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NFTs, otherwise known as Non Fungible Tokens are unique digital assets that represent real-world objects like artwork, music, trading cards, in-game items, and videos.
These digital assets are often traded along with cryptocurrency on the blockchain. The term "non-fungible" denotes that the token is not interchangeable: it is unique to itself. It is because of this nature that NFTs are not mined like Bitcoin and other cryptocurrencies: they are created and sold.
The value of an NFT depends on its rarity: the more rare an NFT is, the higher the price. Despite the high value that NFTs generally have, most holders do not fully understand them. Drastic market changes may result in marked changes in the price of an NFT. The good thing is that when you buy an NFT, the record of your purchase is stored in a digital ledger forever. NFTs are a good way for content creators, musicians, and digital artists to generate income.
NFTs have not been around for so long: in 2012, Colored Coins were mentioned in an article by Yoni Assia. Later that year, a paper by Meni Rosenfeld further discussed Colored Coins as the new asset class they would become.
In 2014, digital artist Kevin McCoy and tech entrepreneur Anil Dash created the first NFT known as the Quantum. The Quantum sold for a whopping $1.4 million in June 2021.
2015 ushered in a new beginning: Counterparty partnered with the team creators of the Spells of Genesis game. The team creators introduced their in-game currency called Bit Crystals.
In 2017, Cryptokitties created a massive NFT wave: the game was launched in December 2017 to enable players to collect cats with their characteristics on the blockchain and mate them, creating unique cats which would inherit the characteristics of their parents.
In June 2021, a World Wide Web source code NFT sold for $5.4 million at an auction. According to reports, the NFT was created by the English scientist, Berners Lee. This shows how important NFTs have become over the years.
1. Buy Ethereum: Since NFTs are Ethereum based, to get NFTs you will need to buy Ethereum. You can get your Ethereum from exchange platforms like Coinbase, Kraken, Binance, Gemini, and Bittrex. Then you can send your Ethereum to your Metamask wallet.
2. Go To The NFT Marketplace: Marketplaces such as the OpenSea, Rarible, SuperRare, BakerySwap and Sorare are platforms where you can buy NFTs. You have multiple options to select from, so you can make your unique choice.
3. Make Your Purchase: Once you find an NFT that you like, submit your bid for the auction. If you are finally set to buy, click on check out and confirm the gas fee. Approve the transaction and wait for your NFT to arrive. The time frame varies from minutes to days: when your NFT arrives, congratulate yourself. You just bought an entire NFT!
Investing in NFTs requires careful observation of the cryptocurrency and stock exchange markets: here is a list of the NFT stocks that have been mentioned to be potentially the best in the market.
1. Takung Art: Just some days ago, Takung Art shares were reportedly skyrocketing and living up to the social media hype by being up by 57.07% at $10.80 on the 25th of August 2021.
2. Dolphin Entertainment: In March 2021, Dolphin Entertainment shares doubled after the company announced that it would be creating a new NFT division. Since then, Dolphin Entertainment NFTs are the NFTs to have.
3. PLBY Group: The Playboy partnership with Nifty Gateway, an online NFT marketplace has resulted in the release of a collection of NFT tokens which has investors excited.
4. NASDAQ: The National Association of Securities Dealers Automated Quotations have more than 3000 stocks listed on their website and their NFT stock is included. The marketplace provides an opportunity for individuals to get a unique collection of NFTs.
5. NIKE: In 2019, Nike obtained a patent for Cryptokicks. Cryptokicks pairs a physical shoe release with an NFT and also allows for the splicing of two pairs of virtual shoes to produce a new one. If you like sneakers and NFTs, then NIKE is the one for you.
On the 27th of August 2021, it was reported by the British Broadcasting Corporation that twelve-year-old Benyamin Ahmed had made about £290,000 during the school holidays from creating and selling his NFTs.
This goes to show that NFTs are very significant in the blockchain currently and they may be profitable for the creators. However, the purchase of Twitter CEO Jack Dorsey's first tweet for over $2.9 million as well as other inanimate works of art has sparked discussions about NFTs. Some people believe that NFTs are a good investment because the prices are bound to rise and others believe that buying digital pieces of art that you cannot hold is a foolish financial decision. The truth is that NFTs are highly volatile investments and irrespective of the profits they might give, it is safer to invest with your spare money. Here is a video that will help you understand NFTs better and while you are watching it, remember to send me some NFTs.