NFTs stand for Non-fungible tokens. They are a new type of digital asset secured by cryptography. NFTs can represent anything – from commodities like gold and silver to digital items like music, art, photos, and even tweets. There are also NFTs that come in the form of digital assets like virtual land, in-game items, and more.
These tokens can be acquired and sold just exactly like tangible world assets and are stored in a secure digital wallet. The utilization of blockchain technology ensures that the authenticity of the digital collectible is verifiable by anybody with access to the blockchain repository of the platform.
What are Non-Fungible Tokens?
NFTs, or Non-Fungible Tokens, are digital tokens that represent ownership or rights to a digital asset like art, music, or video. The transaction is usually recorded on a blockchain and verified by the network.
Non-fungible Tokens cannot be substituted with any other token because they are produced uniquely in the blockchain. This distinguishes them from cryptocurrencies like Bitcoin and Ethereum, which may be exchanged for other cryptocurrencies of the same sort.
When you create an NFT, you are minting a new token with its unique value. You can use it to represent anything you want. NFTs can also contain smart contracts that may give you a cut of future sales, making them very useful for artists, musicians, and others who want to create limited edition digital collectibles.
What are NFTs used for?
NFTs are mainly used for proving ownership or rights to an asset. As the transaction is recorded and verified on the blockchain publicly, which cannot be replicated, NFTs can help reduce fraud or theft.
There are three core utilization of NFTs nowadays inlcude:
- Digital Artwork: Artists are leveraging NFTs to prove ownership of their created work and create unique digital art pieces with proven originality.
- Proof of Ownership: Selected industries like real estate and sports memorabilia leverages NFTs to prove ownership and validate the authenticity of a product.
- Digital Gaming Assets: Users purchase NFTs to own in-game items with futuristic monetary goals like weapons or playing cards, e.g., games like Axies use NFT as an in-game reward for players .
How to get into NFTs?
Here are some easy steps to help you get started with NFTs:
1. Create a digital wallet like Metamask
The first step in the NFT buying process is to create a crypto wallet for NFT. A digital wallet is a must-have when it comes to making NFT purchases. This is because these wallets can store crypto coins, which are necessary for completing transactions in the blockchain.
NFTs can be purchased with cryptocurrencies, like Ether (ETH). You will need a digital wallet that supports cryptocurrency like Ethereum. There are numerous types of digital wallets available. You need to choose one that supports the cryptocurrency you plan on using for the transaction.
2. Get some ETH in your wallet
Ether (ETH) is the cryptocurrency utilized in paying for Non-fungible Tokens (NFTs). To buy, sell or transfer NFTs, you will need some Ether in your wallet.
There are many ways to get Ether:
- Buy it with local currency at a crypto exchange platform such as hi, Coinbase and Gemini.
- Transfer it from the crypto exchange to your wallet. You can use any crypto exchange that allows you to transfer ETH to another wallet address.
- Ask a friend or family member if they have some ETH to send you.
- Receive ETH as payment if you sell an item or provide a service that accepts Ethereum as payment.
3. Visit NFT marketplace
An NFT marketplace provides a platform to create (or mint), sell, purchase, bid on, collect, trade, and showcase your NFTs. These marketplaces are to NFTs what Amazon or eBay are to goods. The most popular NFT marketplaces include Open Sea, Nifty Giveaway, Foundation, Rarible, SuperRare, etc.
It is necessary to choose a marketplace that fits the goals and features of the project. For instance, some marketplaces require a wallet specific to the platform. Other platforms charge huge “gas” fees for every sale in addition to fees for selling and buying.
Types of NFT: Examples of NFTs
1. Digital art
The most common type of NFT is an image, drawing, or video. Artists have been selling digital art for decades, but the difference now is that these files are assigned a unique identifier and stored on a blockchain.
2. Sports collectibles
Sports collectibles are a rapidly growing area of the NFT market, with professional leagues and teams starting to notice. For example, fans can now purchase digital rookie cards from their favorite football players on NFL Top Shot.
Apart from trading cards, fans can also buy and sell highlight moments from NFL games on the blockchain.
3. Game Assets
NFTs are being used in the gaming industry to represent digital items and collectibles in the gaming industry. In-game assets such as weapons, equipment, armor, etc., can be sold on open markets using NFTs.
Popular NFT games are CryptoKitties, Axie Infinity, Gods Unchained, MyCryptoHeroes, etc. One of the most common categories of NFTs is game assets. Game assets can be collectible cards, rare skins, and weapons. Some popular games that use NFTs include Gods Unchained, Decentraland, and Fortnite.
The first notable song sold as an NFT was Kings of Leon’s “Supermarket,” released in February 2021 for $50,000. Grimes’ “Kryptonite,” which sold for $6 million in March 2021, and 3LAU’s album “Ultraviolet”, which sold for $11.6 million in April 2021, came in second and third, respectively.
Memes have become a popular asset and started the NFT trend on Ethereum. Memes are a type of digital art that can be traded and sold on the blockchain as Non-Fungible Tokens (NFTs).
Some examples of NFT memes created by artists:
‘Dog Lover’ was one of the first meme NFTs to reach a high price. The artist behind it is unknown but is believed to be an anonymous user called ‘bark.’ The DOGE meme was auctioned for $4,200 in September 2020. The asset is still available for purchase on the OpenSea marketplace at the price of $4,500.
How does NFT minting work?
Minting an NFT is the process of producing a new non-fungible token and selling it on the blockchain. You can offer your NFT for sale by setting a specified currency or cryptocurrency price. Buyers will pay to add them to their collection, which creates value for you and other artists that use this platform. Minting your NFT is free in some blockchains like Solana or Ethereum. You can easily mint as many tokens as you want.
An NFT can represent anything digital, including art, videos, music, data, and images. The only requirement is that it’s rendered in JPEG, PNG, GIF, or MP4 format. Several different software programs allow you to generate these files into an ERC-721 token on the Ethereum blockchain.
How can I use my NFT?
If you already own an NFT but don’t know how to use it, you could consider applying for a hi Debit Card. Eligible hi members can personalize their debit card with their owned avatar. With an NFT crypto card, you can take your NFT collection wherever you go.
Here are some highlights of the hi Debit Card:
- Spend Euros, Pounds, stablecoins, and other cryptos at any Mastercard merchant worldwide
- Up to 10% card spend reward
- Rebate on between 1-20 Digital Subscriptions
- Fund your card instantaneously via SEPA or FPS with Euros or British Pounds using a hi personal IBAN
- NFT customization for eligible cardholders to personalize the face of their card with an NFT avatar they verifiably own
NFTs stand for Non-fungible tokens. NFTs are digital tokens that represent ownership or rights to a digital asset like art, music, or video.
NFT Art is an unique digital art piece that is tokenized on the blockchain. Artists can create and mint their artworks on an NFT marketplace and sell them directly to buyers.
The cost of an NFT depends on the network, creator and many other factors. If you’re a creator looking to mint your own NFT, the cost of minting can range from $1 to an average of $900. If you’re a collector, the cost of buying an NFT would vary based on the rarity, popularity and trading volume.