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You must’ve seen various artworks ranging from masterpieces to something very simple being sold for millions as NFTs, and you are wondering, what the heck is going on? What are NFTs? Well, I’m here to educate you all about that. Today’s we’re talking about NFTs Explained- For Beginners.
Let’s start with this…
What does NFT stand for?
NFT simply stands for; Non-Fungible Tokens
What is an NFT?
The word “Non-Fungible” means unique and cannot be replicated. So, a Non-fungible Token is a unique digital token which can serve as a certificate of authenticity and proof of your right to own and display the art on your digital wallet.
Because these pieces are unique, it creates scarcity which in turn adds to the value for NFTs.
NFTs can be anything digital; music, drawings, videos and so on. Twitter even made an autographed tweet into an NFT!
How do NFTs work?
NFTs are part of the Ethereum blockchain. Just like Bitcoin and Litecoin, Ethereum is a cryptocurrency but its blockchain supports these NFTs.
An NFT is an ERC-721 token on the Ethereum Blockchain. The artwork is minted into the ERC-721 token. This token contains:
- the historical information of any transactions plus artist information (including the artist’s public key) plus the number of likes (see the tiny ‘heart’ symbol above the image in the NFT).
- a unique identifiable number = the token ID (click ‘chain info’).
- A picture of the art.
- A smart contract (the NFT is effectively a smart contract – you don’t need humans to sign signatures). Standard copyright law applies and more specific conditions can be added to the description section.
- A list of unlockables (i.e. additional optional extras).
When NFTs are sold, the creator receives their payment in their crypto wallet.
Why the Fuss about them?
The excitement around NFTs possibly comes from the feeling of ownership of something rare and unique, typically a digital asset.
NFTs create scarcity by definition since each NFT is unique.
Benefits of NFts
There are various benefits of Non-fungible Tokens, and they are listed below:
- A new art form- With NFTs, we have witnessed the introduction and rise of new forms of art and it’s beautiful to see. Artists have evolved and some even turned their artworks into live drawings/videos!
- New marketplace for artists: The NFT market is a new place to market artworks. It’s a new channel for artists to create, market and sell their artworks. Now, art has been digitized into animations, 3D renderings, montages and more. Added value to art: NFT buyers/holders can unlock extra options and experiences by owning and NFT.
- Good way to support artists: For art buyers, it’s a new avenue to support artists by buying their artworks and in turn they get to build a portfolio and create investments.
- Good way to track ownership: You can see who created an artwork, where it came from, how much it was sold, who owns them and more. On the blockchain used, there is a permanent history record which adds even more value to the NFTs.
Platforms to Trade NFTs
This is one of the most popular NFT trading platforms and is a leader in NFT sales. It also supports creators, and has an easy-to-use process if you want to create your own NFT, known as “minting”.
2. Nifty Gateway:
It’s an art curation platform powered by the crypto exchange platform, Gemini, which is controlled by the Winklevoss twins. The NFTs, known as Nifties, are built on Ethereum.
Using Rarible, you’ll need to use the marketplace’s own token Rarible (CRYPTO:RARI) to buy and sell on the marketplace. Rarible is built on the Ethereum blockchain (although artwork can be managed on OpenSea as well using Rarible tokens).
Sales are made using Ethereum. Since the marketplace’s launch in early 2021, it has sold more than $100 million of NFTs.
Artists are invited to the platform by the Foundation community, and buyers simply need a crypto wallet funded with Ethereum to start making purchases.
To participate in buying and selling NFTs on Mintable, you’ll need Ethereum. The platform also supports minting of NFTs for creators of all types (from photographers to musicians) who want to sell their work as a digital asset.
An aspiring NFT collector or creator will need to purchase Ethereum from a crypto exchange first, then connect their wallet to Mintable to facilitate bidding and buying on the marketplace.
6. Theta Drop:
Theta is a blockchain platform built for the decentralized distribution of video and TV on the internet. The NFT marketplace Theta Drop made its debut in 2021 with the World Poker Tour’s digital collectibles. The World Poker Tour was an early adopter of ThetaTV and uses the platform to stream content.Theta utilizes its own blockchain technology. To participate in the Theta Drop NFT marketplace, you’ll need to purchase Theta Token. Various crypto exchanges such as Binance support Theta, and the tokens and NFTs purchased with them can be stored in a crypto wallet, as well as in Theta’s own crypto wallet app.
and many more.
NFT has helped a lot of artists to emerge and although it has its challenges such as; Fake creators, hidden fees and so on, it’s actually not that hard to understand.