NFTs or Non-Fungible Tokens are undoubtedly the trendiest assets in the digital market. By the time technologists, developers around the globe thought that they were mastering blockchain and blockchain technology, just then NFTs kicked in. The first-ever NFT put up for sale is an autographed tweet by the founder of Twitter. With such high-profile individuals launching their assets, these digital assets are slowly setting their foot in the Indian digital market.
While the minds of the GenZs and Millennials in the country have been swayed away by the crypto craze, the NFT market is relatively small. Nevertheless, NFTs greatly influence the world of gaming and artwork. Whether you believe they are just speculative trends or an outstanding new opportunity for the artists, they remain in the spotlight when they sell for millions of dollars.
From how NFTs work, how they are made, to what they really are, we will be covering all the essential details of NFTs here. We additionally have lots of different NFT associated pieces like the best NFT artwork and how to make and sell an NFT token. And in case you are expecting to create your very own NFT, then make sure you check out the best digital art software for creatives to get started.
As mentioned earlier, NFTs stand for Non-Fungible Tokens. It is unique and irreplaceable. It is one of a kind digital collectible. In the technical language, these are tokens hidden in those out-of-the-ordinary artworks, totally unique and non-interchangeable. These are components of data stored on a digital ledger using blockchain technology to set up evidence of ownership.
NFTs are collectible virtual belongings that hold value the same way physical artworks hold value. These virtual tokens can be photographs, artworks, movies, songs, GIFs, social media posts, and anything and everything worthy of digital storage. NFTs and cryptocurrencies such as Bitcoin and Ethereum share a lot of similarities. However, NFTs are entirely unique.
So what makes these tokens unique? Well, this is where the “non-fungible” part starts to make sense. Anyone can replicate what is there in the NFT but will definitely miss out on the unique attributes while imitating the token. For example, bitcoin is fungible. So exchange one for every other bitcoin, and you will have entirely the same thing. However, a one-of-a-kind trading card is non-fungible. So if trading it for a different card, you will have something non- identical.
How do NFTs work?
An NFT records data in digital ledgers of transactions supported by blockchain. They made their first launch on the Ethereum blockchain platform, but now other blockchains, including Bitcoin Cash and FLOW, also support them. Like Bitcoin, Ethereum is a cryptocurrency where the blockchain supports and records components of data of these digital assets.
Ethereum is currently leading the market despite that some cryptocurrencies own their version of NFTs. The token is certified as unique by the blockchain, and it’s considered its reproduction as an imitation. Whether the original file format is a GIF, MP3, JPG, or any other format, the NFT that validates its title can be purchased and sold. The selling price depends on the market demand like any other form of art, like physical artwork.
How to purchase NFT
Do you believe that just by right-clicking the image of an NFT and downloading it on your system can make you a millionaire? Then do think again. Because downloading the image will not contain the unique properties that make it a part of the blockchain and authenticate the file as genuine.
So if you are planning to buy NFTs, unfortunately, there is no separate legal framework for NFTs in India. However, you can purchase them on different platforms depending on what you are looking for. For example, if you want to purchase baseball cards, heading to a site dealing with digital trading cards will be a good idea. The transaction can be completed by either paying through the platform’s wallet or paying via cryptocurrency.
Recently a surge in demand for different types of NFTs has been observed. As a result, just like with events, batches of tickets are frequently launched; similarly, NFTs are often released as ‘drops’ at different times to meet the rising demands. This means a crazy rush of eager customers; you will need to register and crown up your wallet to spend when the drop starts.
Some of the platforms that sell the best NFTs are:
- NFT Showroom
- Axie Marketplace
- Nifty Gateway
NFTs have taken the gaming world by storm. The in-game feature purchases are waving the gaming market. These assets can be purchased or sold by the players and include playable assets like extra coins, advanced ammunitions, swords, avatars, or skins, to name a few.
Who can use NFT
NFTs are gaining momentum amongst gamers, artists, and brands across the cultural spectrum. In fact, every day, a new player enters the NFT market. For artists, entering into the NFT market provides a plethora of opportunities for promoting their artwork and gives enthusiasts a means to support it.
