After Bitcoin and Blockchain, NFT is another word that has entered our lexicon. The watchword is everywhere and people are wondering what NFT is and what is it for? Well, there really isn’t a one line explanation. That’s why I give you a full explanation on NFT, its use in digital art, and much more.
So without wasting time, let’s go and learn all about NFT (Non-Fungible Token) in detail. Here I have mentioned all the questions people have in mind regarding NFTs.
First of all, let me give you a clear definition of NFT and what it stands for. NFT stands for Non-fungible token. Fungible by its very definition means something that is mutually interchangeable. For example, you can swap a $ 10 bill for another $ 10 bill or swap it for two $ 5 bills. Either way, the value remains the same and you will have no problem exchanging money. Here, money is a fungible object because it can be exchanged without its value decreasing.
What is NFT?
So when I say Non-fungible, I mean something that cannot be exchanged for a similar object of similar value. To give you a simple example, if you want to replace the Mona Lisa painting in the Louvre with another print of the same image, will it be the same? And, above all, will it have the same value? The answer is no. Here, the incomparable Mona Lisa painting is a non-fungible object that cannot be exchanged for another identical looking object.
Uniqueness is the key here. A non-fungible object is therefore something unique and authentic. Something that has value for its authenticity. We come now to the symbolic part. A token is a 40-digit string of words and numbers that contains information about the original artist who created the masterpiece, the current owner of the item (there can only be one), and the item’s current price. This information storage is coupled with Blockchain technology which cannot be changed in any way due to its decentralized system.
In the end, when you put the three words together, NFT stands for an incorruptible token that contains information about the ownership of a unique and genuine item. The NFT is essentially a certificate of ownership or authenticity. This is the general definition of NFT, but if you want to get a complete idea of NFT, you need to understand the concept using digital art as an example, which I covered in the next section.
What is the use of NFTs in digital art?
Many will wonder what is the use of NFT in digital art and why does it make so much noise? Well, as I explained in the previous section, the NFT is a signature of authenticity and provides that authentic stamp of approval on the web when it comes to digital arts. We all know that in today’s world everything can be manipulated and people can pass off other people’s work as their own. In fact, on the web, it is virtually impossible to find the original creator of a work of art and this is where NFTs come into play. NFTs aim to bring art collection into the mainstream digital age by offering fully digital artwork sold as NFTs.
NFTs allow digital creators to make their works public without having to worry about proving their ownership or authenticity. Digital artists can generate an NFT for their original work and auction it off to another person while retaining information about the original creator, current owner, and current value. The best part about NFT is that every time digital art is sold to another person, a share of the value will be passed on to the original creator. The NFT is therefore a great proposition for digital artists who want to earn money from their works..
The great thing about NFT is that it is no longer limited to paintings, but people now use it to purchase digital collectibles of all kinds. For example, Jack Dorsey launched an NFT auction on his first tweet, which is currently worth $ 2.5 million.
What is the link between Blockchain and NFT?
I explained it above Blockchain technology is the foundation upon which NFT is based. We already know that Blockchain is infallible and that it is used extensively in the management of various cryptocurrencies. Every transaction made by NFT is recorded in a public ledger, which means that the whole system is very transparent. Another aspect of this technology is that it creates a chain, which means that everything is traceable to the original creator.
One thing to note is that you can only buy NFTs with cryptocurrencies and in particular Ethereum. Currently, Ethereum is the market leader in issuing and managing NFTs due to its head start. However, some services also accept bitcoins to buy and sell them.
A brief history of NFT
Now that we’ve learned about NFT in detail, let’s find out how it was created. First of all, the reason Ethereum has an advantage is that they are the ones who started this project with their new NFT blockchain system called ERC-721 in 2015. Subsequently, Ethereum brought ERC-1155 and advanced technology before Bitcoin and Flow could increase.
