Newbies Guide to NFTs
If you follow the ongoing trends regularly, you might have heard about the NFT craze and how this trend has taken well-known personalities into investing in NFTs. From multi-million projects to providing whole new mediums to artists to claim their royalties, NFTs have done it all. This guide on NFTs will provide our Crypto Newbies a complete understanding of the new star of the decentralized sphere.
Before I dive further into the NFT saga, I request the readers of this guide to first understand the term NFT (Non-Fungible Token).
What are Non-Fungible Tokens?
Take out the Dollar (or any bank note) in your pocket right now. If you give me the bill and I give you one from my wallet, you will not be able to tell the difference in terms of value. A 1 Dollar bill will always be equal to another Dollar bill. This makes them indistinguishable, or fungible.
Non-fungible tokens, on the other hand, are one of a kind and you cannot exchange two NFTs that easily.
NFTs can be defined as a cryptographic token that identifies or has an associated value of an asset. It represents digital assets like music albums, paintings, memes, and posters, etc. On top of these, it also represents real-world assets like property, land ownership, and cars.
NFTs provide freedom to the audience to create their assets having their ownership and the asset’s authenticity. A modern and unique way to exchange assets within a recognized asset class of the crypto world. Non-fungible tokens are also indivisible like paper money and have their protocols for trade purposes. An NFT is a new medium to invest in art for the folks of the digital world.
NFTs today have found a novel use in the gaming industry. Today GameFi platforms are integrating the technology into their developments. Any and all items within the games, be it the characters themselves, the items they wield (weapons, armor, wearables etc) to other items such as vehicles and real estate, all are made into NFTs. The use of the non fungible tokens ensure that each entity is kept unique (or even made scarcer with other properties) and makes them sellable or exchangeable on marketplaces, just like regular cryptos. This adds an element of ownership not only for the users, but the race to gain these items make them valuable in the long run, opening up yet another income stream.
Characteristics of NFTs
- Permanent in Nature
- Immune to replication
- Cannot be counterfeited
Where can you Invest NFTs?
You can invest in NFTs in sports and gaming cards, extending your investment into photos, images, or GIFs. Recently people are investing in the music and art of their favorite artists and musicians and now this hype is touching virtual real estate and clothing.
What Makes an NFT Work in the Decentralized World?
NFTs are unique because of some distinguishing features, for instance, NFTs allow people to define assets by providing metadata that describes and distinguishes these assets from other investments. One of the most prominent features which make NFTs a key player is their rarity or their scarcity from other crypto-based initiatives.
Since NFTs are blockchain assets, they gain the same properties such as being immutable. An owner of an NFT is able to easily showcase the proof of ownership, making it difficult for people to swindle others by making false claims to assets they don’t own. Similarly, a transfer of NFTs is secured by the chain, making transfers easy.
Lastly, with online marketplaces and direct selling, people such as artists and musicians have found a new way to directly interact with their fans, saving money that would be otherwise used to pay off middlemen such as art curators or music labels, thus saving money and increasing sales.
How Newbies Can Buy NFTs?
Buying an NFT as a newbie to crypto doesn’t have to be complicated. The thought of venturing into the unknown can be a bit daunting, but it is easier than you think. Here are our simple and easy steps to buying your first NFT:
- Find the NFT: Search around the internet and popular NFT marketplaces to find the NFT you want. Once located, see what the owner’s demand is. Be particular about the blockchain the NFT is using. Popular ones are either Ethereum, Binance Smart Chain or Polygon (Matic) based.
- Purchase Some Crypto: If you don’t have the desired cryptocurrency of the seller, you will need to get your hands on some. If you already have any kind of crypto tokens or coins, check out the crypto exchange you use and buy it from there.
- Head Over to the Marketplace: An NFT marketplace can be a centralized one or decentralized. If the marketplace is centralized, you probably need to deposit your tokens there first. If it is a decentralized marketplace, look at the compatible wallets they use like MetaMask and transfer the tokens there.
