NFT is an alien term for many people, although they have seen it circulating on digital platforms for quite a long time now. So what does NFT stand for? NFT is an acronym for “Non-fungible Token.”
What is a non-fungible token, exactly? Cryptocurrencies such as Bitcoin and Ethereum are well-known, but the distinction between them and NFT is that NFT is not fungible.
When we say non-fungible, we’re referring to the fact that NFT can’t be traded like other cryptocurrencies.
For example, you may swap one bitcoin for another, and the value will remain the same, but this is not the case with NFT. Each NFT has a digital signature, which prevents them from being swapped for or equivalent to one another (hence, non-fungible). So when you swap an NFT trade card, you will receive a whole different one.
In much simpler words, an NFT is a digital asset that reflects real-world elements such as art, music, video, and in-game stuff. They’re bought and traded online using cryptocurrency, and they’re usually encoded using the same software as many other cryptos.
An NFT is created, or “minted,” using digital artifacts that represent things like:
- Graphic art
- Videos and sports highlights
- Virtual avatars and video game skins
- Designer sneakers
NFTs are similar to actual collectibles, but they are digital. For example, the customer receives a digital file rather than receiving a real painting to put on the wall.
How does it work?
The NFT holder is an owner of the deed to the digital trade card in a sense, as it is produced on the blockchain and is not substantial (meaning you can’t physically possess it). If the value of the NFT rises, the owner can sell it for a profit.
A “blockchain” is a mechanism in which a record of bitcoin or other cryptocurrency transactions is kept across numerous computers connected in a peer-to-peer network.
They also get the property’s exclusive rights. NFTs can only have a single owner at a time, and their use of blockchain technology simplifies ownership verification and token transfers. In the metadata of an NFT, the creator can additionally store special information. Artists, for instance, can mark their work by signing it in the file.
HISTORY OF NFT
Kevin McCoy and Anil Dash built the first known “NFT,” Quantum, in May 2014. During a live presentation for the Seven on Seven conferences at the New Museum in New York City, McCoy registered the video created by his wife, Jennifer McCoy, on the Namecoin network and sold it to Dash for $4. The technology was dubbed “monetized graphics” by McCoy and Dash.
Three months later, the first NFT project, Etheria, was presented and showcased at DEVCON 1 in London, Ethereum’s inaugural developer conference.
Until March 13, 2021, when revived interest in NFTs ignited a purchasing frenzy, the majority of Etheria’s 457 purchasable and tradable hexagonal tiles went unsold for more than five years. In less than 24 hours, all current and earlier versions of the tiles, each hardcoded to 1 ETH (US $0.43 at the time of introduction), were sold for a total of US $1.4 million.
Who can use NFT and for what?
NFTs provide artists and content providers with a chance to monetize their work. Artists don’t have to rely on galleries or auction houses to sell their art anymore. The artist can sell it straight to them and keep a large chunk of the profit.
Artists can also incorporate royalties into their software to receive a portion of the profit when their work is sold to a new owner. Because most artists do not make more cash after their initial sale, this is a useful feature.
Making money using NFTs isn’t limited to art.
Jack Dorsey, a co-founder of Twitter, sold his first tweet as an NFT for more than $2.9 million.
Brands like Charmin and Taco Bell have auctioned off themed NFT art to raise funds for charity. Charmin dubbed its offering “NFTP” (non-fungible toilet paper), and Taco Bell’s NFT art sold out in minutes, with the highest bids coming in at 1.5 wrapped ether (WETH)—equal to $3,723.83 at the time of writing.
Nyan Cat, a 2011-era GIF of a cat with a pop-tart body, sold for nearly $600,000 in February. And NBA Top Shot generated more than $500 million in sales in late March.
A single LeBron James highlight NFT fetched more than $200,000.
Even celebrities like Snoop Dogg and Lindsay Lohan are jumping on the NFT bandwagon, releasing unique memories, artwork, and moments as securitized NFTs.
Thinking about investing in NFT?
If you plan to collect NFTs, you’ll need a digital wallet that can store both NFTs and cryptocurrencies. You will need to purchase cryptocurrency, such as Ether, depending on what currency your NFT provider accepts.
You can purchase bitcoin using a credit card on platforms like Coinbase, Kraken, eToro, and even PayPal and Robinhood. You’ll be able to transfer it from the exchange to your preferred wallet after that.
Keep costs in mind when you investigate your options. Most exchanges charge at least a part of your transaction when you buy crypto.
POPULAR NFT MARKETPLACES
There are dozens of NFT markets, many of which cater to a specialized sector or specialty. So, what are the most popular NFT marketplaces?
Mintable, supported by billionaire Mark Cuban, co-founder of the successful firm Broadcast.com also renowned as the fanatical owner of the NBA’s Dallas Mavericks and a star of the TV program “Shark Tank.”
The platform also allows creators of all kinds (from photographers to musicians) to mint NFTs to market their work as digital assets.
An ambitious NFT collector or creator must first acquire Ethereum on a crypto exchange, then connect their wallet to Mintable to participate in the marketplace’s bidding and buying.
2 # Nifty Gateway
Nifty Gateway has assisted some of the most well-known digital artists in selling their music, including Beeple and singer/musician Grimes. It’sIt’s an art curation platform sponsored by a bitcoin exchange (controlled by the Winklevoss twins). NFTs, often known as Nifties, are Ethereum-based.
In addition to being a curated platform, Nifty Gateway also hosts any NFTs acquired, which means the NFTs aren’t held in your wallet but rather by Nifty Gateway and Gemini. While this may not suit NFT collectors who like greater freedom in their art investments, Nifty purchases and sales may also be conducted in fiat money (e.g., US dollars) without first purchasing cryptocurrency.
3 # NBA Top Shot Marketplace
With NBA Top Shot, the National Basketball Association and the Women’s National Basketball Association have entered the NFT sphere. In this marketplace, users can purchase video clips and see highlights of collectible moments and art from the world’s major basketball leagues.
The NBA designed it as a closed marketplace using Dapper Labs’ Flow blockchain (you can only purchase and sell on Top Shot). It is simple to sign up for and purchase directly from the Top Shot marketplace website.
NFTs have recently become a popular subject among affluent investors, celebrities, and others. It has also opened up a new channel for artists to consider, in addition to traditional tangible items. It’s like a fresh revolution that will undoubtedly continue to surprise us in the future. I hope this blog was able to enlighten your mind about the principles and fundamentals of NFT!