By EDEN Gallery,
Posted Mar 29, 2021 ,
In Art Blog, Cryptocurrency
You may have heard about NFT’s recent record-breaking sale in the art world. NFTs are all over the news for their potential to not only revolutionize the art world but the role they will play in the cryptocurrency marketplace of the future. But what is an NFT? What is NFT art? More specifically, how can you create, purchase and sell NFT art or other NFT assets? This article is going to break down the answers to these questions, along with everything else you need to know about these unique collectible crypto assets.
To put it simply, crypto art is digital art that is treated like physical art because of its verified ownership. Just like an original painting signed by any famous artist can have its authenticity and ownership authenticated, crypto art can be verified in the same way using an NFT or a non-fungible token.
Diving into the basics, the acronym “NFT” stands for “non-fungible token”. Each “token” is essentially a unique alphanumeric code recorded on a blockchain. The NFT’s authenticity, identity, ownership history, and sales prices are all tracked on a blockchain. Like an inventory number or tracking code, the token locates the actual asset within a larger system.
This larger system is known as the blockchain. The blockchain is a database maintained by a distributed network of computers as opposed to a corporation or a government. The database consists of unalterable “blocks” of transactions. These transactions are verified cooperatively by the network. The goal is that you can trust the system without having to trust any individual contributor, such as banks, etc.
You can think of the blockchain as a master copy of a document to which anyone can add a row of information, such as the unique ID of an NFT that is attached to a piece of crypto art. The blockchain can verify proof of ownership of a digital asset by checking it against this document. The document is the thing that makes it nearly impossible to falsify the information because all computers check it against each other to verify what is original or fake.
NFTs are either unique unto themselves or produced in limited quantities. This is the same concept as any rare work of art or physical collectible. Think about what makes the world’s most valuable items so expensive. Paintings by renowned artists, unique baseball trading cards, vintage cars, all have the potential to fetch millions at auction because they are extremely rare. These items are desired by collectors not only for what they are but for their inherent value as an investment.
That being said, it’s important to remember that NFTs do not just represent art. NFTs can be used to represent virtually any type of real or intangible item, including virtual items within video games, virtual currency, weapons and avatars, music, collectibles (e.g. digital trading cards), real estate, virtual land, and even video footage of iconic sporting moments.
In fact, Twitter CEO, Jack Dorsey, chose to sell his first-ever tweet on the platform as an NFT at auction.
It is helpful to think of NFTs as crypto-collectibles. The “non-fungible” aspect comes from the fact that each NFT is irreplaceable and nontransferable. It has a value independent of all others, including different editions of the same work.
An example of something that is fungible would be a traditional currency. Ten dollars in cash is a fungible or transferable currency because it has the same value whether it is in bills, change or wire transfer. The same goes for physical works of art which are also fungible. Paintings may be bought and sold for the amount of money they are determined to be worth. Their value is transferable to a different form, usually cash money.
Ethereum is currently the leading blockchain service through which to issue NFT. A blockchain service, as we mentioned earlier, is simply the database that stores the currency. Every cryptocurrency that exists in the world exists on its own blockchain. Ether is the native cryptocurrency of Ethereum. It is the second-largest cryptocurrency after Bitcoin and the most actively used blockchain.
It helps to think of Ether like casino chips. Each casino has its own unique chip you need to buy with money to then use as currency to pay, play, and get paid in. Like casino chips, you can always cash out your earnings and get dollars back. While some sites allow you to buy crypto art using credit cards, when you sell it - you’ll always get ETH in return that you’ll have to then convert back into whatever non-crypto currency you want.
A crypto wallet refers to an app that is used to store and retrieve digital assets.
NFTs are created on a blockchain. When creating an NFT, you first need to decide which blockchain to issue your NFT on.
Ethereum is currently the leading blockchain service for NFT issuance. However, there is a range of other blockchains that are becoming increasingly popular such as Binance Smart Chain, Tron, EOS, Polkadot, Tezos, and more.
Each blockchain has its own separate NFT token standard, compatible wallet services and marketplaces. For instance, if you create NFTs on top of the Binance Smart Chain, you will only be able to sell them on platforms that support Binance Smart Chain assets.
Let’s say, for instance, that you decided you want to create your own NFTs on Ethereum. Ethereum is the blockchain with the largest NFT ecosystem.
To mint your own content (music, video, etc) on the Ethereum blockchain, this is what you will need:
The main Ethereum NFT marketplaces include OpenSea, Rarible, Mintable, and Marketplace. However, Marketplace requires its users to register on the platform beforehand.
