Things You Need To Know About NFT
In March 2021, ‘The First 5000 Days’, a work of art named ‘Everydays’ sold for $69 million at Christie’s Auction House. What matters is that the piece was sold as a non-fungible token (NFT).
From then on, NFT has started to permeate culture in various ways. Through public marketplaces like OpenSea and Foundation, as well as custom-built applications like NBA Top Shot, there are now hundreds of millions of dollars of NFT sales each week.
Then, how exactly did NFTs become so popular in such a short period of time? In this article, we will help you to reveal the secrets of NFT’s success through the following 5 aspects: ‘The conception of NFT’, ‘The value of NFT’, ‘The source of NFT’, ‘The function of NFT’ and ‘The future of NFT’.
What is NFT? (The conception of NFT)
“NFT are a form of social media: it’s not just something to put on a wall. It’s more like a member of a club or cult. As a mechanism, NFT makes it possible to assign value to digital art, which opens the door to a sea of possibility for a medium that is unbridled by physical limitations.” said Noah Davis, an art specialist at Christie’s Auction House.
Perhaps we can explain it easier. NFT is a type of crypto asset that exists on a blockchain, where the collectible item is made unique by giving it a unique code. Because of the existence of the code, people can be the owner of that digital asset, as each NFT is unique and cannot be replicated.
Why is NFT so popular? (The value of NFT)
There are a few answers to this question below.
1. NFT has changed the history of the digital assets market.
In history, there was no way to separate the “owner” of digital artwork from someone who just saved a copy to their desktop. Before someone can buy an item, it has to be clear who has the right to sell it, and once someone does buy, the ownership will be transferred from the seller to the buyer. NFTs solve this problem by giving parties something they can agree represents ownership, and they also achieve the formation of a new type of transaction like buying and selling items that could never be sold before, or enabling transactions to happen in innovative ways.
2. NFTs can be used to create markets in a variety of different items because NFTs’ ownership is easy to certify and transfer.
Based on the feature of ‘non-fungible’, each NFT is a unique digital item. They’re stored on public-facing digital ledgers called blockchains, which means, it’s possible to prove who owns a given NFT at any moment and trace the history of prior ownership. Besides, it’s easy to transfer NFTs from one person to another, just as a bank might move money across accounts.
3. NFTs can give benefits or allow their owners to get benefits in both digital spaces and the physical world.
Because blockchains are programmable, it’s possible to endow NFTs with features that enable them to expand their purpose over time, or even to provide direct utility to their owners. For example, NFTs can serve as digital keys to online spaces where holders can engage with each other, functioning like membership cards or tickets, providing access to events, exclusive merchandise, and special discounts. NFT NYC conference is an in-person meetup organized by creators for their NFT holders. Besides, NFTs can help owners gain access to an online game, chat room, merchandise store, and so on. Because the blockchain is public, creator teams sometimes grant additional tokens or items to their NFT holders in ways that expand the product ecosystem. Owners of a particular goat NFT are able to claim a free baby goat NFT. Owners of a particular bear NFT can receive honey. These give benefits beyond the simple ownership and original token for NFTs owners.
In summary, The value of NFTs is reflected in NFTs making you an investor, a member of a club, a brand shareholder, and a participant in a loyalty program all at once. Meanwhile, NFTs’ programmability also expands new business and profit models. For example, NFTs can help achieve a new type of royalty contract, when a work is resold each time, part of the transaction goes back to the original creator, and this is also a new and effective way of revenue generation for creators.
How can we get NFTs? (The source of NFTs)
In general, there 3 ways to get NFTs.
1. You can buy NFTs from one of many marketplaces such as Opensea, Nifty Gateway or NBA Top Shot.
Until June 2022, there are a few NFT Marketplaces to buy NFTs for reference.
1. OpenSea. OpenSea is currently the largest and one of the most versatile NFT marketplaces out there. It offers a wide range of NFTs in a number of areas — art, music, sports, games, fashion and collectibles. Opensea’s numerous learning resources make it accessible and easy to use.
