Dear God, What on earth is an NFT?
Literally, an acronym for Non-fungible Tokens, it’s a token created on a Blockchain different from conventional cryptocurrencies in the sense that it cannot be replaced or interchanged by another token of the same Blockchain because the purpose is not purely financial transactions like regular cryptocurrencies; rather, the purpose is to attach a unique identity with the token to represent and establish ownership of a digital item and at the same time also enable it to be bought and sold just like regular cryptocurrencies. So in simple terms, earlier you spent cryptocurrencies like Ethereum and BTC only to buy real-world products or services or to pay someone. However, now, you can buy and sell digital items along with proof of ownership; thanks to NFTs.
Wait. What’s the million-dollar news?
These NFTs allow us to buy and sell ownership of unique digital items and keep track of who owns them by storing information on the blockchain. These digital items could be anything digital, including paintings, animated GIFs, music, songs, items in video games, short video clips, landscape, blueprints, and even tweets like Jack Dorsey’s which was sold for a little less than $3 million dollars! An NFT can either be a rare, one-of-a-kind item like a real-life painting, or an individual copy of many, like trading cards, and the Blockchain keeps track of who has ownership of the file. NFTs have been making headlines recently, with some selling for near a million dollars while being put up for auction like the high-profile flying Pop-Tart meme Nyan Cat that sold for about $590,000 in an online auction.
Looks like an expensive Joke?
Ha Ha Ha! Now, this is the part that makes NFTs messy. While some people caught up in the hype treat NFTs like it’s the future of fine art collecting and make NFT Marketplaces another playground for the ultra-rich. Others think of them like Pokémon cards (where they’re accessible to me and you, but still a playground for the ultra-rich).
Guess where you buy or sell NFTs?
The answer is NFT Marketplaces. Just like your regular eCommerce stores, you can buy and sell NFTs here. Popular examples include OpenSea, Rarible, Decentraland, and Nifty Gateway. Among popular Blockchains, are the Ethereum Blockchain which offers ERC 721 / 1155 standard for NFTs as well as Binance Smart Chain with BEP 20 which has quickly risen to popularity due to low fees compared to Ethereum.
These token standards essentially provide ways to store information about the digital item the token is representing as well as its ownership.
If you’re an artist or an entrepreneur, time to become an art-repreneur!
What’s interesting is the opportunity to sell your work that there otherwise might not be much of a market for. Also, it’s time to adapt the digital channel of art-selling other than physical art galleries and museums. Let’s say you come up with a super cool new meme or a digital sticker idea, what would you do? Definitely can’t sell it over the iMessage App Store! Moreover, NFTs allow a royalty feature that you can enjoy. It will pay you a predetermined percentage every time your rare art is sold or switches hands, making sure that if your art gets super popular and appreciates in value, you and your digital wallet is appreciated by the stakeholders as well. Find out more here.
If you’re a buyer or a collector
One of the obvious motivations of buying art is that you have the freedom to financially support your favorite artists, and that’s true with NFTs (which are way cooler than Telegram stickers btw). Buying an NFT usually comes with some basic usage rights, like posting the image online or setting it up as your profile picture. Yes, there’s a part where you can brag about your ownership, with a blockchain entry no one can mess up, to back your claim.
Wondering if you can use it as a store of value like BTC? NFTs can work like other speculative assets out there, where you buy it and cross your fingers, hoping that its value goes up enough to bring you thoughts of selling it.
Where do I get my own NFT Marketplace?
White-label, (popularly white label) solutions are being offered by many companies, with this one especially offering a one-week launch programme to artists and entrepreneurs (at an unbelievably affordable price) interested in onboarding the NFT flight.
Give me a one-liner
No doubt NFTs are a way to invest in and own digital art; whether it’s just another crypto fad or the future of intangible digital items, only time will tell.