Once you have chosen a marketplace, the process of actually creating your NFT is quite simple. After uploading the file, your NFT image, audio, GIF or 3D model, you also have the option to include special traits and attributes to increase the scarcity and uniqueness of your NFT.
Creators can also include unlockable content that can only be viewed by the one who purchases the NFT. This can be anything from saved passwords to access certain services, discount codes, and contact information.
You may be wondering, why would you pay or even bid to pay money for content that in many instances is downloadable? There’s a difference between right-clicking and downloading an image or animation and having it on your computer versus owning the NFT-backed original. That image you downloaded does not have a monetary value, while the NFT backed image is the “original” piece of art from an artist. Just like you can go online and download an image of the Mona Lisa or buy a Mona Lisa poster, the image, and the replicas will never be worth anything close to the verified original. You can download a picture a million times, but they’re all worthless because you don’t own the NFT-linked version that verifies you own the original work of art.
When it comes to creating NFTs, some platforms charge a fee, but others, like OpenSea, allow access for free. Fees on NFT platforms are called gas. Just think of it as the same gas that powers a car, the platform relates to the money it takes to power the marketplace as the same thing.
Ethereum gas is simply an amount of ether required to perform a certain function on the blockchain. When you are getting started, it would be adding a new NFT to the marketplace. The cost of gas varies depending on network traffic. The higher the number of people transacting value over the network at any given time, the higher the price of gas fees and vice versa.
It is worth noting however that Ethereum gas fees are significantly cheaper on average during the weekend. This is because the weekend is when fewer people are using the network. This can help keep costs down if you’re listing multiple NFTs for sale or simply looking to save a bit of money throughout the NFT creation process.
Many artists who are turning their art into NFTs use it as a way to create their own art brand.
One of the best parts about selling crypto art is that the artist always retains copyright and gets royalties from each sale on the secondary market. Meanwhile, when you post your work to Instagram, they can use your art any way they want for their own purposes without seeking permission. Instagram and social media platforms profit off your work, while with crypto art the artist can profit off their own art.
To sell your NFTs on a marketplace, you’ll need to locate them in your collection. Once you already have an account on an NFT marketplace, this is pretty simple. Clicking the “sell” button will take you to a pricing page where you can define the conditions of the sale including whether you want to sell your NFT at auction or at a fixed price.
Ether and other ERC-20 tokens are the most common cryptocurrencies you can sell your NFTs for, however, some platforms only support the native token of the blockchain they were built on.
There are four things you need to consider before buying NFTs:
Certain NFTs are only available on specific platforms. For example, if you want to purchase NBA Top Shot packs you will need to open an account with NBA Top Shot.
Pack and art drops are becoming increasingly common as a method for selling scarce NFTs to an audience of hungry buyers. These drops normally require users to sign up and fund their accounts beforehand so that they don’t miss out on the opportunity to purchase NFTs when they drop. Pack and art drops can be over in seconds, so you need to have everything ready ahead of time.
The following is a list of marketplaces where you can buy NFTs. Access to the platforms works the same way as when you want to sell an NFT.
NFTs have shown that they are a rapidly growing trend that has no sign of falling off the radar any time soon. Major brands and celebrities have signed deals to release their own non-fungible assets soon, and even the musician Grimes has jumped on the bandwagon selling almost $6 million worth of digital artwork in minutes.
It is anticipated that the NFT market will exceed $1.3 billion by the end of 2021. More artists, brands, and icons will create their own unique tokens. With more blockchains competing to produce better NFT services too and a growing range of platforms to choose from, now is a great time to participate in the space.
While we’ve covered the ins and outs of NFTs and their role in the world of cryptocurrency, there may be one final question you are wondering about.
This can be answered depending on which part of the NFT experience you are referring to.
It goes without saying that it’s important to always be aware of your personal security on any website. It’s important to do as much research as possible on how to safely store funds and digital items before you get started. The crypto and NFTs in your wallet are your responsibility. Never share your passwords or details with anyone, especially your seed phrase.
Reminder: your seed phrase is a list of words that can be used to recover your crypto in the event that you forget your password or lose access to your crypto wallet. When you first begin trading with your wallet, find your seed phrase and back it up somewhere safe. Never share it or store it on an online cloud storage service.
When it comes to NFT investments, NFTs are as safe as buying and owning any cryptocurrency. Bottom line? They are usually a safe investment, however, as with any investment, you should take the necessary steps to protect them. In this sense, the main risk is that you should consider just how much money you are willing to spend on one.
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