The goal of this review is to teach newcomers to the crypto world the basics of NFTs which stands for Non-Fungible Tokens. This will also act as a simple guide to teach those interested in the following;
- How to fund a Metamask wallet with Ethereum in order to purchase NFTS
- The most successful NFTs to purchase, trade, and invest in currently
- How to choose the most suitable marketplace
- How NFTs work.
NFTs are now the new conversation piece among cryptocurrency elites and even celebs since their launch in the year 2021.
Some collectors may fancy collecting art, cars, stamps, rare coins, etc but NFT is now seen as an additional type of collectible asset in this digital world we live in.
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HOW ARE NFTS CREATED?
NFTs are created either on an NFT marketplace or on a crypto exchange platform that accommodates the minting of NFTs. After NFTs are created they can be stored on any blockchain that supports them e.g Ethereum network which is the most popular blockchain, then there is Tezos and also Flow.
The first step in creating an NFT is to decide on what you want to create and your creation must be completely unique with the potential to be sold e.g audio, digital art, etc. The value of your NFT will depend on its uniqueness.
The second step is to identify the best and most appropriate blockchain to store your NFT. The advantage is that the blockchain will safely and permanently record your NFT.
The third step will require you to create your NFT wallet which is essentially a digital wallet that is supported by the blockchain you would have chosen.
Determine your NFT platform e.g Crypto exchanges, OpenSea, Solanart, etc, you will not only be able to create your NFT here but also sell it in the future.
Create your NFT by opening your NFT platform and connecting your wallet. After this is done, select the menu to Create your NFT.
You will then need to upload your media file or link it to an external media file.
Create a name and description for your NFT and decide on the quantity.
Click on the blockchain that you would have decided on earlier and then go ahead and create your NFT.
You can now upload and list your NFT for sale and by doing so the metadata becomes permanent.
Make your NFT available for purchase, and add the price and the length of time in which it will be up for sale.
While the ownership and authenticity of an NFT can be easily traced and verified the individual or company who owns the NFT remains anonymous.
HOW DO NFTS WORK?
Just like an original piece of art, NFTs can only have one owner at a time. The owners of these valuable assets store them in what is called a “blockchain”, which is simply a computerized method where several computers are linked to each other to keep track of transactions. This system is widely popular amongst cryptocurrency enthusiasts because crypto utilizes the same technology.
There are a number of blockchains that supports NFTs like Ethereum, WAX, Binance Smart Chain, Solana, Tron, and many others. NFTs are digital/intangible assets so for this reason, the buyer will receive a digital product and not something that they can actually touch. Nevertheless, even though NFTs are intangible the individual/s who is making the purchase will obtain the sole rights to this digital product.
The metadata pertaining to a particular NFT is very specific and this makes it easy for NFT to be traced back to its original creator, and to also be traded on the digital market.
The holder of an NFT has the advantage of conserving distinct information in their metadata. We have created a beginner’s guide to explain what are NFTs and to teach users how to avoid NFT scams.
HIGHEST PAID NFTS
Now you must be wondering what the top NFT tokens sold to date cost, well expect the highest, the numbers will still leave you surprised.
Everyday: The First 5000 Days
The American artist graphics designer, digital artist, and animator Mike Winklemann aka Beeple are one of the most popular sellers of NFTs on 11 March sold one of his NFTs via auction, for a whopping $69 million dollars at Christie’s which goes down in history as being the largest sum ever paid for an NFT. Mr. Winklemann is now third on the list of the World’s most valuable living artists.
Highest paid tweet
The most valuable tweet to ever exist was that created by Jack Dorsey which is worth over $2.9 million. However, it does not just stop there with Mr. Winklemann and Mr. Dorsey, let’s take a look at several other examples of expensive NFTs that were ever sold;
- Hashmasks was sold for $16 million,
- Doge NFT was sold for $4 million,
- Grimes sold a collection of NFT for $6 million.
