If you are new to the crypto world, chances are you’ve never heard about NFTs — and if you have, you can’t seem to understand the madness. We feel your pain, and that’s why we have used up several hours to assemble this ultimate guide that explains every bit about NFTs you should know.
Usually, most articles like this will begin by exclaiming that NFTs are Non-fungible tokens (and they are), but that probably leaves you more confused. So, we won’t start with that. We will take a more straightforward approach by defining what an NFT is in simple terms; then, we’ll talk about the Non-fungible term.
What is NFT?
NFT is a cryptographically unique digital asset. It may represent ownership over a digital or physical asset, though it doesn’t have to be one-to-one. It can also be used as a tradable asset on digital marketplaces.
You can use NFTs to represent just about anything, from artwork to music, games, physical items, and other digital collectables. NFTs are, without a doubt, one of the fastest-growing industries in crypto, and the trend doesn’t seem to be going away.
Fungible vs. Non-fungible Tokens
Now let’s get back to what fungibility and Non-fungibility mean.
A fungible asset refers to an asset that can be replaced by another identical one. For example, the dollar is fungible. If you lose one, or someone breaks it, you can easily find another one.
Non-fungible assets, on the other hand, are not interchangeable. They are unique and cannot be replaced by another identical asset. For example, a Picasso painting is non-fungible. If you lose it or someone damages it, another Picasso cannot replace it.
In a nutshell, non-fungible tokens have a distinct value, and no two items are the same. This is one of the reasons why NFTs tend to surge in value.
The Trending World of NFT Art
Since the advent of NFTs, digital art has become the biggest or most popular aspect of NFTs. Creators and graphic designers have been cashing in on their creations by minting copies of their work and claiming ownership. If the word minting flew over your head, it means the process of turning something into an NFT. More on how to create NFTs below.
Before NFTs, if you created digital art and shared it on the internet, chances are it would go viral. But you wouldn’t be able to do much with it. All the likes, comments, and other forms of engagement would be for nought because you couldn’t sell it or even give it away as a gift.
Creators have been making a killing out of their digital art by selling it for thousands of Dollars. But with NFTs, all that has changed. Now, if your art goes viral, you can quickly turn it into an NFT and sell it on a digital marketplace.
Now that we have mentioned the digital marketplace, it is only fitting to explore NFT marketplaces and why you need them – if you plan to participate in the NFT crypto space.
What is an NFT Marketplace?
Crypto marketplaces are sites where users can buy, sell, and transact cryptographically unique digital assets in the form of NFTs. You could think of NFT marketplaces as Craigslist for unique digital assets.
These websites are platforms where people can trade NFTs, similar to how stocks are traded on the stock market. The difference is that NFTs are not regulated by any government or financial institution. This makes them a Wild West of sorts, where anything goes.
Why You Need an NFT Marketplace
If you want to buy or sell NFTs, you need to have a place to do it. This is where NFT marketplaces come in. They are the go-to places for buying and selling NFTs.
Most of these marketplaces are decentralised, meaning no governing body oversees them. This gives users a high degree of freedom when trading NFTs. It also makes them more secure, as no one can shut them down.
You might have heard of Cryptokitties from the news lately and just how they clogged the Ethereum network a few months ago. Cryptokitties is an NFT game that allows users to buy, sell, and trade digital cats.
It is perhaps the most popular NFT, inspiring many similar games. Many of these new games are on their way to becoming just as popular as Cryptokitties. (More on the most popular/best-selling NFTs below)
If you want to get in on the action, you need to have a place to do it. This is where NFT marketplaces come in.
The Best Marketplaces to Buy/Sell NFTs
We were not going to leave you to your fate – opening another tab to discover the best NFT marketplaces to sign up with. We have a shortlist, and we selected these four exchanges based on security, simplicity, popularity, and generally the best experience.
OpenSea
OpenSea is one of the most popular NFT marketplaces. It allows users to buy and sell a wide variety of NFTs, including digital art, game assets, and collectables.