In what was NFT’s first introduction to the masses, Ethereum introduced a blockchain game called CryptoKitties in 2017. In this game, players can buy, collect, breed and sell virtual cats using Ether (Ethereum’s cryptocurrency). At the time, the best-selling cat was $ 117,712, which was mind blowing. Taking their cue, Ethereum has incorporated the NFT system into their cryptocurrency and they are now leading the market.
To give you some numbers, in 2018 NFT had a total market share of $ 50 million; in 2019 it reached about $ 150 million and in 2020 the NFT market rose to $ 338 million. Now, with the current boom, no one can guess where the market will go from here.
The disadvantages of NFT
While I have discussed the benefits of NFT, there are some major drawbacks that you should keep in mind before investing in a digital collectible via NFT. First of all, it takes an enormous amount of energy to generate and maintain the system, which makes it unsustainable and has a negative impact on ecology. This is because, unlike cryptocurrencies, a non-fungible token runs on a proof-of-work blockchain that is less energy efficient. Anecdotally, expect GPU prices to rise further in the near future due to extreme mining.
Aside from that, critics warn it NFT is a bubbleand people who buy a weird GIF or pick up a rare music video at such a high cost will collapse. Experts say that rare paintings and collectibles not only retain their value because of their artistic character, but also because there is an established public that wants to own and collect rare paintings or a work of art that no one else owns.
Experts point out that those who buy digital artwork don’t pay large sums because they appreciate the art. Instead, they want to create a bubble to make money by reselling it at a higher price. It is worth noting that the digital world does not suffer from a shortage of artwork, unlike physical masterpieces, and prices will likely drop when the bubble bursts.
How to buy NFT?
To purchase an NFT, simply go to one of the NFT marketplaces and make a purchase. However, there are some things you need to consider before making your first NFT purchase.
First, you need to make sure your cryptocurrency wallet is compatible with NFT. Next, you need to see which market you want to buy from, as well as the cryptocurrency required to buy the NFT you are interested in. For example, while Ethereum (ETH) is a major player in NFTs, there are exchanges that use other cryptocurrencies as well. So make sure you have enough of that currency to pay for the unique digital artwork you want.
Some of the NFT markets you can check out include OpenSea, Rarible, Mintable, Nifty Gateway, etc.
How to sell NFT?
If you have a digital artwork or other content that you want to sell as an NFT, you can also do so on NFT Marketplaces. While the details may differ, all you need to do is upload your digital work, provide information on how it was created, and more. and set a price for your digital file.
So your NFT can be bought by people who want to buy NFT. Every time your NFT is sold, you get paid for your work. Note, however, that some markets charge a fee for hosting and selling your digital file. So be sure to read the fine print carefully before choosing the market you want to sell your NFT to.
How to produce an NFT?
Creating NFTs is pretty straightforward once the initial setup is complete. The hardest part is understanding the rest of the process. Basically, you will need a wallet that can be used with NFT, such as MetaMask.
Once you have created your portfolio, you can connect it to the platform on which you want to sell your art (such as OpenSea, Rarible, etc.). You can then upload your digital artwork to the platform, choose a price and start an auction.
However, things are slightly complicated. On Rarible, for example, you will have to pay a small fee to put your work up for sale. Ensuite, vous devrez payer une somme supplémentaire pour que votre œuvre soit convertie en NFT, puis, une fois votre NFT vendu, Rarible vous facturera également une commission, ainsi qu’une somme pour le transfert de la cryptomonnaie du portefeuille de l’acheteur your.
Generally, Making a non-fungible token is easy, but selling it takes some work. So make sure you have enough time before starting and don’t set a price too low, otherwise you risk losing money selling your works.
Verdict: where is the NFT headed?
It was a thorough explanation about NFT and what it means for digital art and other digital collectibles. While NFT adds a new dimension that can help verify authenticity, I think the current craze of owning an exorbitantly priced digital item is out of place.
It’s a great technology that can have a huge impact on the music industry and other creative professions. It will certainly reduce intermediaries and artists will be able to reap the benefits directly from consumers.