NFT artwork tiers from small, quick-to-make GIFs to extra formidable works to more ambitious works. For example, a GIF called Rainbow cat by NyanCat was sold at a whopping price of $690,000.
It might be anticipated that paintings through famous artists might fetch a whopping amount as NFTs, something referred to as ‘artwork enthusiasts’ relied upon when they burned down an authentic Banksy as a way to increase the value of NFT. However, some trading comes along with a surprise, considering the Beeple sale. The Beeple sale was not only the biggest NFT art sale, but it grossed the third-highest price ever paid for a living artist.
On the other hand, NFTs are jiggling the gaming market. The concept of in-game purchases in video games is an old town talk. Until now, the in-game digital purchases belonged to the gaming company, allowing the gamers for temporary purchases to use them while playing the game. But since NFTs entered the picture, the assets are solely owned by the purchaser. This permits the owner to buy and sell the assets across the gaming platform with some extra value added to it. As a result, several gaming companies are switching their platforms and developing games based entirely on NFTs.
Not only the art and the gaming world are being affected by NFTs, but many brands are exploring NFTs as an extra revenue stream. For example, the US basketball league NBA entered the NFT market trend. NBA Top Shot is offering virtual collectibles in the form of trading cards embedded with some historic moments. The NBA is aiming to expand its revenue stream by not only sticking to trading cards but also strategizing to add virtual accessories, clothing, and jewelry. The assets will be accessible from social media too.
Don’t be surprised if you come across tweets being sold as NFTs. The founder of Twitter, Jack Dorsay, sold the first-ever tweet for a staggering amount of approximately $2,915,835. Even the musicians are selling the copyrights of their original work, short music clip videos. You can even purchase 3D assets like items of furniture and digital property as NFTs.
For example, a Toronto-based artist Krista Kim designed a digital house named ‘Mars House’ for $500,000. The design was tagged as SuperRare as the ‘first digital house in the world’ by the digital art marketplace. The house is designed to give the owner an experience of exploring the house on Mars using virtual reality.
A thought on NFT
The advent of blockchain technology and assets, including NFTs, deploy tremendous energy consumption. An increasing amount of energy consumption is adding to an increase in environmental carbon content. Some environmental activists are worried about the harmful consequences that this technology can bring in the long run.
A website called cryptoart.wtf evaluated the carbon footprints of NFT art ‘Coronavirus.’ It was revealed that it consumed an unbelievable 192 kWh only in its creation. This is considered equivalent to the entire energy consumption for two weeks of one EU resident. And it is estimated that a simple GIF NFT can consume the same amount.
There is no doubt that the NFT market is inflowing with a lot of money. However, the artists and other benefactors can contribute their efforts to reduce carbon footprints, like creating carbon-neutral artwork.
Many similar cryptocurrencies like Bitcoin, Ethereum, etc., are deploying proof of work methodology to secure their users’ financial data. But still, the system is harnessing colossal energy.
Many organizations are dropping their idea of entering into the NFT market, keeping in view the impact on the environment. This is indeed a good thought, but this eventually will lead such organizations out of the current league. Furthermore, given that the primary objective of NFT was to give control by putting forward digital ownership, the concept that is turning more and more imperious is causing conflicts.
Practically, anyone can create a chunk of art, flip it into an NFT in the blockchain, and advertise on a market of choice. The market’s best NFT tokens and top NFT tokens fetch a significant value to the work. Before purchasing an NFT, your wallet needs to be set up and full of cryptocurrency. This requirement for digital money causes some complications. To guide the novices, a lot of cryptocurrency courses are available on the internet. The beginners can search for NFT course or cryptocurrency courses according to their interests.
It is still an ongoing debate whether or not NFTs will stay, for the time being it is creating gateways of new opportunities for digital art and helping artists make some money. But it will be advised to carefully consider the platforms to use, keeping in mind the planet’s safety.