metaverse, which are basically virtual worlds such as Decentraland, Sandbox, CryptoVoxels and Somnium Space allow users to create galleries to show off NFT art, clothes, real estate and attend live events with friends online.
Games - based on how the gaming industry has risen in success in recent years, this is one space i would be paying close attention to alongside the use of virtual reality in metaverses, a combination of both will definitely be a bang and yes, this is financial advice!! Axie infinity is making a killing in this space.
Music - we have recently seen a sharp increase in the sale of music as NFT, recently Tory lanez sold out his album on an NFT marketplace.
Movies
Sport
Academic writing etc.
BLOCKCHAIN NETWORKS
Before you start creating, buying or selling NFTs, you need to decide the blockchain network which will be convenient for you to transact with. The most popular network is the Ethereum blockchain with its native currency the ether, It will be used to transact on platforms/marketplace for NFTs, we also have other blockchains current gaining momentum in adoption such as,
- Binance Smart Chain
- Tezos
- Cardano
- EOS
- Tron
- Polkadot
- Flow by Dapper Labs etc.
So what does this mean ? each marketplace supports a specific blockchain standard, wallet and Token (currency) to be able transact, you can't sell a digital art bought with BSC on Binance marketplace on other platforms than only work with the Ethereum blockchain.
MARKETPLACES
There's a handful of marketplaces online where you can create and transact NFTs, The Ethereum ecosystem being the largest is where all the action takes places, here are some of the popular Ethereum based marketplaces,
Other examples of popular marketplaces for NFT,
HOW TO CREATE NFTS
The process of creating NFT is called Minting. The process is hassle free as long as you have an idea about what you're doing as a creator, here is a list of things you need in order to create an NFT.
- A wallet
- Token(ether, Flow, ada, Bsc)
- Digital/physical asset (music, art, video)
- Internet
Here's is a list of popular wallets thats support storage and buying of NFTs,
Once you're on the website, you can always check for supported wallets, going forward you'll see an option on how to connect the wallet to the marketplace once you bypass authentication and successfully connect to the platform.
You'll see a create button, a visible button you'll see on the marketplace, you can't miss it, click on the button and follow the instructions displayed on the website about what you're trying to mint such as Features, description, properties etc.
Fees
It costs almost nothing to mint NFTs on some marketplace but in some it could cost around $50 to $400 depending on the marketplace ,so you need to do your own research when it comes to the marketplace to mint. If its on a Ethereum based platform there's a caveat, a fee called gas fee will be paid, gas fee is basically a fee paid in ether to miners who perform and solve heavy computational equations to validate and add the transaction to the Ethereum blockchain as a reward for their service and this fees varies, The more the congestion on the network the higher the fees and vice versa.
HOW TO BUY AND SELL NFTs
To sell you'll need to locate the NFT in your collections after successful connecting the wallet to the marketplace, find a sell button and click on it then it will take you to a page where you can set the terms and conditions, you can run an auction or sell at a fixed price of your choice, you can also set the terms and condition for royalties inform of a commission for when the buyer sells the NFT in future. To buy NTFs requires the same process as selling, connect your wallet after funding it ,pick the NFT, make sure you have sufficient tokens to finish the process and either bid or buy at a fixed price.
TRENDS AND HYPE
The Blockchain revolution is here to stay, centuries down the line and fast-forward to Today our idea of perceived value keeps changing and Evolving. Now its digital and on the internet with records distributed on the network for everyone to verify which is unique.
Imagine being able to see for yourself without any discrepancies in details how a valuable artifacts like Rosetta stone or The painting Monalisa by Leonardo da Vinci was passed down or purchased by who to whomever from one century to another, it will be so amazing and too valuable since the authenticity and history of ownership down the years could be verified.
Is there a bubble ? yes I believe so, is that bubble going to burst soon? sadly no, I am superimposing the rise of NFT hype with the .com era when the internet was at its infancy and there was a lot of hype around it before the eventually bubble burst, afterwards a correction will follow and everything will return to normalcy.
Before you go around buying NFTs, let me warn you, always make sure you do your own research on any project, study the trends in the space and do your diligence. It should be importantly clear that some of these influencers hyping up a project are just in it to make money and exploit their fans since nobody will be held responsible, you'll be left to bear the brunt of your irrational behavior, Always make sure to watch the trends and invest accordingly.
One thing is clear, the craze is far from over, NFTs are just in their early stages as time goes on mainstream adoption will be off the roof there's also going to be a series of corrections before it finally settles and becomes regulated.
Welcome to the future.
Thank you.
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