NFTs: How to buy and sell them?

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There’s a new buzz in digital space and for many of you strange things are happening online. Different digital stuff is being purchased for hefty amounts, and by hefty we mean millions of dollars. Now, that has caught the attention of the world. There is digital art, jpegs, video clips, and other things that are sold in the name of NFTs. These are three simple letters that you need to understand, Non-Fungible Tokens.

Many people are unclear about NFTs and how do they work. We’ll be introducing you to the mechanics of them, what’s happening in the NFT space, how you can buy them, and much more.

NFTs as mentioned stand for Non-Fungible Tokens. Well, that’s pretty much it. What exactly does non-fungible mean? Fungible means replaceable and non-fungible means irreplaceable. That means an NFT is a unique digital asset. We believe that more than the real value of the asset, Non-Fungible Tokens have a lot of emotional and bondage value.

Take this as a scenario, a famous NBA player, Lebron James signed the LA Lakers shirt was auctioned for 1 million dollars. Now, that’s one of its kind, it has a brand value of the player and the essence of Lebron James in that shirt. That’s unique and that’s what we call non-fungible. No one else can have that shirt.

Therefore, non-fungible things are more valuable than fungible items. That’s the reason why they are so expensive.

Difference between NFTs and Cryptocurrency

It is also important to outline the distinction between cryptocurrency and non-fungible tokens. Although both are based on blockchain technology, the fundamental differences can help us to understand how NFTs work.

The major difference goes back to cryptocurrency being fungible. For instance, you can exchange a Bitcoin for another Bitcoin. In the case of NFT, you cannot do that. A non-fungible token is tied to one particular digital asset and cannot be replaced.

However, most of them are linked with different crypto projects. At a very high level, most NFTs are part of the Ethereum blockchain. An NFT is a record, typically on the Ethereum blockchain, that represents a piece of digital media.

Primarily, they first surfaced in the market back in 2014 and enjoyed a mini-boom in 2017 as cryptokitties. The industry got real attention in March 2021, when Christie’s, an auction house, sold an NFT of a work by Beeple for $69.3 million.

Buying an NFT is just like how crypto transactions work on blockchain. The blockchain will only validate the transaction publicly for buying a digital piece. That digital piece can be anything from a tweet to an NBA clip.

How to buy Non-Fungible Tokens?

NFTs as mentioned do not have inherent value, it’s the community that creates the value. It’s all about the physiological hype. That is similar to the physical painting, where people decide the worth of a certain piece of art. Convert that into a digital asset, you have the NFT.

If you’re looking to buy them, you’ll need to open a crypto wallet on an NFT marketplace. You’ll then need to fund the wallet with the crypto needed to buy a targeted Non-Fungible Token. For example, an NFT built on the Ethereum blockchain technology might require its purchase in Ether tokens.

Once you buy the NFT, you’re the owner. What to do afterward? You can then sell the Non-Fungible Token for a higher price in the market. You’ll need to upload the NFT on the marketplace of your choice, provided that the marketplace supports the blockchain the NFT was built on. From there you can list it for sale at a fixed price or go for an auction-style sale.

Once your NFT is sold, the crypto token will be transferred to your wallet excluding the listing fee and other expenses, if any.

How to create an NFT?

You just need to find an online marketplace and get into the basic minting process. Have a crypto wallet opened and funded (like with Ether to cover the computing fees involved with creating the NFT). Simply click the ‘create’ button within the marketplace and upload your work. The selling method is similar as we mentioned earlier. List the NFT for sale either for a fixed price or for sale via auction.

What’s Happening in its market?

The real game lies behind those who are creating their own NFTs. Many names have emerged as NFT creators and they’re making millions out of it. The hype in the NFT marketplace is getting for real. We have renowned celebrities launching their own NFTs.

Indian celebrities from the world of Bollywood and cricket are increasingly launching digital memorabilia through non-fungible tokens. Bollywood superstars such as Amitabh Bachchan and Salman Khan are planning to launch NFTs soon. That’s just the beginning of NFTs in one part of the world.

Famous Football players like Lionel Messi and Gareth Bale are also supporting NFTs. Recently NBA star Stephen Curry purchased an NFT from the Bored Ape Yacht Club for $180,000 worth of ETH.

Things are really getting exciting in the NTF marketplace. Just like the hype that was created around Bitcoin in 2017. We can see celebrities already exploring the market and investing heavily as they see a probable future in it. NFT is not yet into the mainstream itself but we have mainstream players entering into the space including Marvel Entertainments, Star Wars, to name a few.

Future

Hopefully, you now have an understanding of what NFTs are and how they work. We’ve seen that there are several potential applications for non-fungible tokens in the real world, but are they a technology of the future?

It’s too earlier to create a subtle point-of-view on NFTs. However, with the evolution of the digital world, especially cryptocurrency and blockchain technology, NFTs can become a demanding marketplace. Clearly, there is a huge interest in them at the moment, as well as several potential benefits.

It’s great to learn about the new trends in the market. To put in your record, according to DappRadar, NFTs issued on the Ethereum blockchain have an estimated worth over $15 billion. That has increased from $340 million in 2020.

According to a poll conducted in March by Harris, a market-research firm, 11% of American adults say they have purchased an NFT. That’s only a percentage point less than those investing in commodities. Moreover, Jefferies’ analysts expect the value of NFTs to double in 2022 and reach $80 billion by 2025.

Risks Involved

Like any new technology, Non-Fungible Tokens have flaws. The first major drawback is that it’s a speculative market. Therefore, to expect long-term value growth in NFTs could be risky.

Moreover, digital assets can be copied. That means NFT can be copied and shared on social media. Just because you own the Non-Fungible Token doesn’t mean you control the asset – you simply have a token of authenticity.

The costs are pretty high and environmental impacts of blockchain-based cryptocurrencies such as Ether and Bitcoin are already in question. There are already reports of stolen Non-Fungible Tokens after cyber security breaches. Although the technology behind NFTs is relatively secure, many of the exchanges and platforms aren’t. We would see improvements in it with time.

For now, non-Fungible tokens are beyond the understanding of governments just like cryptocurrencies in their earlier days. However, we believe with crypto adoption, Non-Fungible Tokens will survive and expand likewise. In the meantime, non-Fungible Tokens will have a bumpy ride and once it reflects a positive impact on the environment, that would be the real beginning of NFTs.

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