2. What Are NFTs?
NFT stands for Non-Fungible Token, a type of digital
asset that is unique and non-interchangeable. It is a
type of cryptocurrency that exists on the blockchain,
which is a secure, distributed ledger technology. NFTs
are used to represent digital art, collectibles, and other
digital assets that have value.
NFTs are different from other digital assets because they
are not interchangeable. Each NFT is unique, which
means that it can be used to represent a single item,
like a digital collectible or artwork. This makes them
ideal for digital asset ownership and trading.
3. How Does NFTs Work?
NFTs are powered by blockchain technology and are
based on digital tokens that are stored on a distributed
ledger.
These tokens are cryptographically secured, immutable,
and tradable on a digital marketplace, allowing anyone
to create and own digital assets.
5. What are the Benefits
of NFTs?
NFTs have a number of benefits, including the ability to verify
ownership and control the transfer of digital assets. NFTs are
also immutable, meaning they cannot be changed or deleted
once created. This makes them a secure and reliable way to
store and trade digital assets.
NFTs also provide an incentive for creators, as they can be used
to reward creators and generate revenue from the sale of digital
assets. This is especially useful for digital artists, as it allows
them to monetize their work and gain recognition for their
creations.
6. Can Anyone Create NFTs?
Technically, anyone can create NFTs, however, that does not mean
that all NFTs will get a high value during the sale.
Many NFT marketplaces allow any user to create their own NFTs,
but the users need to have a reputation within the community to
earn a good value for their work.
A higher social media presence and a fan base are the highest factors
in determining an NFTs value.
7. What Token Standard Does NFTs Use?
Ethereum token standard is the most common token standard
that NFTs use now. Typically, ERC-721 and ERC-115 token
standards are widely used to create various NFTs.
Some early-stage NFTs use a hybrid ERC-20 token standard
to create NFTs. Unfortunately, to sell them you need to wrap them.
Other than Ethereum, EOS, FLOW, Tezos, etc. also offer a specific
token standard for developing NFTs.
8. Use Cases of NFTs?
NFTs can help digital artists or any type of artist to fight plagiarism as
they can tokenize their creations, which can't be copied.
Luxury goods can be verified making them NFTs and giving ownership to
the buyer only.
Manufacturing companies can tokenize their products in order to offer
provenance to their consumer base.
9. Use Cases of NFTs?
Institutions can offer NFT based certifications and licenses, to
authenticate a person's educational background.
NFTS can stop counterfeiting tickets and merchandise issues within the
sports industry.
Games can tokenize in-game items for players and give them ownership
over those items.
11. Popular NFT Projects
Chromie Squiggle : Chromie Squiggle is a fully on-chain, generative art collection created by
Snowfro. The art is easily identifiable and is simplistic and the collection has strong historical
significance as a first mover in the generative art space. The collection has a total supply of
9,734 NFTs, each with varying sizes, colors, type of squigle.
CryptoPunks : CryptoPunks is a collection of digital art collectibles. Here, every punk is a
unique character with a similar art style(24x24 Pixels).
NBA Top Shot : This is an officially licensed NFT project that allows collectors to own digital
"moments" from NBA games. These moments are essentially short video clips of players making
noteworthy plays, and their rarity and significance determine their value.
12. Popular NFT Projects
Decentraland : Decentraland is a virtual world on the Ethereum blockchain, where users buy,
build, and monetize 3D content and applications. Users own and control their virtual land,
creating an immersive experience for participants, and democratizing online ecosystems.
Axie Infinity : This is a blockchain-based game that allows players to collect, breed, and battle
creatures called Axies. These creatures are NFTs, and their rarity and attributes determine their
value.
Bored Ape Yacht Club : This project features a collection of 10,000 unique hand-drawn apes,
each with their own distinct traits and personalities. The project also includes a community of
NFT collectors who are part of an exclusive club with various benefits.
13. Where to Buy and
Sell NFTs?