One of the things that make OpenSea stand out is its user interface. It is user-friendly and easy to navigate. You can even make trades with other users from the chatbox on the right side of the page.
OpenSea is also one of the most secure NFT marketplaces. It has implemented 2-factor authentication, and it employs a variety of other security measures to protect users’ data.
It is also worth mentioning that OpenSea has a very active community. If you have any questions or want to learn more about NFTs, this is the place to be.
Mintable
Mintable is a newer NFT marketplace, but it has quickly gained a following thanks to its user-friendly interface and wide selection of NFTs.
Mintable is a decentralised marketplace, meaning that there is no central authority that governs it. This gives users a high degree of freedom when trading NFTs. It also makes it more secure, as no one can shut it down.
On Mintable, there are three categories of items: gasless, normal, and printable. The platform charges 2.5%, 5%, and 10% fees when they sell on normal, gasless, and printable items.
Rarible
Rarible is another decentralised NFT marketplace that allows users to buy, sell, and trade rarities. This means you can find some one-of-a-kind items on the platform.
It is especially good at allowing users to trade NFTs, which may not always be possible on other marketplaces. This is because Rarible has a huge selection of NFTs, and it allows users to trade them for other NFTs and tokens.
The Rarible platform makes it easy to create NFTs; however, there is a minting charge, and because it is an Ethereum-based NFT marketplace, the gas fee may be substantial on a busy day. On the other hand, it is the best-in-class platform for generating large royalties of up to 30%.
The top-selling NFTs and trendy collections are displayed on the homepage when you first visit Rarible. This allows visitors to immediately catch a glimpse of what’s happening in the marketplace.
Foundation
Foundation is one of the best marketplaces to buy and sell Ethereum-based NFTs. It makes it much easier for users to find the right NFTs.
The Foundation marketplace has a wide variety of categories, including art, digital collectables, gaming assets, and stickers. It also offers a unique feature that allows users to buy and sell assets on their phones using QR codes.
Foundation charges a small fee for each sale or buy order. While this may not be a huge sum, it is one of the most significant fees among NFT marketplaces.
Which One to Choose?
All of these marketplaces have their strengths and weaknesses. It ultimately depends on what you are looking for and what you want to achieve. We recommend taking a more in-depth look and checking out different NFTs offered there before deciding.
Also, you should always be aware of the security measures in place in any marketplace before you decide to hand over your money.
How to Buy NFT Tokens
Now that you know what NFTs are, their potential, and top marketplaces, let’s now see how to buy them. You will have to complete a few steps before buying an NFT. See the guide below:
1. Choose an NFT marketplace: This is the first and most crucial step. You will need to find a reputable marketplace that offers a wide selection of NFTs.
2. Create an account: You must create an account on the chosen marketplace before buying any tokens.
3. Fund your account: You will need to deposit some funds into your account before you can buy any tokens. Most NFT marketplaces only accept ETH tokens as payment because most NFTs are Ethereum-based tokens. You can buy Ethereum with a cryptocurrency exchange account if you already have one. If you don’t, consider opening a MetaMask wallet.
4. Find the NFT you want to buy: Once you have deposited funds into your account, you can start browsing the marketplace for the right NFT.
5. Buy the NFT: Once you have found the right token, you can click on “buy” and complete the purchase. Or participate in the auction if the creator has set it up that way.
6. Send the NFT to your wallet
When it comes to finding the perfect token, there are two more things worth considering:
- What are the current market conditions?
- What is the token’s use case?
Both of these factors will affect the price of the token. For example, is the token experiencing a massive surge or decline? Or does the token have only one use case, but no one has bought it yet?
These factors will also influence the token’s price once it is transferred to your wallet.
Lastly, always do your research and never invest more than you can afford to lose.
How to Create an NFT
If you would rather become an NFT creator and list your tokens for sale on these exchanges, use the following steps to create your NFT.
