“NFT”- an acronym you are probably familiar with if you are an avid Twitter user, a fan of Justin Bieber, or famous sportsmen like Messi, but what are NFTsactually?
Well, it stands for “Non Fungible Tokens” or, synonymously, a non-replaceable token. Let’s take an example to understand better. Suppose you buy a tote bag from a retail store. There could be plenty of the same bag produced and sold, which means each bag has several copies and is interchangeable by one another. Now suppose, you embroidered a flower and your initials onto that tote bag, after which it is unique and different from the other retail tote bags and can not be interchanged/ replaced by them.
In essence, NFTs refer to the embroidered version of the tote bag but with the use of cryptocurrencies and the selling/buying of digital art, music, video clips, or an object within a video game.
As TechMagazine defined it, “NFTs are cryptographic tokens that use blockchain technology to allow users to define the uniqueness of an individual asset.” where blockchain technology refers to a decentralized database where every part of the chain holds the data of the asset since its creation (i.e. its entire history of ownership, transaction history, details of the asset, etc. hence proving its authenticity).
STEP 1: Digital Wallet
The first step in making transactions with NFTs is getting yourself a digital wallet. A digital wallet shall store all your cryptocurrencies (as these will be used for the NFT transactions). One wallet that can be recommended for beginners is the Coinbase wallet. You can exchange the fiat (currency used in daily expenditures)money into cryptocurrencies and store them here.
STEP 2: Choosing your cryptocurrency
Next, you will have to choose the cryptocurrency you would use to make transactions in the NFT marketplaces. One important thing to be noted is that not all NFT marketplaces use the same cryptocurrency for creating, buying, or selling the NFTs. It would be best as a beginner to stick to Ethereum (ETH) as most NFTs are Ethereum-backed.
STEP 3: Exploring NFT marketplaces
Once you are familiar with the two steps mentioned above, you can delve into the final step of this section which is exploring the NFT marketplaces. An NFTmarketplace is a peer-to-peer platform where users can store, manage and trade their NFTs. It would not be surprising to see that there are plenty of NFTmarketplaces to explore, join, and get selling! It is important to choose are liable marketplace when trading with NFTs, and one such platform is OpenSea.OpenSea is not only a trusted NFT trading platform but also the leader in NFT sales to date. Other popular marketplaces include Raible, Larva Labs, SuperRareamongst many others.
Creating your own digital artwork
While quite many people will be interested in buying artworks, there are quite a talented bunch who would rather create their own masterpieces and put them up for sale. Well- this is the corner for them!
Creating your first NFT art is easier than ever. You need to make sure that you have a crypto wallet (example, Coinbase)attached to one of the NFT marketplaces(example, OpenSea), then you can head to the Create section of your chosen site, and then you can create your artwork and be a proud owner of your first ever NFT!
Once you create your NFT, upload it and fill it some details, you need to pay a gas fee to mint your creation (i.e., “Minting” is the process of adding a block onto the there um blockchain, where your artwork’s unique identifier will live forever. -TechMagazine)
All trades involving NFTs include a gas fee that needs to be paid to create an NFT, buyNFTs, or even sells NFTs. The gas fee for each marketplace differs, and it fluctuates well. The gas fee for each marketplace can be found via the NFT Gas Station.
There is a gas fee imposed in the transactions involving NFTs, but it is important to note that different marketplaces have different conditions regarding those. Although it is a complicated aspect of NFTs- and a rather intimidating one, it is also amongst the most important realms of NFTs and blockchain, which cannot be dodged. Hence, it is important to choose a marketplace wisely.