Non Fungible Tokens (NFT's) has been a hot topic in recent months. Big influencers such as Gary V are promoting NFT's and the Metaverse, as they share the common belief of metaverse exploding exponentially in the future! The metaverse and NFT's are closely interconnected, If you want a greater understanding of the metaverse you can read my previous blog on TheMetaverse.
What exactly is an NFT?
An NFT is a digital asset that is based on real-world objects. These assets can be bought with crypto or some platforms even provide the option to buy via visa/MasterCard. NFT could logically be any real-world entity but usually, they are images, videos, game characters, gifs, music etc.
These vary depending on how creative people can get, Hence it has infinite potential. NFT's range from sport's cars, monkeys to even toilet paper >.< They are usually one of a kind and generally have the same underlying code as many cryptos that already exists. NFT's are not something that was created/coined recently they existed even 5 years ago(probably even in 2015) but with the recent metaverse hype, Millions of dollars have been invested into them. Usually, NFT projects have a limited supply and even have rarity charts that define the NFTs price range.
Common Question: Anyone could just download the image, Then why would people spend Millions of Dollars '$' on NFT's?
Answer: The question is a valid one because if it's not unique anymore then it loses its value. Once you purchase an NFT on a marketplace you own the original copy which consists of a built-in authentication that servers as "proof of ownership". This makes each NFT unique thereby giving it value.
Let's Understand What does Non Fungible Mean!
Like I mentioned before the base program of crypto and NFT's is the same But NFT are kind of the opposite of crypto in many ways Eg: One Steem could be traded for another Steem since both the tokens could have the same value 0.4$ = 0.4$ this makes crypto or even real currency[$, INR, EUROS,ETC.] fungible in the sense it can be traded for 50% of the token or 10% of its price etc. An NFT is non-fungible in the sense it is unique it makes it impossible to exchange with another NFT.
How can one buy NFT's?
Usually to create an NFT collection you need a team who helps you out with the project. The team members should be experts in various domains such as digital arts, cryptography, marketing, finance, web developers etc.
This whole process is very tedious but it's worth it, if it becomes successful then the profits are insane. Most people prefer buying NFT's of popular projects on marketplaces as most of us don't have access to such teams or have the time for a career switch.
To buy an NFT you need
✓ Crypto wallets such as a metal mask or a credit card 💳.
✓An account on the marketplace.
✓ Connect your account and the wallet.
✓ Some additional $ for the fee charged by the wallet or the marketplace.
I Have experience with OpenSea and Solonart. You have to first register on their website to purchase any NFT, then connect your crypto hot/cold wallets or purchase crypto with a credit card. Once you have the payment method secure you need to choose the nft project you're looking for. The interface is very user friendly and simple to use. I recommend using the polygon network on the open sea to avoid the eth gas fee.
Should you buy NFT's?
NFT's all in all is still a risky investment, You need a buyer for your nft who agrees to bid or purchase it at a price that is profitable for you. Not everyone would be agreeable to purchasing your NFT at the price you sell for, There would be times when you would have to sell in loss because the project lost its hype.
If you have some extra assets you could try purchasing new NFT after getting whitelisted on new NFT Project's that way you mint it at a base price and can sell on premium during the hype.
This is by no means financial advice, Its is just my view on NFT's
Hope you learnt something new from this blog, Let me know your thoughts on this topic in the comments :^)