BlockchainTechnology

A Quick Guide to Non-Fungible Tokens

A breif About NFT

Look at the biggest cryptocurrency trends in 2021, and you’ll find NFTs topping the charts. Non-fungible tokens or NFTs have reshaped the way people view and collect digital assets. Whether it’s Grimes selling her artwork for millions or NBA digital collectibles being sold for millions, NFTs have certainly changed the way digital assets work. 

Not only does this provide a new investment option, but it also opens the gates for artists and musicians to work with a blockchain development company and monetize their work online.

If you’re new to NFTs, here’s all you need to know about them.

What Are NFTs?

A non-fungible token (NFT) is a kind of cryptographic asset that represents something unique. It could represent a physical or virtual real estate or art. Think of NFT as a collectible coin of value. Each NFT is unique and authentic, like real artwork, which creates scarcity and increases its value. The applications of NFTs spread across areas where unique digital items are required, such as digital collectibles, online gaming, and crypto art.

Fungible vs. Non-Fungible Tokens

To better understand the concept of NFTs, you’ll need to first understand the difference between fungible and non-fungible tokens. Fungible tokens are assets that have the same value. Cryptocurrencies like Bitcoin, Etherum, Litecoin are all fungible assets. 

For example, if the price of Bitcoin is $50,000, each Bitcoin token is worth $50,000. If you have three Bitcoin tokens, you have $50,000 x 3 worth of Bitcoin.

That’s not the case with non-fungible tokens. Each non-fungible cryptocurrency unit is unique and not replicable. If you trade an NFT for another NFT, what you’ll have will be something entirely different. 

How Do NFTs Work?

While NFTs are platform-specific, most of them are a part of the Ethereum blockchain and are created and traded on Ethereum. Etherum is a cryptocurrency like Bitcoin or Litecoin, but its blockchain supports NFTs as well. Some other cryptocurrencies, like TRON, have also implemented NFTs, but we’ll focus on Ethereum for now. 

NFTs are developed on Etherum’s blockchain, either by a crypto exchange development company or an individual crypto developer. They are immutable – once created, they can’t be altered, and their owners can’t be undone. Moreover, they’re permissionless, meaning that anyone can buy, sell, and create an NFT without seeking permission. 

But if you had to think of the working of NFTs in the simplest form, think of the Mona Lisa painting by Leonardo Da Vinci in a digital form that can’t be replicated. It had been unique, and thus, would’ve had substantial market value. NFTs are also digital artwork, just like an image. What makes them unique, however, is their existence as a digital entity on the blockchain. 

Why Do NFTs Have Value?

Before buying anything, you’ll certainly want to know if it’s worth it. So yes, it’s essential to consider why you should be willing to spend your money on a digital asset or artwork. 

While the “value” aspect is there, NFT should be valuable to you because you like it. Why would you buy you an artwork, say the Mona Lisa? Because it looks amazing, right? The same goes for NFTs. In some ways, they’re just digital images that you would want to own because you like them. 

But unlike other digital images, NFTs can’t be copied. You can’t find them on any website and download them. They reside on the blockchain, which makes it almost impossible to replicate them entirely. 

NFTs can be valuable in other ways, as well. Suppose you have a digital asset in a game, such as an extremely rare weapon skin in Fortnite or Valorant. Having that asset in the form of NFT can give you special prestige. You can sell it for money or trade it for some other rare object. If you play games like Elder Scrolls and Lords of Rings, you probably already know how valuable a weapon or piece of armor can be.

CyptoKitties, a virtual cat breeding game, was one of the first games to introduce NFTs. The game sold virtual cats for thousands of dollars. 3LAU, an American DJ and musician, recently sold 33 limited-edition NFTs for $11 million. Grimes, a Canadian Musician and the significant other of Elon Musk sold her digital art collection for $6 million. So yeah, digital assets can get significantly expensive. 

Look at this NFT artwork by Grimes.

NFT Artwork
Source: ThisSongIsSick

How to Buy and Trade NFTs?

Buying and trading NFTs is no different than trading other digital assets like e-books, royalty images, etc. You can visit an NFT marketplace, find an NFT, and buy it just like you buy any other product on the internet. Here’s an example of an NFT listed on OpenSea, a popular NFT marketplace.

OpenSea
Source: OpenSea

There are numerous marketplaces where you can buy and NFTs. Some popular ones are:

  • OpenSea
  • SuperRare
  • KnownOrigin
  • TreasureLand
  • Arkane Market
  • NFT ShowRoom

How to Create NFTs?

First, why would you want to create an NFT? Well, if you’re an artist, you might be looking for a secure, immutable way to monetize your work. Here’s where NFTs can help. By turning your artwork into NFT, you can eliminate the risk of duplication and piracy. 

However, NFTs have their own setup process. You need to set up a digital wallet to store NFTs, and then head to an NFT marketplace to create a digital art NFT. To make an NFT, you need to upload the image, video, audio, metadata, and NFT name. This entire process can be technical, confusing, and tedious. 

Therefore, it’s best to work with a blockchain development company. Working with experts ensures that the entire process is smooth and free of any errors. Furthermore, they can help you find the right marketplaces to list your NFT so that you can generate more sales and revenue. 

Our Work

Artwork Crypto Collectible Project

Artwork Crypto Collectible Project

Artwork is a Crypto collectible project developed on Tron blockchain where users can collect the artwork of the other users and reproduce unique artwork.

  • A cryptographic hash is assigned against each Artwork.
  • AI and computer vision techniques are used for image recognition and merging to create a unique piece of art.
  • Enabled with smart contracts the art ownership can be transferred to another person.
  • With blockchain create, collect, upload and purchase new Art pieces.
  • Users can merge uploaded digital art with others uploaded one to create a unique Art.

Contact us: info@quytech.com

Conclusion

Is NFT a good investment? Sure, it is, but it’s essential to understand the difference between buying an NFT because you like it and investing in NFT to earn money. If you want to invest, make sure that you do your homework. On the other hand, if you’re an artist who wants to monetize his or her artwork using NFTs, working with NFT Marketplace Development Company is the way to go.