Choose an Item
Decide what artwork, music, collectable, or any other creation you want to turn into an NFT. This could be anything, as we have hinted severally. But ensure it is something people would splash some cash for.
Create the NFT
This is a crucial step in NFT creation. Create a token that can be bought and sold on your platform of choice. If you already have the item, upload it on your preferred marketplace, give it a name, and a befitting description, and set up a Buy Now price or auction.
List and Promote Your NFT
This is the last step. After your token creation is complete, share it on social media and get people talking about it. You could also do some online marketing to get more traction.
Don’t rely on the exposure of the marketplace you choose, as these vary widely from platform to platform. And it’s a tall order considering your NFT is not the only one up for sale.
Two Ways to Sell Your NFTs
Most exchanges allow users to sell their NFTs using two different methods. The first one is through a fixed price, and the other is through an auction. Let’s go into more detail.
Fixed Price Selling Method
On fixed-price selling, you will need to put a Buy Now price on your item. This means buyers can buy it instantly for the price you set. If there are no buyers, the item will remain on the marketplace for as long as you want it to. But if someone buys it, the sale is final, and the token is transferred to the buyer.
Auction Selling Method
The auction-selling method allows you to put your token up for sale and let the market decide the price. This means the token will start at a certain price, and buyers can place bids until the auction is over. The highest bidder wins the sale and the token. And this method gives you some control over how much you want to sell your item.
Most Popular and Best-selling NFTs
As we come to the end of this article, we think it is an excellent idea for you to know some of the most popular NFT items that have contributed to the exponential growth of the NFT crypto space. Maybe you might find some inspiration from these winners. Here we go.
CryptoKitties
CryptoKitties was the first NFT game that became popular. It is a collectable game where players can collect, breed, and sell digital cats. The game is built on the Ethereum blockchain, which allows players to buy or sell their collectable cats in exchange for ether(ETH).
CryptoKitties users have done transactions worth millions of Dollars since Larva Labs first introduced the NFTs. The game’s popularity can be seen by the fact that it has a massive number of users.
Everydays: the First 5000 Days
This is a collectable art piece created by Mike Winkelmann, known professionally as Beeple. Winkelmann made the piece as a collage of 5000 digital photos for his Everydays series. In 2021, Christie’s sold its associated non-fungible token (NFT) for $69.3 million. It is the most expensive NFT to date.
Singapore-based programmer Vignesh Sundaresan, a cryptocurrency investor and originator of the Metapurse NFT project, purchased Everydays.
CryptoPunks
CryptoPunks was one of the first digital collectable items. It is a series of parody 8-bit characters modelled after punk culture.
The CryptoPunks are a collection of 24×24 pixel art images featuring misfits and eccentrics in an 8-bit aesthetic. There are exactly 10,000 of them, each with their seeming personality and distinct set of randomly determined characteristics.
Over 8,000 sales had occurred in the previous 12 months as of April 2021, with an average sale price of 15.45 ether ($30,412.40). The total value of all sales is 127,360 ether ($251,620,000), and it’s increasing every day.
Notably, CryptoPunk 7804, a pipe-smoking ‘wise alien,’ was sold for $7.5 million on March 11, 2021, the highest price ever paid for a Punk at the time. The next day, another sale broke the record.
Beeple’s CROSSROADS
Beeple’s Crossroads is another NFT that was sold for $6.6 million. It is a digital art piece where Mike Winkelmann, known as Beeple.
CROSSROADS is a non-fungible token (NFT) project verified via blockchain technology. The artwork comprises an encrypted image or video file accompanied by a digital signature that cannot be replicated, assuring buyers that their purchase is genuine.
Conclusion
NFTs are still a relatively new concept, and there is a lot of potential for growth in the market. With more and more people becoming interested in cryptocurrency and blockchain technology, the NFT market is sure to grow. So don’t miss out on this chance to get in on the ground floor of this up-and-coming market.
What are you waiting for? Start creating your NFT today and make some money. Your NFT could be one of the best-selling ones, just like the examples cited above. As they say, you never know until you try.