- Rick and Morty sold their NFT for $1.6 million.
- Crossroads NFT sold for $6.6 million.
- 7804, CryptoPunks was sold for $7.5 million.
- The Genesis NFT was sold for $1.5 million.
- The World Wide Web’s source code was sold for $5.4 million.
WHERE TO BUY NFTS
If you are interested in sourcing NFTs you can do so on several NFT trading platforms or marketplaces like Opensea, Rarible, NBA Top Shot, Nifty Gateway, etc. Make sure to do your own research to be able to choose the platform that best suits you. NFTs can be auctioned, directly purchased, or traded using cryptocurrency as a means of payment.
At Foundation Marketplace art enthusiasts have the opportunity to either collect art or create and sell their work. For those art collectors looking to make a purchase on this platform, bear in mind that you will need the cryptocurrency Ethereum in order to do so.
Nifty Gateway Marketplace is mostly geared toward the rich and famous where NFTs can cost as much as $91.8 million US dollars. This platform does accept payment by credit card and would be a great choice for big investors.
At OpenSea there is something for every collector, from music, art, and virtual worlds to trading cards, you name it and OpenSea has it. Hence it is not only one of the oldest but also one of the biggest NFT marketplaces in the industry and it continues to grow. Several cryptocurrencies e.g Solana, Ethereum, and USDC are accepted at OpenSea but the traditional dollar is not accepted.
Rarible is another NFT marketplace stocked with a range of valuables such as art, video games, memes, etc. As a member, you are rewarded with a RARI token which gives you the opportunity to place votes on various decision-making processes taking place in the company. The cryptocurrencies accepted here are Flow, Ethereum, and Tezos.
Those interested can also download NFT apps for most of the marketplaces. These apps are compatible with iOS and Android devices.
Best marketplaces for buying NFTs
- Async Art
WHAT IS THE FUTURE OF NFTS?
When it comes to the world of cryptocurrencies and blockchain technology, things can be quite messy and NFTs have become a part of that mess five years ago. According to DappRadar, they estimate 85,787 new NFTs being bought each day in May, totaling a whopping $5.8 million. Cryptocurrency has changed everything, and there are many who believe that non-fungible tokens will soon be the new norm.
NFT boom and will the bubble burst
An NFT is a digital asset that allows you to own and exchange digital items, such as a virtual house in a virtual environment or a unique helmet in a video game. Tangible assets are those that can be perceived through touch, generally speaking, NFTs are intangible, but it is possible for them to be in the form of a hybrid too.
Non-fungible tokens are an excellent way to enhance your business and make it more efficient. They will save you more time and a lot of headaches,e.g NFTs are stored on a blockchain which is a digital ledger that does not require a central server. Transactions are verified faster and simpler – this is what makes them so useful for business.
Secondly, the blockchain keeps a record of all the transactions pertaining to your NFT. This means that, when it comes to art sales, buyers can trace back the origin of their painting all the way to the artist who created it.
Smart contracts are a concept used in creating blockchain-based NFTs. In a smart contract the rules are voluntary but at the same time cannot be neglected.
There is always the possibility for the NFT hype to fade within a short space of time, however, if stakeholders can see the probability of this resource being applied in a diverse number of ways, then there will be steady organic growth for the NFT Market. When this happens the possibilities of being able to apply NFTs to both tangible and intangible assets are limitless.
POTENTIAL USES OF NFTS
NFT use is now being extended well beyond its conventional frontier of simply trading games, artwork, and short videos, popular social media platforms such as Facebook and Instagram is now capitalizing on the use of this technology by offering users the opportunity to create and sell this valuable asset.
Now let us take a look at how NFT has extended its branches into various sectors of the industry:
The authenticity of a product
The purpose of a blockchain is to permanently record the origins of a digital product while NFTs guarantees the authenticity of that product. In theory, it is possible for NFTs to play an important role when it comes to consumable goods, in this case even the ingredients used during the manufacturing process can be traced thus deterring manufacturers from making fraudulent claims.
