NFTs are the new gold: Enter the world of Non-Fungible Tokens
Indeed, NFTs only really bloomed between 2020 to 2021, but they have been around for a while. Many did not favor the idea of non-fungible tokens when it was first brought up. Now, they are poised to be the next big thing in blockchain technology, as some would say, the new gold.
Blockchain technology and cryptocurrencies have quickly become pillars in the world as we know it. Whenever the word ‘Blockchain’ is mentioned, many immediately think of cryptocurrencies. The buzz around Bitcoin, Ethereum, and, most recently, Dogecoin is breathtaking. Yet, Blockchain use goes beyond cryptocurrencies and even finance as a whole. Indeed, the hype is slowly moving on to other potential gold mines.
On 22 March 2021, Twitter’s CEO, Jack Dorsey, was in the news. He had just sold the first-ever tweet on the platform for $2.9 million on Valuables. How could he sell a tweet? Why would anyone buy a tweet? While we do not know the reason behind why he sold the tweet, we do know how he managed to sell the tweet.
He sold his tweet as an NFT.
What Actually Are NFTs?
One problem that the world has struggled to eliminate is the theft of intellectual property. Artworks scattered across museums today found their way there through suspicious means. Musicians put their works on streaming platforms, yet their music is available for download barely minutes after release. Pictures, artworks, and other creative content are stolen left, right, and center and their original owners have no proof of ownership. Plagiarism is a thorn in the flesh of every creator and NFTs have effectively changed this narrative.
Non-fungible tokens (NFTs) are one-of-a-kind information stored on a blockchain ledger. Unique and publicly owned, they offer leverage as they cannot be used in their original form except through the creator. Any information can be minted as an NFT, from tweets, like Jack Dorsey’s, to music from the likes of Kings of Leon and Grimes, sold in May 2021 or crazy, random art like the ether rock, and video clips. The peculiarity of NFTs is that they cannot be exchanged for a similar token, unlike fungible tokens with no uniqueness. There will only ever be one Jack Dorsey tweet NFT.
This Ether Rock was sold for 33ETH on EtherRock.
The Ethereum network remains the most popular blockchain on which NFTs are minted as most NFT marketplaces are built on the Ethereum blockchain. Recently, other blockchain networks have also started to support the creation of non-fungible tokens.
How Are NFTs Created?
NFTs are anything but magical. They are bits of information stored on a blockchain to retain genuineness and allow creators to receive maximum rewards for their work. When an NFT is created, it takes the identity of the non-fungible token variant of the blockchain it is minted on. Knowing all the terms can be tedious, yet it is essential to have some information available if one ever wants to create NFTs. Unless of course, you get someone to do it for you.
The first thing you need to get sorted when creating NFTs is the blockchain that will be used. Ethereum and the Binance Smart Chain Network are the most widely used blockchains for minting non-fungible tokens because most marketplaces are built on them.
The creation process is more straightforward; one does not need to be a techie to get it sorted. First, create or download a cryptocurrency wallet. If you are using a PC, Metamask would be a great option. If you are on a mobile device, there are tons of wallets you could use, depending on the network you want to create the NFT on. Trust Wallet, Math Wallet, and C98 Wallet are some popular wallet options.
Next, proceed to popular NFT marketplaces and apps which support minting. You would need to cover the cost of minting, and transaction fees in cryptocurrencies, depending on the network the minting platform is built on. For instance, Opensea NFT Marketplace is built on the Ethereum blockchain; hence Ethereum will cover transaction fees.
In a recent tweet, Opensea confirmed that they have unveiled their mobile app solely based on NFTs. The app will allow users to track the latest NFT drops and follow the collections they like.
Some NFT marketplace platforms might require users to create accounts, but in all, typical NFT spheres should be accessed through the in-app browser of the wallets. Popular NFT marketplaces include Curate, Opensea, Rarible, SuperRare, and AtomicMarket.
Finally, create your NFT by uploading the content (video, .jpeg, MP4, anything digital) onto the platform. Once the minting cost is covered, the NFT will be published on the blockchain in no time at all. There you go!
The New Gold?
NFTs have the potential to easily replace traditional artworks, seeing as the world is well into the digital age. Are NFTs profitable? They are; the most expensive non-fungible token was auctioned at a whopping $69.3 million.
A typical CryptoPunk NFT.
Even on less popular blockchains for NFT creation, the numbers remain pretty phenomenal.
Tim Copeland tweeted in a thread,
While these are relatively few instances compared to many NFTs in circulation, you can still get an average NFT for a reasonable price.
Who would have ever thought a regular EtherRock would sell for as much as 33ETH, (currently around $113,233)?
For creators, NFTs are the best way to control the ownership of your work and probably rake in more money than streaming would bring. For investors and speculators, NFTs are an excellent store of value due to their rarity.
It is important to note that a product would not be bought for a high price simply because it is a non-fungible token. Factors like hype, overall quality, and rarity also play a huge role in determining the value of an NFT. Like the cryptocurrency market, the NFT space thrives on hype and volatility; it’s not a get-rich-quick escape. Additionally, look out for rug pulls and fake NFT projects; and as crypto enthusiasts would say, “always do your research.”
NFTs are the new gold. Artworks have long been a profitable store of value, and now NFTs can be too.