SuperRare
Rarible
Nifty Gateway
Mintable
OpenSea
There are many NFT marketplaces where
users can go to buy and sell NFTs. Some of
these are -
14. Where to Buy and Sell NFTs?
To buy and sell on NFT marketplaces, users need to create an account and connect their wallets
to the account.
Different marketplaces have different supported cryptocurrencies. The most popular currency
currently is Ethereum. Users can use Ethereum to buy NFTS.
To buy Ether/Ethereum or any other crypto, users have to get a blockchain wallet and fund it
through a fiat-to- crypto currency exchange.
15. List of Popular NFT Sales
1. Beeple Collection _ Every day: The First Five Thousand
Days – $69 346 250
"Everydays: The First 5000 Days" is a non-fungible token (NFT)
artwork created by the digital artist Beeple (real name Mike
Winkelmann). The artwork is a collage of Beeple's digital art created
every day for 13 and a half years, totaling 5,000 days. It was sold at a
Christie's auction for $69 million on March 11, 2021, making it the most
expensive NFT artwork ever sold.
2. Human One – $28 985 000
“Human One” is the second most expensive artwork of Beeple, who is
second in the ranking of artists with the highest NFT sales volume.
Auctioned through Christie’s for $28.98 million, “Human One” is a life-
size 3D NFT that features an individual sporting a spacesuit that
changes color (bronze or silver) according to the artist’s wishes. Beeple
told he will upgrade this artwork throughout its life, so that this piece of
art remains dynamic and crosses time.
16. List of Popular NFT Sales
3. CryptoPunk #7523 – $11 800 000
Previously the highest in price of the cryptopunks collection, the value of
cryptopunk #7523 comes from the fact that it has extremely rare
characteristics: it is the only crypto that wears a surgical mask, which is
eminently reminiscent of the pandemic, and it is one of the 9 super rare
aliens. And in art, the rarer and more unique, the more expensive it is.
4. Jack Dorsey’s first tweet – $2 900 000
For this NFT presenting itself as an important technological relic, the
auctions were still underway since March 2021. This is the very first
tweet in history, made by Jack Dorsey who is the CEO and founder of
the social network Twitter.
Sina Estavi submitted this NFT. He is an entrepreneur and CEO of
Bridge Oracle. It was at the staggering sum of 2.5 million dollars and
someone purchased it for 2.9 million dollars. The price has improperly
dropped since then.
17. Why are NFTs So Popular?
Users can lose, break or destroy physical assets or collectibles,
but NFTs can't be destroyed or stolen. Once a user gets
ownership, they can own it forever.
NFTS are a different take on digital assets, which is quite
innovative and easier for non-technical people to understand and
take part in.
No one can duplicate NFTS, thus, third parties can't misuse the
intellectual property of an artist.
18. How Safe are NFTs?
The security level of NFTS is similar to any type of digital asset and very close
to cryptocurrencies.
All of the NFTs are stored on the blockchain platform where the ledger is
immutable, making it impossible to delete or alter the ownership.
Blockchain offers robust security protocols and eliminates the scope of cyber-
attacks.
19. What Are Alternatives to NFTs?
NFTs are not the only way to invest in digital assets. There are a
variety of other options, such as traditional cryptocurrencies,
stablecoins, and tokenized assets. Each of these options has its
own risks and benefits, and it is important to research each
option before investing.
It is also important to remember that NFTs are still a relatively
new asset class, and therefore it is important to be aware of any
potential risks before investing. It is also important to be aware
of the fees associated with buying and selling NFTs, as well as
any taxes that may be due.
20. Conclusion
Non Fungible Tokens (NFTs) are a unique and exciting asset class that
allow users to collect and trade digital assets. They are backed by
blockchain technology, providing users with a secure and reliable way
to store and trade digital assets. However, it is important to be aware
of the risks associated with investing in NFTs, as well as any fees or
taxes that may be due.
It is also important to remember that NFTs are still a relatively new
asset class, and therefore it is important to do your research and
understand the risks before investing. There are also a variety of
alternatives to NFTs, such as traditional cryptocurrencies, stablecoins,
and tokenized assets, and it is important to understand the risks and
benefits of each before investing.
