Non-fungible tokens (NFT/NFTs) have rapidly grown in popularity, with digital artworks selling for millions of dollars. Enthusiasts consider NFTs as the next level of art collection. But the fad is confusing people who wonder why NFTs are so expensive. So, what are NFTs?
Vitto Rivabella (@VittoStack) said in his Twitter post that everyone is talking about NFTs, but only 0.001% of them understand their importance.
What are NFTs?
Ethereum.org defines NFTs as tokens used to represent ownership of unique items. They allow us to tokenize stuff like art, collectibles, and even real property. A non-fungible token can only have one owner at a time, and the Ethereum blockchain secures them. The tokens are non-fungible, meaning they can’t be exchanged for another similar item with the same value.
NFTs are usually purchased using cryptocurrencies or dollars, and the blockchain keeps a record of transactions. Although anyone can view the NFT, only the buyer gets the bragging rights of being the official owner.
What are the kinds of NFT?
All digital items such as music, images, videos, texts, and sometimes, tweets can be bought and sold as NFTs. Digital arts are some of the most high-value sales.
The most expensive digital art sold in the form of NFT for $69.3 million was the work of Mike Winkelmann, popularly known as Beeple. Twitter founder Jack Dorsey’s “just setting up my twttr” post was sold for $2.9 million as an NFT.
In September 2021, NFT of the popular viral meme side-eyeing Chloe was bought by 3F Music Production Company (@3FMusic) for 25 Ethereum (approximately $75,000).
What is the size of NFT trading?
The NFT market hit $10.7 billion in transaction volume during the third quarter of 2021, based on the analysis of DappRadar. DappRadar is a company that monitors data on crypto-based applications.
Why has the NFT popularity surged?
Analysts say that the rising popularity of NFTs could be attributed to lockdowns driving people to spend more time on the internet. NFTs are a way to collect online assets, which connects to social status and personal preferences. NFT is the digital equivalent of purchasing a pricey pair of shoes and other accessories for some people.
Digital artists see innovative ways to earn, thanks to substantial NFT auctions. Surprisingly, celebrities join in as they notice a new opportunity to connect with fans.
What is the importance of NFTs?
Collectors see NFT as a new level of ownership. They believe that all types of properties will eventually have their status tokenized.
For artists, NFTS could address the problem of how they can monetize their digital artworks. They could get more revenues from NFTs through royalty every time the NFT changes ownership after the initial auction.
For digital artists, NFT could solve the problem of how they can monetize artworks. They can receive more income from NFT, as they can get a royalty each time the NFT changes hands after the initial sale.
Advocates also predict that NFT could change sports, gaming, and music.
What are the risks of NFTs?
Similar to cryptocurrencies, NFT are unregulated. Anybody could create and sell an NFT, and there’s no assurance of its value. Also, losses could pile up once the popularity dies down.
As mentioned earlier, here are the seven resources shared by Vitto Rivabella to help you understand NFTs:
- Ethereum.org
Obtain answers to the question -what are NFT straight from the creators of Ethereum themselves. The website provides a complete guide about NFT, including their uses, technology, and principles.
- Favor Onuoha (@heyOnuoha)
Favor Onuoha, a blockchain developer and content creator, provides an ultimate guide to NFTs and why they’re essential. He also published a step-by-step guide on how to mint an NFT.
- Web3.university
Web3 University offers the fundamentals of web3 development, from writing Solidity to minting NFTs to creating full-stack dApps.
- airnfts
The site has everything you need to know about NFTs, metaverse, etc.
- Non-Fungible
Non-fungible is your source of NFT market analysis and project reviews.
- NFT Plazas
NFT Plazas is the best website for individuals who want to learn about NFTs as it covers a wide range of topics.
- OpenSea
OpenSea is the most prominent digital marketplace for NFT and crypto collectibles. It’s where you can buy, sell, and discover exclusive digital assets.
After learning about the basics of NFT, the resources above could lead you to a more in-depth study on non-fungible tokens.