Proof of ownership in real estate matters
NFTs could be great for proving ownership of property, and their technology could be applied to land transactions if done properly. The authorities involved will be able to closely follow all future undertakings related to the property in the process of time.
Documenting the medical records
Before an NFT is added to a blockchain, it has to be thoroughly processed to ensure that it is legitimate and unique. For this reason, this technology can be applied when preparing medical records so that they can be safe as well as accurate.
It is also possible to create NFT birth certificates and store them on a blockchain.
Protecting the IP Rights
NFTs are immutable assets, this is an advantage because it is nearly impossible for it to be altered in any way, shape, or form, which makes it the perfect solution for those who desire to preserve IP rights to their product.
Recording the academic achievements
In the not-so-distant future, we can expect to see NFTs being implemented for record-keeping at colleges and universities. We can expect to see academic achievements awarded in the form of NFT tokens as proof that an individual completed their academic obligations within a specific period.
NFTS AS PROOF OF IDENTITY
Many countries are starting to take advantage of all the benefits NFTs and blockchain technology has to offer and it is not difficult to envision the role NFTs will play in the future during elections. A large percentage of the population in several countries is unable to vote because they do not possess a copy of a valid form of identification or any other important document necessary to allow them to vote.
Digital Identification is the solution to this problem and this is where NFTs can come to the rescue. Even voting fraud can possibly be eliminated if all official votes are recorded.
HOW DO NFTS IMPACT CLIMATE CHANGE?
Ethereum’s blockchain network is utilized for the ‘proof-of-work’ aspect in Non-Fungible Token transactions, which can be very energy intensive. This is because buyers need to use Ethereum to make their purchases.
In addition, there are four stages in NFT transactions; minting, bidding, selling, and transferring. It is estimated that approximately 332kWh of energy is required to mint one NFT on Ethereum, which means that a high number of NFT transactions equals a high quantity of energy being used and increased environmental pollution.
However, with more NFT transactions there is increased demand for Ethereum which will increase its value, and also in order to mine Ethereum there will be a need for more machines. With more machines working there is the problem of further environmental contamination. Likewise, when the crypto price rises, more people are incentivized to mine BTC, and thus there is a higher chance that they will use more NFT to power their mining rigs.
Despite the list of pros surrounding NFTs, many have raised concerns about the negative effects of NFT transactions on the environment. This is why these companies that endorse NFT are looking for a consensus algorithm or mining model to reduce these massive carbon emissions.
One way Ethereum plans to save energy is by substituting the proof-of-work consensus model with a proof-of-stake mechanism, where users are paid in proportion to how much of the currency they already own. This will save a great amount of energy, while also distributing coins fairly.
The PoS model is easier to solve and does not demand as many resources as the previous one. There will be less of an environmental impact when NFTs are used because they do not utilize as much energy when they verify tasks as people or miners do.
Moreover, the PoS system is transparent, because it leaves a data trail. The most important advantage of Ethereum 2.0 is its environmental friendliness: using the PoS method reduces Ethereum’s energy consumption.
WHAT IS THE BEST WAY TO SELL NFTS?
There are two ways in which NFTs can be sold one is by trading an NFT you would have obtained and the second way is by creating an NFT on your own and then selling it.
Charges are incurred to both mint and sell NFTs. These fees are charged in order to cover marketplace services and petrol costs.
- How to Sell an NFT You Purchased?
It is always possible to resell anything of value on the secondary market and NFTs are no different.
Transfer the NFT you wish to sell into your crypto wallet and list it for sale on the marketplace of your choice. You can choose to sell your NFT for a higher price than the one you obtained it for. However, it must be said that the rise and fall of prices for NFTs are unpredictable.
- How do you sell an NFT You Created?
