How NFTs Work and Why Everyone Is Obsessed With Them

In March 2021, Injective Protocol bought a painting by Banksy. The painting with the inscription “I canʼt believe you morons actually buy this shit” cost the company $95,000. After the purchase, the painting was burned and turned into a blockchain-based token that was sold for $380,000. Here’s what’s going on in the world of crypto-art, and if you need to get into it.

What Are NFTs

NFT is an acronym for Non Fungible Token. These tokens exist on the blockchain just like cryptocurrencies, but differ from digital coins about as much as collectible coins differ from regular money.

Let’s suppose Tom borrowed $10 from John. Now Tom can repay his debt and return two $5 bills, five $2 bills, and ten $1 bills to his friend. The value of the money won’t change from this. In this case, the $10 bill is a replaceable object.

If they were collectible $10 bills, this situation would not be possible. Each such bill has its own unique value and is one of a kind. There is no way to exchange it for another one of the same kind. Each individual NFT has the same uniqueness – only expressed digitally.

The number of NFTs for a particular object is limited. You cannot divide an NFT into parts either. The token itself does not store images or music – only precise characteristics that unambiguously point to the object.

NFTs also have features in common with cryptocurrency. They can be bought and sold, stored in a virtual wallet or transacted with. Tokens can also be an investment asset.

Various objects can be turned into NFTs. Works of art are most often tokenized. This can be not only multimedia, but also digitized copies of real objects. In addition to art in NFT virtual clothes, music, videos, collectible images, such as limited edition photos of celebrities, sets of cards of sports clubs, game characters and objects from games are popular. If you try hard, you can even sell a screenshot of the jackpot hit in PlayAmo casino Australia. The main thing is to show your imagination.

NFTs can be sold and bought on special online venues – NFT marketplaces, here are the most famous of them: Opensea, Rarible, Foundation, AtomicHub, Binance. They work like Amazon: sellers put NFTs on the marketplace and wait for offers from buyers.

Who Believes in the NFT Marketplace

NFTs have already migrated from a geek theme to the mainstream. Many art lovers and collectors have realized that storing and transporting real paintings is cumbersome and expensive. But in the digital world, everything is easier. It’s very easy to prove that there can’t be a second painting like that, unlike in the physical world. If an artist says that he will release only one such work, then everyone can check and make sure that there are no copies.

In March 2021, auction house Christie’s sold The 5,000 Day Selects as a token work for $69.3 million. Behind Christie’s in the NFT-space pulled other auction houses, representatives of the traditional art market, artists and celebrities.

How to Create an NFT

The entire NFT market can be divided into two large parts: gaming tokens and NFT on art objects. Approximately 83% of NFT transactions are gaming assets. Famous authors find it easiest to make money by selling NFT of their works.

First steps in the NFT space for content creators

1. Start Twitter and Instagram accounts.
2. Create a cryptocurrency wallet on Metamask, Temple, or Kukai.
3. Sign up for a marketplace at Opensea.io, Rarible, or Mintable by connecting a wallet.
4. Create an account on crypto exchange (Binance, Coinbase), buy ETH or XTZ and make a deposit to your wallet.
5. Now you can drop your work at the auction. If you put someone else’s work, be sure to specify the author in the description to NFT.

You don’t have to be a digital artist or designer to create your own piece of crypto art. You can simply scan a piece of paper or the surface on which the drawing is made and release your token. Even this article can become an NFT if you make an image out of it and upload it to the auction site.

Fad or profitable sector? Meet the first billionaires of the NFT market