The digital economy is experiencing a whopping amount of trends coming along. Top among them are non-fungible tokens that have done some fundamental reshaping to different industries and are still a hot topic. To find out what’s all the fuss about, you’ll need some quick and essential insights into what NFTs are.
In a nutshell, non-fungible tokens are digital assets that are secured by cryptography. These blockchain-based cryptographic assets, however, cannot be exchanged equivalently like other fungible tokens.
Before joining the NFT craze, make sure you have all the info to get you up to speed.
What Is NFT?
NFTs are non-fungible tokens that have a specific identifier to separate them from one another. While homogeneous and fungible tokens can be easily exchanged for one another, NFTs cannot be traded or exchanged in the same way. Non-fungibility is among the main reasons behind the buzz around NFTs, tying them up with the concepts of authenticity and ownership.
Every NFT has a digital signature, which makes each of them unique. These digital assets can be everything from images to films, audio data, or any other digital material. Artwork, comic books, sports memorabilia, trading cards, games, and other items are also examples of NFT.
Simply put, the essence is that Instead of a tangible physical item, as an owner, you receive a digital version of it.
While having Full Ownership Rights for every NFT collection is a matter of controversy, they can only have one owner at a time. Blockchain technology makes it simple to verify ownership and transfer tokens between owners. Usually, Creators provide copyright info using CC (Creative Comments). In most cases, You can find this information either on the Collection/Project website or in their NFT Collection Description. The creator can additionally store certain information in the metadata of an NFT. Artists, for example, can mark their work by inserting their signature in the file.
How Do NFTs work?
The value of NFTs is usually set by the standards of the market, which can change depending on its supply and demand. Like physical items, the tokens can be bought and sold on open NFT marketplaces. Their main essence is to bring together buyers and sellers, simplifying the process.
Why Are NFTs So Popular?
Non-fungible tokens (NFT) have become extremely famous among crypto consumers and businesses alike. Here’re some of the reasons behind its surging popularity:
Given their distinct properties, NFTs are frequently seen as a potential investment. As NFTs can be worth more than any of the cryptocurrencies used to purchase, they are an appealing target for investments.
NFTs provide new possibilities for people to communicate, trade, and own a business online. NFTs enable "uniqueness" in the digital realm. And this opens up an infinite number of new possibilities.
A great number of industries already make good use of NFTs: Musicians can now keep ownership of their music and get compensation each time their tune is resold. Through selling NFTs, creators may offer perks for their followers, such as front-row seats to performances and beyond.
NFT Highlights Timeline
While there’s no denying that, at the moment, the future of NFTs looks bright, some credit should be given to some quick NFT history highlights as well.
Being built on top of the Bitcoin network Colored Coins were the closest thing we got to an NFT back in 2012. Their mission was basically to set some Bitcoin coins apart from others. While still fungible cryptocurrencies, they enable the process of “coloring” the coins. It implies adding new elements besides the monetary value to separate certain coins from the rest.
Kevin McCoy is the name you’ll hear a lot while getting to the roots of digital assets. Back in 2014, he minted “Quantum”, the (arguably) very first NFT on NameCoin.
Things to know about the very first NFT:
- It was an Octagon-shaped animation
- It was sold for $1.47 million via Sotheby’s in 2021
- There was a lawsuit over the ownership disputes
- The legal proceeding is still pending
Before the whole craze over the NFTs' popularization on Ethereum, Counterparty was the platform to get all the credit. It was originally built atop the Bitcoin network to enable minting, buying, and selling digital assets. Using Bitcoin technology, Counterparty enables verifiable ownership of digital assets.
Other notable chronological developments of the NFT space include:
- Memes start being minted as NFTs
- NFTs Shift to Ethereum
- Token standards are being introduced
- CryptoPunks NFT collection goes viral
- CryptoKitties and MoonCats come along
- NFT gaming x Metaverse (Decentraland that uses native MANA token as an in-game currency has been introduced)
- Prestigious auction houses start selling NFT art
- Beeple’s NFT is sold for a record-breaking price
- Demand for NFTs surges in the Metaverse
- Facebook rebrands as Meta and moves into the metaverse
How to Buy an NFT?
Although different countries have different regulations regarding NFTs or Crypto, they are accessible worldwide. If you’re interested in owning one, here’s how the process goes:
Choose the Platform
There are several popular NFT marketplaces out there, including ftNFT, Opensea, and SuperRare, where you can find and buy your favorite NFT.
Because these platforms have some differences in their features, you should first understand which Marketplace resonates with your expectations the most. The platform's security, transparency, 24/7 customer support, and user-friendliness are some characteristics to consider.
Additionally, if you are in Dubai, you can visit the first-ever phygital NFT Store and get the NFT right from the shop. The shop even has a 3D scanner to make your 3D Avatar and provide a completely new experience that you’ve never seen in the NFT space.
Create an Account
The process may differ depending on the platform you opt for. On some Marketplaces, you need to create an account, on others, you just need to create a Crypto Wallet and connect it to the marketplace. With the crypto wallet option—the user needs to be sure that the crypto wallet he’s creating supports the blockchain that Marketplace operates on. There are also many multi-chain wallets (with Phantom Wallet, for example, you can have both Solana and Ethereum NFTs in one wallet).
If it comes down to creating an account you will be required to fill out personal information, such as email address, name, surname, etc.
Having a Crypto wallet is another crucial step when purchasing an NFT. This is simply because you need to have money to buy the NFT. While some marketplaces will also provide you with a wallet when registering, others might ask you to create a separate digital wallet. Depositing the wallet according to the Marketplace's offers and requirements is the last step in this process.
Choose Your NFT
After completing all the mentioned steps, choose an NFT that clicks with you the most. It’s best to start by doing a little homework on the digital assets you’re about to own. Get as many insights into it as possible, from the creator to the community and the project itself—look at who stands behind the project, the creator, the seller's verification, and more.
Twitter and Discord scrolling might also help you keep in line with the latest NFT drops.
NFTs are the future of digital collectibles, but they're also much more than that. They can be used to invest in projects, purchase goods and services online, or even be traded for other cryptocurrencies. Once you get the hang of the concept, always keep your finger on the pulse of the industry, as NFTs are constantly evolving, bringing more excitement and opportunities.
NFTs are still emerging and evolving assets. Any insights provided in the above material should not be perceived as investment or financial piece of advice. Do your in-depth research to make informed decisions on performing any action with NFTs.