An Introduction to NFT: What Should You Know
NFT, non-fungible token, is the newest trend in the vast world of cryptocurrency. This currency is pretty inventive and unique in its own way. So don’t approach NFT as one of your standard cryptocurrencies. But how to approach this precious art piece which dwells in our digital world? Let’s dive in to this brief explanatory 101 guide, which will hopefully answer all your questions.
What is an NFT ?
NFT is a non-fungible token. It can be any digital file. A music, a gif, an art, a game skin, a real world item such as tickets and signatures, collectibles, even a tweet: In March 2021, first tweet of Jack Dorsey (co-founder of Twitter) was auctioned for charity. Crypto entrepreneur Sina Estavi bought the tweet in the form of NFT for $2.9 million dollars.
WHAT DOES NON FUNGIBLE MEAN?
The meaning of non-fungible here is, and basically our magic trick here, a fungible token is something you can replace with the item of the same kind. Let’s take payment tokens for example, popular kid in the school Bitcoin (and the most expensive one), or Etherium, Tether, USD Coin, DogeCoin... These all have something in common: They are fungible tokens. They are not unique and one of a kind. You can trade a DogeCoin with another DogeCoin, and end up with the same equation in your hand. But on the other hand, a non-fungible token does not work like that. It is totally inimitable. They can neither be replaced nor replicated. Each of these NFTs is a work of art in its own right. A Mona Lisa can’t be traded for another Mona Lisa, as there is only one. This is the meaning of non-fungible, and the key piece of what makes NFTs appealing and fun.
Are NFTs Safe?
Basically, an NFT is an encrypted token stored on a blockchain digitally. When you buy one, you will get a private key to store your NFT in a digital wallet that supports NFTs. This is like storing a painting in a safe that only you have the key to open it. Scammers will try to get their hands on your private key. As long as you have it, you are safe.
And yet, another question comes to mind in the security context: if you take a screenshot of an NFT, does it mean that you can use it?
Let’s take another example, The Starry Night. If you were to take the highest resolution printing of this beautiful painting possible, and put it in a frame to eventually sell it in an art gallery, you would get no dime. Even put in jail for fraud. The same goes for NFTs: just because you took a screenshot doesn’t mean it is yours.
When Did It Start?
In 2014, digital artists Kevin McCoy and Anil Dash minted Quantum, the first known NFT. Quantum was a short clip made by McCoy’s wife. The NFT was sold for 4 dollars later during a conference at New York Museum. NFT was referred as monetized graphics by McCoy And Dash.
The first NFT project, Etheria was launched in 2015 at DEVCON1 in London by Etherium.
In 2017, a game called CryptoKitties developed by Canadian Studio Dapper Labs sold kitten skins as NFTs for over 500 ETH and made it widely popular among gamers, making NFTs gain more and more popularity. This software made it possible to buy, sell and collect virtual cats based on blockchain.
Eventually, NFT growth rapidly increased in 2020 and 2021. In 2021, more than $200 million was spent on NFTs in only three months.
In 2021, Collins Dictionary’s Word Of The Year was NFT, described as: ‘non-fungible token: a unique digital certificate, registered in a blockchain, that is used to record ownership of an asset such as an artwork or a collectible.’
The Most Expensive NFT
The most expensive NFT is The Merge, made by digital artist Murat Pak, which was sold for almost 92 million dollars in December 2021. The Merge consisted of a total of 312,000 shares bought by 28,983 people. Each of these shares ( each unit is an NFT, of course)
was sold from $575 at the start, but gradually it increased by $25 dollars every six hours. Ultimately, The Merge was sold for $91.8 million.
Another Example is the second most expensive NFT, called Everydays: The First 5000 Days, made by digital artist Mike Winkelmann, known as Beeple, was sold for $61.9 million.
The NFT consisted of a collage of 5000 photos taken over more than thirteen years.
How to Buy, Make And Sell NFTs
First of all, NFTs are acquired with cryptocurrencies, especially with Etherium. Even though some markets use fiat currencies, in most cases you won’t be able to use a credit card or cash to buy NFT directly.
You can make your own collections, sell or buy NFTs via our first option: OpenSea.
OpenSea is the largest and the first ever P2P NFT market place, you can use ERC-115 and ERC-721 tokens in this market. Another advantage of this platform is the mining tool, allowing digital creators to develop their own collections.
OpenSea takes 2,5% commission for every transaction, content artists can also choose the commission rate up to 10% per sale if they would like to.
Some of the other popular marketplaces include LarvaLabs, Axie Marketplace, Rarible, Nifty Gateway, Mintable, Foundation and Theta Drop.
The Future Of NFTs
In the world of digital era, where all things change, grow and move rapidly , it will be hard and controversial to predict the future of a crypto token. However, I believe some assumptions can be made by looking at the latest news.
In summary, NFTs have collapsed alongside cryptocurrencies such as Bitcoin and Etherium. NFT has entered a downfall. According to DappRadar (a large data analysis company) , since June 2021, crypto bazaar recorded its first month to set under $1 Billion in sales. Another collapse comes from the largest NFT marketplace, OpenSea. Its volume has decreased by %75 in four months and still looks forward to see the lowest levels since 2021. Financial experts say that it has come to a dead end but who knows, what the future holds for this digital art piece.