What is an NFT?
An NFT is a Non-fungible-token, you can think of it like a unique piece of data on the internet that cannot be replaced with anything else. The reason it makes such a good token for artwork is that, like real art, it holds value because it is possible to verify the creator and owner of a particular NFT.
Another good example is something like a collectible card game. You can of course trade a card for a copy of the same card, but they aren’t actually the same thing. More likely you will trade that card for another different card.
How do NFTs work?
If you have a little bit of knowledge about Cryptocurrencies then NFTs will be easier to understand, but if you do not, then don’t worry, I’ve got your back.
Things or tokens are stored on the Ethereum blockchain. It’s like a big place that keeps track of these tokens. It doesn’t just store Non-fungible tokens, it also stores cryptocurrencies. Ethereum is a cryptocurrency like any other and you’ve likely heard of it already.
Cryptocurrencies you may have heard of:
- Bitcoin
- Dogecoin
- Litecoin
- Cardano
- Polkadot
The key concept of an NFT is that they have extra data associated with them which make them unique. This allows creators to assign images, attributes and pretty much any other data they want to these little non-fungible tokens.
Should I buy an NFT?
The decision whether to invest in NFTs can be looked at from three different angles. Depending on which way you look at it will dictate which NFTs you should buy and which ones you might want to avoid.
Reasons for buying NFTs
- Supporting creators
- Collecting NFTs
- Investing money
From the list above, purchasing NFTs for investment purposes is the most complex. It is advisable to put more thought into what NFTs you buy if you intend to make money from them. Investing money into NFTs is tricky, but there are some key points to remember; Choose an NFT whose creator is investing a lot of time into the community. A creator who is very active on twitter and more importantly, is very upfront with where they obtained the artwork. If they have a really easily traceable paper trail for where the artwork came from, this is usually a great sign they are trustworthy.
If you just want to collect NFT’s for fun and support creators (which is awesome!) then go and grab the ones you like and set up a live gallery for yourself. You may just make money by chance if they become very popular. Either way you would have enjoyed the process and been part of a growing community of artists and collectors which is likely here to stay for many years to come.
Are NFTs really worth all the hype?
There are definitely some huge amounts of money circulating that strongly suggest they are. Also big auction places like Christies are auctioning off NFTs for huge sums of money. I believe it will only go up from here. Considering people like Beeple sold his video (https://niftygateway.com/itemdetail/secondary/0x12f28e2106ce8fd8464885b80ea865e98b465149/100010001) for $6.6 million dollars. This is incredible and well deserved for the years of work they put into their artwork.
Where can I buy NFTs?
You can buy NFTs a lot of places, but we recommend you stick to professional websites and the creators of them, for example https://fatcorns.com, https://opensea.io/, https://rarible.com/ and https://niftygateway.com/
Once you have found a site, then it’s as easy as connecting your Metamask to the site. Transferring some Ethereum to your metamask (if you haven’t already) and then purchasing through the website. The transaction can be delayed and you can up your “gas” price to make the transaction quicker or just wait until the transaction is complete. You can think of gas in a very literal sense, it’s the fuel you need to get to the final destination of completing your purchase. You have to pay gas fees on top of the price of an NFT, this is to make a transaction on the Ethereum blockchain.
I hope this helps you with all of your NFT questions and I’ll make sure to keep posting up useful articles in the future.
