NFT’s for beginners
NFT’s, or ‘non-fungible tokens’, have been big news for a while now. The blockchain supported crypto art phenomenon kicked off in 2014 when the token ‘Quantum’ was created. A memorizing piece of work by digital artist Kevin McCoy, today the unique work is valued at seven million dollars.
Wait, what? That’s right, NFTs can be worth astounding amounts of money. As we look further, we shall see why and how this came to be.
A Beginners Guide To NFTs
So that’s how long they have been around, but what are they? Well, a big part of NFTs is their essential uniqueness.
In the same way that big-time art collectors buy original pieces and not prints or reproductions, an NFTs essential value is down to its ‘non-fungibleness’. This means it is a one-off and cannot be replaced by another copy or broken down into smaller parts.
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A dollar bill is fungible as it could be replaced by another one and have the same value.
How To Buy NFTs
NFTs are bought and sold on a marketplace. While the first sale might be a little intimidating for a first-timer, the process itself is not all that complicated The first step is to purchase some cryptocurrency. Many NFTs are traded with the cryptocurrency Ethereum.
You should then sign up for a crypto wallet and transfer your funds into there.
You can then look at a marketplace for NFTs and decide on what to buy. Once you have selected what you want to buy, a confirmation window will appear for you to click on. A proceed to payment option will then be visible and you can complete the transaction.
The NFT will then be transferred into your cryptocurrency address and will be yours.
What Makes It Unique?
In the world of cryptocurrencies, there are fungible and non-fungible tokens that are used to link to a digital file. Something like Bitcoin is a fungible token. This means one Bitcoin could be transferred to someone else and then sent back and it would be like sending a dollar back and forth. The coin unit is not unique, it is just another monetary amount.
The same is not true of NFTs. NFTs contain verifiable details of ownership and authenticity to make it impossible to share or break down.
It is this that makes them provably unique and one-of-a-kind. The unique element in NFTs are digital assets with identifying information sometimes known as smart contracts. The information found in these smart contracts is then linked to the token’s blockchain.
NFTs can be used in association with collectibles, digital and traditional artwork, music, video and music.
The Monetary Value Of NFTs
Some of the sums surrounding NFTs are staggering. In 2021 the digital artist Beeple sold an NFT of his work for $69 million. The work was the first NFT to be up for sale at the famous auction house Christie’s.
The sale underlined the popularity of NFTs and gave rise to many conversations about what makes an artwork unique or authentic.
The interesting concept of authenticity is factored into the world of NFTs. While a digital file could feasibly be copied and shared millions of times, the essential identifying information of ownership would be lacking.
It is only the token that bestows the uniqueness and authenticity that collectors go for. It is like collectors bidding for an original artwork, or a unique first edition of a book.
How Are NFTs Valued?
Technically speaking anyone can make an NFT. All you need to do is produce something unique, select what blockchain to use and then put it on an NFT marketplace. You can then set a fixed price or put it on auction.
Not all NFTs will make much money or even sell. There are millions of digital assets on sale right now that may never be exchanged.
The value of popular NFTs often comes down to their rarity and celebrity status. Some NFTs are only available for a limited run, which can also increase their value. Original content is highly prized in the NFT world as well. Something creatively different will add more value to the NFT.
What NFTs Are Available?
Digital art is the biggest part of the NFT world, but lately other areas have been getting involved. Sports fans can now find signed autographs of their favourite stars to collect and keep.
As the world of NFTs moves on, more and more items from every sphere of creativity will be added. Anything can get minted as an NFT and put up for sale. Memes, games, and literally anything else that can be digitized and authenticated might appear on a marketplace soon.
