Is NFT, the new gold? Understanding the concept and how it works
“Sell your work as an NFT,” whether it’s in the form of arts, film, sound, or gaming, is a piece of advice that every creative person who utilises social media has heard at least once. You’ll see things like “I just sold my first NFT” if you scroll through your favourite social media platform, particularly Twitter. This thus brings us to the questions of, what exactly is NFT, how it works, what I can sell as an NFT, and how do I sell my NFT and earn from it?
What is NFT?
NFT simply means Non-fungible token. Most NFTs are part of the Ethereum blockchain and have been around as early as 2012 when the concept of Bitcoin Colored Coins first emerged. Confused? Calm down, stay with me, I will make everything clearer as you keep reading. If something is described as “non-fungible,” it implies that it is more or less unique and therefore cannot be replaced. A bitcoin, for example, is fungible since it can be exchanged for another bitcoin and you’ll get the same thing. A one-of-a-kind trade card, on the other hand, cannot be recreated. You’d get something entirely different if you swapped it for a different card.
To further explain what this concept is all about, BBC news defined NFTs as “one-of-a-kind” assets in the digital world that may be purchased and sold like any other piece of property, but which have no tangible form of their own. The digital tokens might be compared to ownership certificates for virtual or actual assets.
To be more specific, a creator can easily prove the existence and ownership of digital assets in the form of movies, photographs, arts, event tickets, and so on by leveraging NFTs on smart contracts (in Ethereum). Additionally, the creator can receive royalties for each successful trade on any NFT market or through peer-to-peer trading. The monthly sales of digital tokens “hover” at roughly $2 billion, according to JPMorgan analysts. The overall market capitalization of the NFT universe was assessed to be $7 billion by analysts.
Ever wondered what the record for the most expensive NFT ever sold is? Well, ‘Everydays by Beeple’, a digital collage that sold for $69 million at Christie’s auction in March. Then there’s the instance of the $532 million NFT that was sold in October.
How does NFT work?
NFTs, like cryptocurrencies, are purchased and exchanged on specialised platforms, according to mint. The most well-known NFT marketplace is OpenSea. With over 5.3 million transactions to date, the NFT market is estimated to reach $1.3 billion by the end of 2021.
A sale does not always imply the transfer of the token’s described object. For example, NFTs of well-known paintings have been sold, but the buyer does not receive the picture. The certificate of ownership of the NFT, which is registered on the blockchain, is what changes hands. The certificate must be stored in a digital wallet, which can come in a variety of formats. Metamask, a free internet browser plugin, or a secure physical device can be used to access the wallet. It could also be as simple as a printed code on a piece of paper. To acquire an NFT, the wallet must have enough of the necessary cryptocurrency — for example, if the person is buying a token on the Ethereum blockchain, the wallet must have enough ethereum (ETH).
NFTs have a few unique characteristics:
1. Each token has a unique identifier connected to a single Ethereum address.
2. They are not replaceable 1:1 with other tokens. One ETH, for example, is identical to another ETH. With NFTs, this isn’t the case.
3. Each token has a unique owner whose identity can be easily verified.
4. They are based on Ethereum and can be purchased and sold on any Ethereum-based NFT exchange.
5. No one can manipulate it in any way.
6. You can sell it, and in some cases, this will earn the original creator resale royalties Or, you can hold it forever, resting comfortably knowing your wallet secures your asset on Ethereum.
What can I sell as an NFT?
Well, before I let the cat out of the bag, I will advise you to go drink water, relax and continue reading. Have you done that? What if I told you that almost anything could be sold as an NFT? Don’t you believe me? Keep reading.
According to Ethereum’s website Digital Art: which includes GIFs, Collectibles (e.g. digital trading cards), Music, Videos, Virtual items within video games such as skins, virtual currency, weapons and avatars, Virtual land and Video footage of iconic sporting moments etc. Some of which have been sold for thousands of dollars.
Real-World Items such as Deeds to a car, Tickets to a real-world event, Tokenized invoices from real estate and cars to racehorses and designer sneakers, Legal documents and Signatures can also be sold as NFTs.
How do I sell my NFT and earn from it?
According to Nerd wallet, there are two ways to sell NFTs: 1. trading an NFT you’ve previously purchased and 2. selling an NFT you’ve created. There will be fees associated with selling a non-fungible token, just as there will be fees associated with minting an NFT. This will cover gas fees and marketplace-determined final sale service fees.
- How to sell an NFT you’ve purchased:
NFTs can be resold on the secondary market in the same way that any other asset can. To do so, ensure the NFT is in your crypto wallet and listed for sale on your preferred marketplace. While the value of your NFT may increase over time, the long-term or even short-term worth of NFTs cannot be guaranteed. - How to sell a newly minted NFT
This will most likely be the finish point of the creation, or minting, process on whatever platform you’re utilising. Depending on the service, you can either set the ‘Buy Now’ price or specify the auction rules, such as the reserve price. In some situations, royalties may be paid each time your NFT is sold in the future.
If you have ever considered selling your work as an NFT but have been too scared, this post is a wake-up call not to be left out of the moving train.
Enjoyed this post? Never miss out on future posts by following us.»
