Information technology never ceases to amaze us with discoveries and phenomena. Most of them we do not perceive and do not understand. Thus, the popular NFT today has become a real mainstream. People are trading some kind of pictures, NFT sneakers, earning crazy money on it. What kind of closed club is this, why and how did it appear, and what is the reason for its phenomenon?
I must say that, like everything new, NFT was initially treated with skepticism – how many of these “breakthrough” technologies turned out to be one day? But gradually interest in this topic did not fade away but expanded even more. More and more people are interested in fashion technology and more and more of those who earn money with it. So what is NFT, how does it work, and how can you create your sample?
What is NFT?
NFT or non-fungible token is a non-fungible token. It is based on blockchain technology, which distributes information to many computers. NFT is a kind of art object, accompanied by a certificate confirming the authenticity of the author and the ownership of the object by him. NFT is different from a simple picture that you can take a screenshot of anywhere on your computer. It also takes into account the digital right of the author to own the object, which makes it possible to sell it on trading floors, for a lot of money, by the way.
Is NFT the same cryptocurrency like Bitcoin?
These terms are completely different. Cryptocurrencies are virtual money. You can exchange them one for another, there is a dynamic peg rate to other currencies, including traditional ones. These tokens are fungible while NFTs are unique. You can’t take one picture and just replace it with another. For example, in a museum, no one will let you change the portrait of a famous artist for your handicraft – they will immediately notice the difference. This “difference” is determined by the digital drink in the token. At its core, NFT uses the Ethereum blockchain, a popular cryptocurrency. This makes NFTs quite portable, making it difficult to manipulate the digital signature. This cryptocurrency itself is quite stable.
Where did NFTs come from?
And although this concept is fashionable today, it appeared back in 2012. Then an article was published by Meni Rosenfeld, which talked about “colored coins” based on the Bitcoin blockchain. Whoever owns the “coins” also owns certain assets. They were all the same bitcoins, but with a certain label. However, the limitations of the technology prevented the concept from being realized. The first NFT is believed to have appeared in 2014. Kevin McCoy has created a unique creation “Quantum”.
“Quantum” by Kevin McCoy
It was later sold at Sotheby’s for $1.4 million.
How did NFT become popular?
The development of NFT since 2014 is closely related to the development of the Ethereum blockchain. And some projects were large-scale. An example would be Cryptopunks, a collection of 10,000 limited NFT tokens created by Canadians John Watkins and Matt Hall. Another story is the CryptoKitties game about virtual cats, which can then be sold using the blockchain. These projects were fairly well covered by the press, which caused an increased interest in the NFT. Soon, special platforms and games began to appear that helped create and distribute these tokens. It is understood that there will be a whole audience of connoisseurs and collectors of such art, who will collect and resell unique NFTs. Auctions will appear for them, and the most original collections will soar in price.
How to create and sell NFTs?
Anyone, even a child, can become an NFT author. Yes, and the content has no restrictions – it can be a simple picture drawn in a primitive editor, a movie you shot, a website created, etc. All they need is uniqueness. To place your product, you need to go to one of the popular marketplaces: OpenSea, Rarible, SuperRare, VIV3, or others.
The first and obvious step is registration. After it, you will need to replenish your wallet with cryptocurrency to pay a commission to the marketplace. Taking into account the exchange rate, it is usually a few dollars. So you will have to create an additional wallet for the currency and then purchase it. The simplest and most logical option is ETH (Ether) since it is he who is the basis of the open blockchain. So you will also have to go to the crypto-exchange, register there, verify and acquire the required amount of funds. Now the wallet must be linked to your account on the NFT marketplace.
The next step is to upload your creation. Click the button “Create” (Create) and download your future NFT in graphic, video, or audio format (PNG, GIF, WEBP, MP4, MP3). You can present it as one lot, or divide it into several parts. And don’t forget to add a “selling” description. You also need to choose the format of the sale, it can be either a fixed price tag or an auction, moreover, with a certain lifetime or infinite, until the required price is reached. At the same time, you need to be reasonable about the pricing of your NFT. Its low price may be comparable to the commission, and its high price will scare away customers.
Now it remains only to wait for collectors who, among all competitors, will be able to consider and evaluate your creation. The more popular you become, the more you can sell your work.
How to buy NFTs?
The buyer only needs to have money on his crypto wallet and the desire to purchase the lot he likes. Of course, you will need to log in to the marketplace. The commission for transferring funds from your wallet to the seller’s wallet is usually paid by him.
After the transaction is completed, you will become the owner of a unique non-fungible token. Do what you want with it – share on social networks, advertise and distribute, and sell if necessary. In many social networks, it became possible to introduce NFTs as avatars and create posts with them. Cool NFTs are created even by little-known authors who are happy to part with their creations for money.
What is the future of NFTs?
The creation of NFT collections is no longer done by individuals, but by entire companies. Many of them add some “chips” to their products that will interest a potential buyer. For example, if McDonald’s releases its limited series of tokens, then its owner will become a member of some kind of “closed club”. Staying there can give you, let’s imagine, the right to receive an additional burger to your order. Isn’t this an interesting opportunity? The companies themselves receive additional recognition, they will be talked about more often in the media, and authors, collectors, and just fans will work with them. It can be expected that such NFTs will only increase in price.