Blockchain technology has advanced massively over the last few years. Nowadays, it’s not uncommon to buy Dogecoin with paybis and other crypto coins. But one other trend appeared on the market: NFTs. NFT art has become so popular that questions like “how to buy NFT”, “where to buy NFTs from”, etc., are everywhere – from Reddit to Quora and other forums. Even Liverpool Football Club announced their new collection of NFT tokens.
But what’s NFT and what you should know about it? Let’s find out in this article.
What is NFT?
Fungible tokens like cryptocurrencies are categorized by their ability to be exchanged at equivalency. However, new assets on the blockchain like non-fungible tokens (NFTs) cannot be converted into other assets and are considered unique. That’s because they have metadata and identification codes that distinguish them from others — a property not shared by fungible tokens. For example, if a singer releases a new song, they can create an NFT token. And once you buy his NFT music, you can have access to the song. The means you can use it for exchange purposes.
How does NFT work?
NFTs are stored on the Ethereum blockchain and can be created using smart contracts. These NFTs, which store extra information that makes them work differently from standard cryptocurrencies, are the precursor to what’s called digital goods. They’re just like their physical counterparts — books, movies, games, and so forth — but they exist on the blockchain in an immutable state, making it easier to track who owns them.
Is it profitable?
Because of the large number of NFT projects, it’s tough to find projects that are worth minting. It is challenging to find a quality project with an expert team and because most crypto companies don’t mint all assets. This means that you face high competition from other masternode owners.
Well, NFTs can often be bought at a lower price, allowing you to make a higher profit margin. However, as the market becomes saturated with assets and market demand grows, prices will likely drop as well.
Where do I buy or sell NFTs?
Just like every stock or good, you should find a specific marketplace – an NFT marketplace. There, you can buy or sell your NFT collections.
Let’s see some of the bigger names.
OpenSea allows users to trade digital assets. Its ingenious marketplace is a place where anyone can buy and sell unique, digital items — from CryptoKitties to Magic the Gathering cards. With a simple user interface, OpenSea’s whole point is to be a peer-to-peer digital asset exchange for anyone looking to buy or sell cool, limited edition collectibles. It’s a go-to place for many NFT enthusiasts who want to release their collection.
Two things are important, though. Marketplace commissions and creator fees. Both are quite decent – commission fee is 2.5% while artists can put up to 10% sell-on clause, in order to keep making money from their art.
Rarible is a one-stop shop for digital non-fungible tokens — its platform is thoughtfully designed to make the buying and selling processes as smooth as it can, from browsing the vast range of products to actually making purchases. Using NFTs can level the playing field for creators; their value is now determined by the community, not by outsiders such as art galleries or publishers.
Rarible also comes with 2.5% commission fees but is way more generous towards artists – it allows up to 30% royalty fees. While this is not good news for resellers, it can actually help everyone. Low creator fees mean people can sell their coins for profit, and this is where NFT art loses sense. Kicking off speculators means you can focus on creating more valuable assets that resellers can trade for higher prices.
What is Metaverse, and how is it related to NFTs?
Metaverse is a parallel universe to the web as we know it. It’s hidden, but is set to become a major source of entertainment in the near future. With its numerous games already available, Metaverse is projected to become a gaming hub in the near future. It runs on its own Ethereum-based cryptocurrency — allowing for transactions without intermediaries or fees. But metaverse is aimed to become much more than that – virtual reality for everyone.
Are non-fungible tokens (NFTs) here to stay? Only time will tell — but they are certainly making a lot of people money, and they’re creating new possibilities for digital art. The Ethereum blockchain is currently the best platform for creating NFTs, but as with everything in the crypto space, changes happen overnight. While no one can guarantee you success in the NFT world, one thing is certain – you will have a lot of fun!