At this point, we are all likely to have heard of the cryptocurrency Bitcoin. Perhaps, if you’ve been keeping up with the evolution of cryptocurrency, you’ve even heard of the more recently emerging Dogecoin. And if you’ve really been paying attention? You certainly may have heard of NFTs.
NFT stands for non-fungible token. NFTs can be digital content of any kind — from images, video, audio, or 3D art, to popular memes. Recent examples include the relentlessly iconic nyancat gif originating from 2011, digital artwork from Grimes, and the first-ever tweet from the social media platforms founder — all of which were sold for upwards of 500,000 USD. The nonfungible part of the acronym lets us know that the content, in whatever form or medium it exists, cannot be equally exchanged for other content. The idea is that each NFT is unique.
Why do they exist?
As NPR reported, NTFs essentially give the buyer “a certificate of authenticity” for whatever digital content they purchased. Like the collectors of physical art, those who buy NFTs are the only persons with access to the authentic original creation, even when people produce replicas (by right-click saving the same digital content, in the case of JPEG NFTs).
Who are they for?
NFTs have received a great deal of positive reception from digital artists and content creators. Since NTFs act as the original proof of purchase or stamp of authenticity for digital creations, content creators can make a profit in exchange for collectors having exclusive rights to the authentic source.
How are they connected with Blockchain?
NFTs are related to blockchain as a ”unit of data stored on a digital ledger,” or coding, known as a blockchain. The relationship between NFTs and blockchain manifests itself as coded security that validates the authenticity of digital content. This qualifies the digital content to be called an asset and part of the cryptocurrency “family,” so to speak.
How to buy/sell them?
Those interested can buy or sell NFTs on websites like OpenSea. OpenSea and other NFT selling platforms require users to have an Ethereum wallet. In fact, Ethereum — the second-largest cryptocurrency (Bitcoin being the first) — is an essential part of participating in the NTF market because it is required to buy and sell NFTs. The exchange rate between one (1) Ethereum and real money is about 3,500 USD.
When it comes to selling NFTs, the start is as simple as signing up for an account with an NFT market platform, like OpenSea, and uploading (or “minting”) your digital content. However, the subsequent step is where the investments begin. After being prompted to connect one of the supported Ethereum wallets (such as Rainbow or Coinbase ), you must use that wallet to purchase Ethereum (with real money) — even as a content creator — in order to participate in the buying and selling of NFTs. Step-by-step how-tos explain that there are fees for making your content available as an NFT which need to be paid with Ethereum. You must buy into one cryptocurrency (Ethereum) in order to partake in the market of another (NFTs).
Will they last/Are they a worthwhile investment?
That’s really for you to decide. Much of the praise for NFTs lies with digital artists who want to showcase and sell their creations. However, many spectators are critical of them, often asserting that NFs are temporary and popular only within their bubble.