- Buy Your NFT: One the marketplace, you can simply go to the sales ad of your NFT you selected and buy it. It’s that simple!
Who is leading in the NFT Space?
When we talk about NFT marketplaces several names are leading this madness. To highlight these names and their work for NFT adoption, we have listed some of the prominent players.
NBA Top Shot
It is a marketplace for licensed NBA collectables for people who want to invest their money in NBA-based NFTs. These items are unique as they are NBA-oriented and allow NFT users to purchase basketball cards. These cards are digital and interactive rather than the traditional ones. They include in-game highlights of the featured players. The highest sold card on NBA Top Shot was of Lebron James, featuring a clip of the player dunking on the Houston Rockets and was sold for over $200,000.
OpenSea
The largest of all NFT marketplaces, anyone can create an account and mint their NFTs or buy from existing owners. The marketplace holds some of the most famous NFTs such as Weird Whales and Bored Ape Yacht Club.
Nifty Gateway
An NFT marketplace owned by the crypto exchange Gemini, it works with popular artists such as Steve Aoki, Grimes, 3LAU, and many others to launch artwork on the decentralized marketplace. The platform also has a secondary marketplace that allows collectors to resell the artworks they have purchased previously.
SuperRare
A social network for NFTs, where each article on the platform is rare, and users can buy and sell these original pieces on the website. The network operates with Ethereum’s blockchain protocol and users have to fund their account with ETH tokens to make purchase possible.
Pros and Cons of NFTs
It is clear by now that NFTs are beneficial and will provide multiple opportunities to digital creators in the future, previously it was extremely difficult to verify the authenticity of digital art pieces, NFTs made it possible for us to verify digital media with a click. However, Not all NFTs are valuable, and there are some clear advantages and disadvantages of NFTs:
Pros
- Non-fungible tokens (NFTs) have made it easy to buy and sell digital media online for all digital creators.
- These tokens are blockchain-based which makes it easy to verify authentic artwork and digital ownership.
- NFTs can make collectables like trading cards more interactive and engaging for the crypto community.
Cons
- NFTs can get very high in value and for many people, it is not possible to spend so much money.
- Most NFTs today that fetches high value are little more than digital images, which can be copied off of the internet, making a use case of no value.
- Artists or creators who plan to mint several NFTs find that the cost of minting itself is too much, making them think twice about generating the unique tokens as they have to give upfront money and with no sure shot sales, this can dent their pockets.
- Like cryptocurrencies, NFTs are bound to their native chain and if anyone wants to buy it, they have to switch over to the compatible chain.
Concluding Thoughts
The NFT market is booming and there is no stopping its madness across the globe, since the blockchain industry is always coming up with innovative ways to engage the crypto community, NFTs have a lot of potential. However, it is important to understand the basics of blockchain and as a newbie, once you understand the blockchain do’s and don’ts it will be pretty easy for you to get what NFTs mean for the creator economy and where investors stand.
Lumi World is a decentralized gaming platform that is heavily using NFTs in its ecosystem. A rich storyline, the world is saved from complete annihilation and extinction of the human race with the discovery of a non-corporeal element Lumius. Embedded in plants, it gives new life to agriculture. Abundance of food collapses the human desire to wage wars over resources. Becoming primarily an agrarian society, Lumiers (as now humans identify themselves) can grow crops or visit the Dream City to live out their lives in peace and enjoyment.
Within all this, the lands, plants, seeds, buildings and other in-game items are all NFT items. If you play the game, you get to own the assets, which you can trade or exchange in the marketplaces, upgrade (to make them rarer and scarcer) and even build upon these. In the end, the NFTs are yours and you can always sell these for profits.
NFTs make virtual goods and viral content rare and fun for both the creators and the buyers. It will not be so far when common crypto users will have the power to create their revolutionary NFT projects on the Blockchain.
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