What is an NFT Art?
NFTs have been the talk of the digital town for many months, and the buzz doesn’t seem to be dying down any time soon.
If you have never heard about them, or you have but can’t haven’t got the hang of what NFTs are, not to worry, we wrote this article to clear the air. Let’s begin with the obvious, what are NFTs?
What does an NFT mean in Art?
An NFT art is a unique digital asset, unlike most cryptocurrencies that are fungible. An NFT can be any digital file, such as a piece of art, an eBook, music – just about anything. You can’t have it physically, but you can own the copyrights.
Fungibility means the ability to be interchanged with something else of the same value. For instance, if you have a Dollar bill, it’s fungible because you can replace it with another one without changing anything about the transaction.
However, if you have something like a rare art piece or even collectible cards (like baseball cards), these are not fungible because they are unique and can’t be replaced by something else.
NFT stands for Non-fungible token in the context of cryptocurrencies, representing a new step in the token economy, as it opens up many possibilities.
What Makes NFTs Special?
NFTs are unique and can’t be replaced with something else. They have a value attached to them because of their uniqueness. In this way, you can buy or sell something that is one of a kind.
Can you imagine buying and selling digital art pieces? Well, NFTs make this possible. And there have been several examples we’ll go into more detail later. One of such is a video by Beeple, an animator, who put up his art (“EVERYDAY: The First 5000 Days”) for sale on the Ethereum blockchain. It sold for $69M. I know, right?
NFTs are not just limited to artwork, though; they can also be collectible items, so anything unique. If you are a gamer, for example, it means the possibility to own rare items in your favorite games without having to worry about running out of the available supply.
And the best part is that it all runs on blockchain technology (more specifically Ethereum). The main reason people believe NFTs will get bigger lies in their ability to store unique data within them. This allows NFTs to be used for all sorts of purposes.
How Do NFTs work?
NFTs differ from ERC-20 tokens such as DAI and LINK in that each token is unique and cannot be duplicated. NFTs allow for the assignment or claim of ownership of any individual piece of digital data, which you can track using Ethereum’s blockchain as a public ledger.
As a representation of digital or non-digital assets, an NFT is created from digital items.
NFTs work on Ethereum through smart contracts, which are sets of rules that say what can be done with the NFT depending on certain conditions met (i.e., if X happens, then Y will happen).
Ethereum is a platform that allows developers to build decentralized apps (also known as dapps) on top of their blockchain. These are applications where data is stored and run directly by the nodes in the network rather than being controlled by any central authority – this means no censorship or downtime.
At any given time, an NFT can only have one owner. The uniqueID and metadata that no other token can replicate are used to manage ownership. Smart contracts that assign ownership and govern the transferability of NFTs are used to create them.
When someone generates or mints an NFT, they execute code from smart contracts that follow various standards, such as ERC-721.
An NFT could represent anything from digital art like music, animation; to real-world items like official documents or event tickets.
Unique Features of NFTs
- Each token has a distinct identity tied to a single Ethereum address.
- They are not replaceable 1:1 with other tokens. One ETH, for example, is identical to another ETH. With NFTs, this isn’t the case.
- Each token has a unique owner whose identity can be easily verified.
- They are based on Ethereum and may be purchased and traded on any Ethereum-based NFT exchange.
What are the Benefits of NFTs for Artists or Creators?
NFTs allow artists and creators to get rewarded for their work. It is possible now to sell digital assets on a decentralized platform without worrying about intermediaries and taking a cut of the profits.
This means that artists can now make money even if the general public doesn’t appreciate their work. This also opens up new business models, such as letting users rent access instead of owning it forever – enabling more flexibility in the creative industry.
NFTs provide a sense of scarcity around digital artworks, allowing their creators to sell their work the same way conventional artists do. They can even set up royalties to get commissions on the first sale of their work and subsequent purchases. As a result, they will be able to profit from their work for many years to come.
Also, artists and content providers can keep their full copyright with NFT technology, which is uncommon in conventional licensing deals.
What are the Benefits of NFTs for Gamers?
NFTs can be used for trading in-game assets, making them less susceptible to scams and market manipulation. Game developers might also introduce unique items with special abilities or powers not available in regular game items – opening up new possibilities for gameplay.
In many regular games, you can purchase addons to use in your game. If the item was an NFT, though, you could repay your investment by selling it once the game is over. If that item gets more valuable, you might even make a profit.
Game makers might earn a royalty each time an item is resold on the open market. As a result, a more mutually advantageous business model emerges, in which both players and developers profit from the secondary NFT market.
This also implies that even if the developers stop supporting a game, the items you’ve gathered remain yours.
What are the Benefits of NFTs for Collectors?
NFTs can become a new way to collect and preserve scarce items. It’s a much better way of keeping track and verifying the authenticity of rare pieces than relying on traditional paper certificates.
For collectors, NFTs can work similarly to any other speculative asset, providing an opportunity to own rare pieces whose value increases over time and can be resold for a profit.
How to Create NFT Art
NFTs can be bought and sold on many different decentralized exchanges. You can store NFTs in any Ethereum wallet, but if you want to trade them, you will need a wallet that supports direct token transfers, such as MetaMask.
