WHAT ARE NFTS?
NFTs aka Non-Fungible Tokens. Are they worth the hype or just another fad to stay away from? Well depends on whom you ask. Some are using it as a means to collect genuine artwork and make a living, others don’t want to get into the complexity of it all. Is it like bitcoin? Can you sell anything? Does it even have any real-world value? How safe is it?
As a spectator when news regarding NFTs being sold for millions appears, that’s when you halt and think wait what’s going on here? Is this something that’s mainstream now?
Well, yes and no. While the younger generation of artists and rich market players are quickly capitalising on this new space it’s still not something everyone in the household is keen on knowing.
NFTs, important or not, have made quite the splash and we’re here to break down this new Gen Z phenomenon for all you Popping marketers, artists, investors or anyone who’s interested ( appreciate the pun and move on, to the next section, ok? ok.)
NFTs are Non-Fungible Tokens. But just knowing what this acronym stands for probably confuses you more than it does help you understand the subject.
NFTs are basically an asset digital in nature which can represent art, movies, videos, music and any kind of content. They can be bought in cryptocurrency.
NFTs are made with the same kind of programming that is used to create cryptocurrency, the only difference being Bitcoin and physical money are ‘fungible’ you can exchange one bitcoin for another or one rupee for another rupee but one NFT however similar is not the same as another NFT.
Value of each NFT is based on how much someone else is willing to pay for it. Demand is therefore the main factor that drives the price rather than other outside factors. This also means that an NFT you buy can resell for quite less or quite high depending on its popularity among people. You can exchange an original Sholay signature movie poster with literally something from a new artist that catches your eye!
Are NFTs important? What even is the point of an NFT?
Well, the answer depends on who you are, an artist or an investor/collector.
If you are looking to put your art out, it means you already have a collection of original art with you. Kudos to that. NFTs can be a marketplace for any and every cool idea you come up with! A cool sticker? Your take on a famous painting? Literally whatever you want it to be!
An NFT is created or minted from digital objects. These can be tangible or intangible like art, gif, famous videos, designer items, or even a tweet. Pretty crazy? Well tweets can count too, one of the first tweets that Jack Dorsey, co-founder of twitter sold was purchased at a whopping $2.9 million.
Every time your NFT is sold or changes hands you get a percentage of the profit. This is known as NFT royalties as an artist when you register an NFT you can get up to 5 – 10% of each purchase depending on the website you are using.
How Do I Get NFT Royalties?
Let’s assume you’ve minted an NFT and asked for a 10% royalty. Then you sold an artwork for 10 ETH to a collector. You get the 10 ETH but also get an additional 10% every time the artist sells your artwork. So if your art keeps selling, the income will not stop!
Other than the general rights of you being able to use this image as a profile picture or upload it somewhere, it’s also great to own an original art piece with a blockchain to show proof of it being original. If you are a collector and want to invest in NFTs strategically you can buy an NFT and wait to resell it when the price shoots up!
Is every NFT unique?
YES, as it is part of a larger blockchain that records all the transactions and cannot be replicated, NFTs are unique. The fact that you cannot exchange one NFT for another also attests to this fact
Some of the craziest NFT purchases
This NFT is from an artist called Pak and it displays the days since WikiLeaks founder Jullian Assange was imprisoned. It was sold for $52.7 million. AssangeDAO raised bids for this piece and the proceeds were used to aid Assange’s legal defense.
One of the most famous NFTs ever! CrytoPunks were released along with 10,000 different versions. Each of these NFTs produced by LarvaLab quickly had a cult following and were purchased for millions of dollars depending on the version of CryptoPunk that was sold. CryptoPunk 1422 was sold for $2 million,CryptoPunk 7523 for $ 11.27 million and so on. Most of these punks are human characters but apes, zombies, and aliens are part of it too.
- Nyan Cat
Who knew a flying cat with an overflowing rainbow trail could be sold for millions? Well, the Nyan Cat has proved it’s possible. Once a famous meme, when minted as an NFT it was bought for about $590,000.
What are the risks?
It’s not all roses, NFTs have a lot of risks involved too. Multiple reports of fake markets, unverified sellers, catfishing original artists, and hacking the crypto wallet have raised a lot of concerns about the safety of this platform.
Just in February the world’s largest NFT marketplace OpenSea was attacked by hackers. Around $1.7 million was lost over 3 hours. The stakeholders were blindsided by such an ambush and panic was all over the platform.
What are some safe NFT marketplaces?
Feel like you have the information you came for? We’re glad!
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