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How NFTs Work?

how nft works

The perfect newbie guide

An image of the artist Beeple called “Beeple’s Everyday: The First 5000 days” has been sold for a whopping $69.3 million on the internet. In the form of a JPEG image that you download every day just with the twist of technology with NFT. So, what is the new tech-ware that is taking the internet by storm, and is it just another cryptocurrency?

Busting all the myths and clouds of doubt keep reading to find out what exactly is NFT and how you could probably make a profit out of it?

What are NFTs?

The term NFT stands for non-fungible token and did that just bounce off your head? Well, for us too in the beginning.

The non-fungible token means that a digital asset or digital art is tokenized so that to make sure that we know who the real owner is in the sea of people on the internet.

Characteristics of NFTs

Let’s keep the terms simple and go by an example, you have visited a museum, and you spectacle the creation of the Mona Lisa. The painting is immaculate and you are stunned by it. In the process, you take a picture or two of the painting. Now you have a digital copy of it. But you are not the owner of the painting and nor can you take it home to hand on your wall (wish we could). 

Here comes the star of the game called NFT. NFTs are like proof or license that you are the verified and real owner of the property. 

Mona Lisa can be copied but the real painting is always real and can never be duplicated. Similarly in the world of digital art such as images, videos, GIFs or even tweets (I know right, even tweets!) can be owned with a token called NFT. These NFTs can be sold for money and the ownership changes to the latest owner.

So, now the question arises are NFTs just like money or cryptocurrencies with which these digital assets can be bought?

NFTs VS Cryptocurrencies:

The answer to the above question is NO. NFTs and cryptocurrencies and two different parts of the same technology called blockchain which we will cover later in the article.

NFTs are digital assets. They can be an image, a video a GIF, or an autograph but make it digital or even a tweet that can be sold for money and ownership of the same. It’s like buying Mona Lisa’s original digital copy which is the only one in the whole world. It’s like owning a digital asset.

Meanwhile, cryptocurrency is just like money but, make it digital. With cryptocurrency, one can buy many things or exchange the same cryptocurrency with another. Like you can exchange bitcoin for Ethereum both being a cryptocurrency. Or you can exchange the cryptocurrency for stocks or other forms just like money.

Therefore, it is critical to note the key features of NFT and what makes it different from cryptocurrency:

Having understood the crucial key points of the NFT, let’s have a look at why NFTs have a value to them as they can be easily downloaded from the internet:

Why is there a value attached to NFT?

As you may be wondering, what makes NFT special if I can just right-click on the image or GIF and download them instantaneously? You are right! You can download the digital art onto your computers but that doesn’t give you legal rights or ownership over the digital art. You just have copied the art and you do not own it.

NFTs are a method or procedure to own digital art or collectibles and have legal rights of ownership over them. Even the founder of Twitter converted his first tweet into an NFT and sold it for a half-million dollars. It means that he is giving them ownership of the NFT here tweet over to someone.

The value of the NFT is largely governed and controlled by the rarity and scarcity of the asset. If the digital asset is rare then the value will increase simultaneously, whereas if the digital asset is commonly available by multiple platforms then, the value of the NFT will drop due to the competition between the platforms on who will give in the least price. 

Moreover, NFT is secure and cannot be broken thanks to blockchain technology and online ledger directories. These techniques make the decryption and dismantling of the ownership of the asset quite impossible. 

All about the NFT Marketplace

NFT marketplaces are the places where you sell your NFT creation and the place where your digital wallet should be connected to. There are basically two types of marketplaces in NFTs: universal non-fungible token websites and niche peer-to-peer marketplaces.

Some of the well known and comprehensive marketplaces in the game of NFTs includes the following:

  1. OpenSea: provides a wide range of diversity and inclusivity to both creators and collectors. The collectors can find various rare and original items on sale such as trading cards, pieces of art, sports, and more. It is possible to build your own creations with minting instruments available but you would need to know a thing or two of the technical side.
  1. AtomicHub: the next up in line for the NFT marketplaces includes AtomicHub which makes use of wax blockchain. Here, the users can trade in terms of wax coins specially designed for the site. 
  1. SuperRare: as the name suggests, to get into the site and trade in this marketplace you need to be verified and a proven author with distinguished artworks. This way the site ensures only the creators can display their artwork and the collectors get the best of value. Therefore, sign-up and verification processes can be tough to pass. Here, Ethereum is a must for any transaction.

How can your own create NFTs? 

With NFTs sky is the limit. Anything digital can be converted into an NFT and sold off on various marketplaces. Digital assets start from images, videos, tweets, GIFs, or other forms which can be converted into a digitized version of the physical art. 

NFTs are the most versatile form of digital assets. Your NFT could even be virtual real estate, virtual worlds, fashion, and much more. Research shows that 83% of millennials prefer businesses that are aligned with their values.

One of the LIVE examples could be the NFT created by Taco Bell for the Live Mas Scholarship, all their NFTs were sold under 30 minutes. Another little-known Chinese virtual sneaker brand called RTFKT designed an NFT sneaker for the Chinese New Year and put it up for auction. The NFT was sold for $28,000 keeping in mind that the sneakers cannot be touched let alone wear them.

With the blockchain technology backing the NFTs we understand that people are ready to pay for great experiences and collectibles. It is the newest way to interact with your audience and create memorable pieces.

Therefore, it becomes quite crucial for you to move with the technology and use it the right way to disrupt the market (yes you can too do it!) be quick to embrace all the latest trends and fads coming your way. Adapt to the newest and craziest technologies and get on the bandwagon.

Here are the simplest steps to keep you in check while creating NFTs:

Want to create your versions of NFTs that are seamless and hassle-free then we got something for you!

Creating NFTs in 1,2,3… 

Step up your game with the right technology of our name. Keep the number crunching, security, and complex development procedure out of the box and think creatively. We give true creative freedom to the creators so that they don’t worry about the nuts and bolts. Keep the spotlight on you and forget about the backstage. With simple creation steps to selling the asset, we cover and guide you from step one. 

Hop over to start your NFT journey today!

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