Basics to Know About NFTs

Today everyone has at least once heard about NFTs. Although this format appeared in 2015, its popularity has caught up only in March 2021.

Then at Christie’s auction, one of the artist’s Beeple paintings and the NFT tokens tied to it were sold for $69.3 million. To this day, this is a record sum, and it’s justified, as Mike Winkelman painted his creation daily for 5,000 days. Let’s find out what it is and how it works.

NFT: Definition

NFT is a unique token that cannot be exchanged or replaced with a similar token.

By their nature, tokens exist in a blockchain environment. The latter is a huge database stored on a large number of computers at once. The Internet we are used to is synchronized with nodes in the form of servers or ISPs, from which it’s distributed to all devices. Blockchain, on the other hand, has no branching, it’s a single system.

A token is a record that, in the digital world, replaces the securities we are used to. It’s written in a blockchain register. Most tokens are fungible, meaning they can be equated with any currency, including crypto. They can also be exchanged with other people and “sold” for currency.

But NFTs cannot be equated with anything. For example, a painting by Leonardo da Vinci is not equal to a painting by Pablo Picasso, and a recording of “We Will Rock You” by Queen cannot be compared to any Eminem track. Each of the format’s representatives is unique and is in a single copy in the blockchain database. Along with it, information about all transactions related to the product is securely stored: who bought it, who created it, when and for how much it was bought, etc.

What to Sell in NFT

You can transfer and sell to NFT: a book, text content, audio recording, music, video, image, 3D model, and even a screenshot from The main idea – any digital product should be unique and come from the first person.

Today non-fungible tokens attract the attention of collectors, who are constantly looking for values, gamers – in an eternal search for weapons, skins, etc., artists, and other people.

Some notable examples of media personalities who already translated and sold their works in NFT are: singer Grimes sold an image from his video for $5,800,000 just 20 minutes after the opening of sales, DJ 3LAU was the first who sold an entire album and got $11,600,000 for it, Russian artist Pokras Lampas sold a photo of his work for $28,000. Rapper ASAP Rocky and singer Weeknd also sell their tracks at NFT.

What to Do After Creating an NFT

After creating a product in the NFT format, it’s enough to find a platform where it can be sold profitably. There are a lot of them now, but most of them are narrowly focused platforms, where you can sell only music or models for video games and so on.

The most popular services are SuperRare, Rarible, OpenSea, and Niftygateway. They all charge commissions in ether, which is the digital currency of the Ethereum crypto. The NFT was developed based on the latter. The commission varies everywhere, but most often it’s $50 or more.

The Future of NFT

NFT has just begun to evolve, but it’s doing so rapidly. In the near future, blockchain technology will be changing and expanding. With this will come more opportunities for the development of NFT – more functionality, expansion of the list of spheres where it will be in demand, etc.

So, it’s planned to transfer different documents to a reliable blockchain database. This will protect diplomas, certificates, etc. from the risk of forgery.

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