Selling an NFT that you put a lot of effort into creating is not difficult at all. After minting your digital product there are a few things you can do, either click the option to “Buy Now” or set it up for an auction in which case you will reserve the price. There are instances in which you can be paid what is called NFT royalties every time your NFT is purchased by a new buyer.
ELON MUSK ENTERED THE NFT GAME, AND OTHER CELEBS TOO
In the year 2021, the month of February to be exact, Dapp Radar made it known that the NFT markets had grown to $342 million in trading volume. This means that the NFT market in only one year had tripled in value, and it would appear that it is continuing to grow as more people worldwide begin to discover the great advantages this digital asset holds.
Mike Winkelmann’s sale of a $6.6 million NFT on February 22 at Christie’s auction certainly made a huge impact leaving celebs with no other choice but to dive into a variety of groundbreaking deals.
It may come as no surprise that even the world’s richest business magnate and investor with a Net Worth of more than $200 billion, Elon Musk, is a part of the NFT industry. He once again caught the attention of millions around the globe by selling an NFT token, which is in actuality a techno music with the lines “NFT for your vanity, it’s verified, it’s guaranteed, computers never sleep”. The NFT features a golden trophy with two hands under a globe and the words “ NFT” at the top, “Trophy Vanity” and “HODL,” and “computers never sleep”.
This business magnate has always had a history of buying crypto, and one record of this is when Tesla purchased $1.5 billion worth of Bitcoin with his blessings. He is also known for his tweets about cryptocurrencies such as Dogecoin, which is a cryptocurrency that started out as a joke.
Then there is the socialite Paris Hilton who allegedly took the advice of Kim Dotcom a tech entrepreneur, and shared with the world via Twitter that Following the suggestion of tech entrepreneur Kim Dotcom, she tweeted that she was excited to release her first NFT.
However, this is not the first NFT published by the celebrity because she produced one last year, which was a drawing of her pet, and it was sold for $17,000 with the proceeds going to charity.
The artist that goes by the stage name Grimes and ex-girlfriend of Elon Musk also made millions by selling collaboration NFTs on Nifty Gateway in only 20 minutes.
The singer’s brother, Mac Boucher collaborated with her to create ‘WarNymph,’ our collection of 10 NFTs.The graphics in this NFT are unmistakably Grimesian. There are winged babies with javelins, tattoos, and elven ears in a bleak universe that the artist says are part of her upcoming world tour. Plus, snippets of future songs called “enter the void” can be found on these collectibles.
Snoop Dogg announced his latest work where he offers tokens and other collectibles to remember his early memories. The NFT collection is titled “A Journey with the Dog”, and there is also an original track named “NFT”. He has also included “Snoop Dogge Coins” as a part of the collection.
Shawn Mendes has collaborated with an avatar tech company called Genies that makes digital cartoons NFT OpenSea, marketplace. The collectibles feature NFT artworks of Mendes’ guitar, a signed t-shirt, a vest, and a gold ring, all worth approximately $10 million dollars.
- NFT is the abbreviation for “Non-fungible tokens”. The word Fungible simply means that something can be replaced by another item that is identical.
- NFT is used to authenticate and certify ownership of both physical and digital assets.
- NFTs are created either on an NFT marketplace or on a crypto exchange platform that accommodates the minting of NFTs.
- Just like an original piece of art, NFTs can only have one owner at a time.
In conclusion, there are many different forms of NFTs including art, music, and other collectibles. The most well-known digital artists, such as Beeples, Mike Greg, and Jon Noorlander have been drawn to these types of tokens and have amassed a fortune from selling them.
In addition, the NASDAQ-listed media company Score Media has also been catching on to the trend of promoting NFTs in their weekly broadcast, referred to as Mint Condition
By purchasing valuable NFTs, there is a chance that you can make a lot of money reselling them. The best tokens to buy are those that are expected to increase in value. Learning how to do this is important if you want to make a purchase to increase your net worth.