As for storing your NFTs in the long term, you may want to consider a hardware wallet.
Steps to Starting Your NFT Art Collection
- Get a digital wallet where you will store NFyourTs/crypto. MetaMask is a good option.
- Buy some cryptocurrency – This could be ether or any coin your NFT provider accepts. Because the majority of NFTs are Ethereum-based tokens, most NFT marketplaces only take Eth tokens as payment. If you already have a cryptocurrency exchange account, you can use it to buy Ethereum.
- Transfer the coin to your preferable wallet
- Connect your wallet (MetaMask) to an NFT marketplace. There are numerous online marketplaces where you can purchase and sell NFTs. You’ll be able to buy various forms of art or collectibles depending on the market you choose. Many of these websites include secondary marketplaces with a range of NFTs, but each platform has its own set of rules.
- After you’ve added funds to your account, purchasing an NFT is a simple process. Because most marketplaces operate on an auction basis, you’ll need to place a bid for the NFT you want to buy. For NFTs with several prints, certain marketplaces operate more like exchanges, employing the highest bid and lowest ask.
Popular NFT Marketplaces
OpenSea – is an Ethereum-based marketplace for non-fungible tokens. Users can trade non-fungible tokens for cryptocurrency by interacting with the network. It has a wide range of digital collectibles, including video game items and digital artwork. A web3 cryptocurrency wallet, such as MetaMask, is required to use the platform.
OpenSea is the first and largest peer-to-peer NFT marketplace. According to analytics platform DappRadar, it has a total trade volume of over $6.5 billion. It offers NFTs of anything from in-game items and collectibles to artwork, music, GIFs, and more.
After you’ve connected, purchasing an NFT is a straightforward process; you only need to browse through the various collections or search for something that catches your eye, then submit an offer and wait to see whether it’s approved.
Rarible – This is an Ethereum-based auction platform for digital art, video game items, and other unique virtual assets. The Rarible marketplace enables users to transact with each other using either ETH or the RAR token.
You can buy and sell all kinds of art, just like on OpenSea. Sellers can also make many NFTs for a single image to sell it multiple times.
Users who have dabbled in comparable NFT marketplaces like OpenSea will feel at home with Rarible’s user interface, which is easy enough for relative crypto beginners.
You can log into Rarible using various crypto wallets, including MetaMask, Coinbase Wallet, MyEtherWallet, and more.
What are Some Examples of NFTs?
There are several examples of NFTs, but here’s a short list:
CryptoKitties is a Blockchain game that allows players to collect, breed, and trade unique virtual cats. It is one of the first attempts to deploy blockchain technology to non-fungible, leisure assets and is one of the most successful dapps on Ethereum.
CryptoKitties is based on the Ethereum blockchain network. Each CryptoKitty is a unique, non-transferable token (NFT).
Each is one-of-a-kind and owned by the user, and its worth might rise or depreciate depending on market conditions. Even the game makers are unable to copy or transfer CryptoKitties without the user’s authorization.
Users can interact with their CryptoKitties by buying, selling, and siring (breeding) them.
CrytoPunks are collectible digital cartoon characters that are rare and have different attributes based on the algorithm used to generate them. Larva Labs developed them, a two-person software developer team consisting of Canadians Matt Hall and John Watkinson.
CryptoPunks, along with other early ventures like MoonCatRescue, CryptoKitties, and, more recently, Bored Apes Yacht Club and the sale of Beeple’s Everydays: The First 5000 Days, are widely regarded with sparking the NFT frenzy of 2021.
Only 10,000 CryptoPunks (6,039 males and 3,840 females) exist, all of whom have been made digitally scarce thanks to blockchain technology.
No two characters are identical because they were algorithmically generated using computer code. However, some qualities are more uncommon than others. The initial 10,000 CryptoPunks will never be surpassed.
They were given away for free at first, and anyone with an Ethereum wallet could claim them. During its first release, the only cost to claim a CryptoPunk was Ethereum (ETH) “gas fees,” which were low at the time due to little use of both the Ethereum blockchain and little understanding of the project.
NFTs – Pros and Cons
NFTs can be a very effective way to encourage users and developers to stay loyal. Also, they allow the community to take ownership over their digital assets and add value to them by trading or breeding.
On the other hand, NFTs can be a poor investment because they are not backed by anything tangible, like gold or land. This makes digital art valueless in the eyes of some investors and collectors.
Some experts believe that NFTs can make sense as a medium for storing value. They are no longer tied to their source code (i.e., Ethereum) if it becomes obsolete or unusable due to security issues.
NFTs are also sometimes used for illegal purposes, like money laundering or the purchase of drugs. This makes them controversial because they are seen as a currency with no government regulation and oversight.
Lastly, If you don’t store your NFTs safely, they could be hacked like other cryptocurrencies have been.
NFTs like CryptoKitties and RareBits are a great way to get started with the world of cryptocurrency. They also let you own something that’s truly yours and allow you to create value.
They can be a good investment if they are carefully selected, just like any other type of investment. However, you should always do your research and know that some NFTs are more valuable than others.