Non-fungible tokens (NFTs) are digital assets representing real-world objects like music, art, videos, and in-game items. NFTs are frequently bought and sold online with cryptocurrencies and are encoded with the same underlying software as cryptocurrencies.
While cryptocurrencies and physical money are fungible, meaning they can be traded or exchanged with each other, having equal value, for instance, one bitcoin is worth equal to another bitcoin, but this is not the case with NFTs. NFTs being non-fungible, cannot be exchanged for or equal to one another as each has a digital signature making it impossible to trade with one another.
NFTs are created or minted from digital objects representing tangible and intangible items like GIFs, art, collectibles, videos and sports highlights, designer sneakers, music, virtual avatar, and video game skins. For example, Jack Dorsey, the co-founder of Twitter, sold his first-ever tweet as an NFT for more than $ 2.9 million.
NFTs are like physical collectibles in digital form, having exclusive ownership rights as per the contract term. Most NFTs are recorded and created on the Ethereum blockchain. Ethereum is like massive spreadsheets that have proven hack proof and tamper-resistant.
If you are looking to invest in NFTs, here are some tips to help you invest in NFTs.
How to invest in NFTs
- Open an account at the NFT marketplace: To be able to bid for NFTs, you’ll need to open an account on an NFT marketplace. The most popular ones are Opensea, Wazirx, Binance, etc.
- Create a digital wallet: You’ll need to create a digital wallet to store your NFT keys and cryptocurrency tokens. You have the option to use an integrated wallet or an external hardware wallet. To reserve your keys, Coinbase has been providing an integrated wallet.
- Fund your account: if you use an external wallet or a crypto exchange wallet, you need to connect your credit card details or bank account to make crypto for your transaction. You may need to go through a verification process that’s run by the exchange platform.
- Buy NFT: look for the NFT you are willing to purchase. NFT marketplace will usually guide you through the whole process of buying NFTs.
Top 5 Marketplace for NFTs
OpenSea is a person-to-person marketplace for NFTs, crypto-collectibles, and digital items. It is the largest NFT marketplace gaining high-profile customers every day. In addition, you can create your articles on the blockchain using its minting tools.
Wazirx is one of the most trusted marketplaces for creators and artists. The NFT marketplace carries unique artwork of various artists, professionals, etc. The purchase of the same is made via another cryptocurrency, i.e., Either.
Raible has been new in the NFTs marketplace, providing an added advantage of working as a distributed network to facilitate trade without an intermediary. It allows various artists to specify a share of royalty for secondary transactions. It also offers its own cryptocurrency RARI.
SuperRare is a platform built on the Ethereum blockchain, allowing users to trace the complete history of art. You can display your work without fear of forgery as all transactions are happening on-chain, creating a tamper-proof document of the history of each artwork. Sign up now and reap the benefits of NFTs.
NiftGateways has been famous for its crypto assets called nifties. The procedure of buying NFTs is as easy as buying clothes on your credit card. The buyer can decide where to keep the NFTs in their Nifty Gateway account or Metamask wallet. It has been famous for purchases in crypto games like gods unchained and crypto kitties.
Advantages of NFTs
Revenue stream for various artists:
Now artists too have the potential to earn money in the digital landscape. When their artwork gains popularity on the internet, they can accrue huge gains in income.
Smart contracts are the heart and soul of blockchain technology. For example, suppose the artist attaches royalty to his artwork, and the NFT owner resells it for a profit later. In that case, the artist gets compensated immediately as per the terms and conditions of the contracts.
NFTs give artists a direct way to support and add unique assets to their collections. In addition, the artist community can earn a lot of revenue by catering to the digital platform.
NFTs can’t be replaced or changed in a way if their authenticity is verified on the blockchain.
Disadvantages of NFTs
NFTs are gaining immense popularity, but the field is impossible to gauge its value for long-term investment. Moreover, as NFTs value is entirely tied to sentimental and aesthetic value, it is highly speculative.
NFTs can be stolen
NFT can be hacked if the exchanges have inefficient or outdated security protocols. Therefore, it becomes essential to purchase NFTs from a trusted site. Don’t forget to research the marketplace you are willing to invest in NFTs.
Ownership doesn’t mean equal control
Owning an original NFT does not mean you can control its duplication or distribution across platforms. Ownership implies you hold authentic or original NFT. You can’t stop prints from being made of the NFT you purchase.
NFTs, the digital token certifying ownership for physical or virtual assets, is one of a kind creation on the internet. However, NFTs only imply the digital assets’ ownership, but most NFTs can still be assessed or copied if viewable on the web. NFTs do not have an intrinsic value, and most people purchase them due to their aestheticism or personal ownership satisfaction. With the rising popularity of investing in NFTs, the tips mentioned above will guide you in prioritizing your investment portfolio.