A Beginner’s Guide to Understanding NFTs
Written by Mariam Hamzat
Do you love paintings? Or do you understand why original paintings and art made by renowned artists like Leonardo da Vinci and Michelangelo are expensive? Some people buy artwork because they love it, understand it, and connect with it, while others buy it for its monetary value.
Often, artworks by famous artists are expensive because they are original, not available to all, and considered important for artistic reasons. There is usually only one original painting made by an artist, and no copy made can be exactly like it! That’s like NFT too.
NFTs are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Get that now? Let’s say NFTs are unique digital paintings. There can only be one of each, and no copies can be made because they have a “unique code” embedded in them. Just like a painter can, an NFT creator can sell a piece to an interested buyer, then the buyer sells it to someone else, and the chain of transaction begins. However, payments for NFT are made in cryptocurrency, the most popular of which is Ethereum.
This NFT has been owned by 5 people and because it has a unique address, you can see all the owners and the amount they purchased it. The unique address helps to obtain information such as offers that have been made and the listing price.
Why Should I Buy an NFT?
People buy NFTs for various reasons, but the most common is to make monetary gains. A lover of anime can purchase an NFT of their choice based on interest or perceived value. People who buy and collect NFTs are called collectors, and their catalogue, collections.
In the past few months, people have sold their NFTs for over 100% of the purchase price. So, when chosen right, NFTs are an investment. Just like when you choose to buy a pen for 50 Naira, you may choose to sell it for 100 Naira or 150 Naira in an examination hall. That’s flipping NFTs — buying for less, selling for a good price.
Like in any other transaction in the real world, no one can force you to sell your NFT for less than you want to. And you can keep raising the price for as long as you want. You can place a fixed price on your NFT and open it up for bidding when you list it.
How do I buy an NFT?
Art galleries are known across the country for their various exhibitions of paintings. Entering them is often free, and you can view as many as you want without payment until one catches your interest. That’s like NFTs too. There are hundreds of NFT creators across the world and you can continue to check out their works until you find one that catches your interest and is within your budget.
You can buy NFT on platforms such as Opeansea.io (that’s like a virtual art gallery). Create an account and link it to your wallet account (your purse) — MetaMask, Wallet Connect, Coinbase, Or Fortmatic. Ensure your wallet balance is sufficient and with a few clicks, the transaction is completed as Crypto exchanges wallets.
When can I sell my NFT?
You can send your NFT as soon as you obtain it if you want to. When you purchase a piece, it becomes yours, and you can list it for X2 or X4 the purchase price the minute you buy it. Listing is announcing that the NFT is available for purchase at a particular price. When you list it, interested buyers see that it’s available and can go on to purchase it. Have you got questions? Drop it and let’s discuss it further.
Mariam Hamzat is a content writer and journalist with interest in tech, sustainable development and communal growth.
Edited by Edited by Naimah Akinoso
Naimah is an editor, and product designer with a passion for interior design. She loves cooking, finding new recipes online and trying them. She also loves reading and watching horror movies. Connect with Naimah on Instagram, LinkedIn, Twitter and Dribbble.
Published by Akinsipe Temitope
Temitope is a young storyteller who thinks all stories are worth telling. She loves to inspire people to do what they love and follow their passions, tell their stories, and live in the present moment. Connect with Temitope on Instagram, and Twitter.