● By Ahmed Wafi
Wait till you find out what the F stands for.
The biggest trend on the internet right now are NFTs or non-fungible tokens. Yes, you read that right… fungible (we’ll explain what that means in a bit). And if you’ve read the news, you’ve seen that some NFTs are sold for loads of money. Remember the Nyan cat from 2011? That meme sold for about 300 Ethereum (ETH) which is the equivalent to about USD600,000 at the time.
In more local NFT news, an Indonesian student sold his four-year selfie collection as an NFT for nearly USD1 million. So, what exactly are NFTs? How can I make them and where can I trade them? We did our research to answer your questions below!
Like we said, the F stands for fungible which means that the ‘token’ cannot be exchanged or substituted for another asset or token of the same value. An example of a fungible token is currency. You can trade a RM5 note for five RM1 notes but with NFTs, each token is unique and cannot be traded for anything else.
Essentially, an NFT is a digital certification claiming that any digital artwork, picture, meme, video, audio clip, gif is authentic. This in turn, solves a problem for digital creators on the internet, making their artwork unique, scarce and in turn more valuable.
So when you buy an NFT, you are buying the certificate of ownership. The creator of the NFT sometimes gets a royalty percentage each time their token is sold on the internet.
In order to sell your NFT, you have to first create it. You’ll be surprised to know that it’s not as hard as you might think. The first thing you need however is some cryptocurrency, preferably the one mentioned above, ETH as many NFTs are ETH based. You can buy it from just about any crypto wallet platform like Luno or Binance which are the most popular in Malaysia. However, we advise you check to see if these platforms are compatible with being linked to an NFT marketplace like Opensea or Rarible. You can check out more NFT marketplaces here.
Once you’re in the marketplace and have your artwork saved on your device, all you need to do now is to upload it as an NFT. Many marketplaces usually give you the option of choosing to make the artwork a single NFT or multiple NFTs (i.e. one of 10 or one of 50 NFTs). From there, you can either put it up for sale or simply store it in your crypto wallet. Processing fees will apply when creating your NFT so please conduct enough research on your marketplace of choice before going into it.
Voila! That’s how you can go about creating your first NFT!
Major sports organisations like the UFC and the NBA have turned highlight reels from fights and matches into NFTs and selling it to the public with a percentage of the profits going to the fighters/players involved in the reel. The NBA have made over USD338 million in NFT sales alone from October 2020 to March 2021!
You are probably wondering how you can make money from NFTs. Well, once you’ve created your first NFT on your marketplace of choice, you’re given the chance of putting it up for sale or even an auction on that same site.
Remember, the NFTs sold will be paid for in ETH and a processing fee will likely apply. Most crypto wallets will allow you to sell the crypto you gained for actual currency and transfer it into your bank account.
From what you’ve just read, it might seem that NFTs look to be all dandy and well but there have been a few issues pointed out by experts with the main being fraud. Not all NFTs verify the person selling them is the authentic owner, meaning that anyone can just come up and say ‘I’ll sell you this NFT of the artwork that I created!’ whereas in reality they are not the original creator.
Another concern raised was that when it comes to digital art, although ownership is subject to the user that bought the NFT, it won’t necessarily stop others from copying it or editing it since it’s out there on the internet for all to see.
If you’re looking to get into the NFT marketplace, make sure you conduct the right research on the platforms you’re looking at, the NFTs you’re looking to buy or sell before jumping on the bandwagon.
Photo by Tezos on Unsplash
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