2. NBA Top Shot. NBA Top Shot is an NFT marketplace that offers digital NFT collections of momentous NBA video highlights from games and individual players.
3. Nifty Gateway. Nifty Gateway offers a wide variety of NFT drops, drawing buyers whose aim is to collect or trade art with long-term value.
Attention, please! Before you buy NFTs through NFT Marketplaces, you have to:
1. Open an exchange account and crypto wallet.
2. Buy Ethereum, the token most widely used to buy NFTs.
3. Transfer Ethereum into a crypto wallet.
4. Connect your crypto wallet to the NFT marketplace.
Then you can make the trade of NFTs. For each NFT transaction, the platforms will charge a little fee.
2. Join Gaming Guilds to get NFTs.
You can also join Gaming guilds to get NFTs. Many gaming guilds have set up a scholarship system for new gamers. They can provide new gamers with free NFTs, other resources and information to play P2E games easier. And we recommend gamers to join X-Ra Gameverse.
3. Design and generate your own NFTs.
You can use your own video, audio and images to design and generate unique NFTs on the blockchain for sale or other intentions. This is also a way to get NFTs though it requires you are good at this.
What are NFTs used for? (The function of NFTs)
After you get NFTs, you will find out that they can serve multiple purposes. Here comes a few as below.
1. To display in your home
There are a variety of digital displays and frames available to showcase your NFTs.
2. For investment purposes
Many NFTs can potentially increase in value over time, in particular those from well-known artists or collections.
3. To trade
NFTs have a fast-growing secondary market. Traders aim to make a return on their initial investment using a variety of trading strategies, such as buying the floor (buying at the lowest price) or buying the ceiling (buying rare or valuable NFTs).
4. To use on the internet
Many people use their NFTs as profile pictures or avatars. Additionally, NFTs can be put on display in the Metaverse, either in virtual galleries, meeting rooms or in your own private space.
5. To earn income as a creator
Creators can turn their artwork into NFTs through the process of minting. You must first mint your art in order for it to be sold in a marketplace. Depending on the marketplace blockchain used, this process can be extremely expensive. Many marketplaces are one-stop shops and provide a minting option for creators in exchange for a commission. This rate varies drastically. Artists can also receive royalties for each secondary sale. Higher-end marketplaces are exclusive and require artist applications or invitations.
6. To earn income as an investor
Some people use NFTs for trading and investing, and NFTs can also be a source of passive income. Using NFTs in this manner requires a substantial effort to learn about the cryptocurrency industry and NFTs market.
What about the outlook of NFTs? (The future of NFTs)
In the end, let’s take a brief look at what the future of NFTs looks like. As we continue to progress into an even more digitalized economy, NFTs may play different roles in 5 ways as below.
1. Digital and physical ownership
NFTs don’t only represent digital assets, they can also represent physical goods as well. Yes, NFTs are and will continue to be used to prove ownership of physical assets, but now, NFTs prove the ownership of digital assets.
2. The future of art
NFTs have eradicated the bane of plagiarism and wanton copying brought on by the internet. Artists have more control over the work they produce and even sell their work directly to their customers, without having to depend on corporate forces or intermediaries.
3. Smart contracts
To NFTs owners, a smart contract may state that you are the owner of an asset in the physical world, or it can give you access to a real-world event. Whether it is a loan or some other type of legal contract, transactions can be executed by a smart contract, and NFTs can be the proof of that contract.
4. Tickets and events
As mentioned earlier, NFTs are already being used as tickets to access in-person events. In the future, it is possible that all events will utilize NFTs rather than physical ticket stubs.
5. Digital commerce
In the future, eCommerce focus on decentralized commerce, and NFTs can enable this better. NTF can lead to the elimination of e-commerce intermediaries. With the intervention of NTF, transactions will be peer-to-peer and customers can trade directly, ultimately regaining control of the transaction.
That is it. These are everything you need to know about NFTs. We welcome you to follow us to gain more blockchain knowledge. Thank you for reading.
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