NFTs Explained

What is NFT Crypto?

NFTs are the latest craze on the internet, and it seems like everyone wants a piece. Here’s how you can create and sell your own using marketplaces like OpenSea or Rarible.

April 6, 2022

NFT stands for a non-fungible token.

It is a token that is used to represent ownership of a specific item. It helps to tokenize everything: starting from toilet papers to artwork masterpieces. All the records are stored in the blockchain Ethereum, which provides complete security for each of them. Nobody can modify any record of the blockchain.

In order to fully understand the meaning of NFTs, we need to understand the term “non-fungible”. If something is non-fungible, it can’t be interchanged with something else, because it has unique features. On the other hand, fungible items don’t have any unique features and only their value defines them. So they can be exchanged.

The difference between NFT and Cryptocurrency

It’s easy to immediately think about the similarity between NFTs and Cryptocurrencies. But they don’t have much alike. NFT is are built using the same kind of programming as Ethereum or Bitcoin. This is the only similarity they have.

We all know that physical money is changeable as cryptocurrency. This means that $5 is always equal to $5 and 5 bitcoin is always equal to 5 bitcoin. That is one of the reasons why people trust cryptocurrency. But this isn’t the case with NFTs.

Here is the difference between an NFT and Cryptocurrency. As we have already mentioned, NFT can’t be exchanged with anything. For example, we can’t exchange Beeple’s Ocean Front with Edward Snowden’s Stay Free. We can’t even exchange Beeple’s one work with another work. So this is the exact non-fungibility.

Usability of NFTs

NFTs have become popular since 2020, although they have been around since 2014. The reason is digital artwork.

Blockchains and NFTs give artists an amazing opportunity to have their works exhibited without any art galleries or auction houses. Blockchain is a method for them to sell their fares directly to the consumer. In this case, they can keep more of the profit. Artists can also make a profit from royalties. They can program in it so they will receive a certain percentage every time their work is resold to another person. This is a great opportunity for them as mainly artists don’t get future proceeds after their work is first sold.

Art is just one of the ways to make a profit with NFTs though. Charmin, a brand of toilet paper, is selling its own toilet paper NFTs. Another famous brand, Taco Bell, was the first fast-food chain to join the NFT hype. All these NFTs were made to raise funds for charity.

How to Buy an NFT

If you want to have an NFT Collection, you need to know some key things.

The first step to buy your first NFT is a digital wallet. You need to have a digital wallet and buy some cryptocurrencies of the type your NTF provider accepts. You can buy crypto on Platforms such as Kraken, Coinbase, eToro, and even Robinhood and PayPal.

Where to Buy an NFT

If you have already set your wallet, let’s see where you can buy NFTs. Here are the most popular NFT marketplaces to date:

OpenSea.io – OpenSea is the largest NFT marketplace in the world. It’s a peer-to-peer platform for NFTs. Here you can find rare digital items and crypto collectibles.

Rarible – Just like OpenSea, Rarible is an open marketplace that lets artists create and sell NFTs secured with blockchain.

Foundation – Foundation is a little bit different from OpenSea and Rarible. Here you need to have a special invitation from the creators or upvotes to post your art. This community has the most popular and talented artists, that’s why it is so exclusive. Among the creators who sold NFTs on this marketplace are Pak, Kevin Roose, Jack Butcher, and so on.

Although these platforms are used by thousands of creators and artists, make good research before buying anything. There are a lot of impersonators who are selling an artist’s piece of work without his permission.

Is it Worth Buying an NFT?

There is no correct answer to this question. Nobody can assure you anything about NFT, because it doesn’t have a long history and people can’t judge its performance. The only thing we know for sure is that NFT’s future is unpredictable. So if you want to invest in NFTs, it must be your own decision. If you have the money to invest, then you can buy something, especially if that piece is important to you.

You need to understand that the price of the NFT mainly depends on the person who is willing to buy it. This means that after buying something you may not be able to resell it with a higher or similar price. There is even a risk of not selling it at all. Or of selling it for 10 times as much. Clearly, it’s not so straightforward.

The conclusion is that you need to approach NFTs just like other investments. You need to do your due research, understand all the risks and if after that, you decide to invest, then do it with no doubt.