Isn’t it crazy when you see someone buy a JPEG image for millions of dollars? Especially when you could find similar images on the internet and download it for free. Take a look at the rock here. Someone spent over $500,000 to own it!! The idea behind Non-Fungible Token (NFT) is to have creations like art and music uploaded and stored on a blockchain (which can be thought of as a decentralized database) with benefits in return like ownership credibility, non-fungibility and tradability.
Table of Contents
Let’s start with what Fungible and Non-Fungible mean. Fungible is anything that you can exchange or replace with another identical item. The exchanged items will have the same value. A dollar bill or a bitcoin you have is fungible. They are divisible and can be reproduced with no one being able claim their dollar bill is the original. Non-Fungible items are original/ unique and indivisible. Examples are deeds, domain names like google.com, airline tickets etc. Yes of course, you can make copies of a deed. But there is only one original and there is someone who owns the original which virtually makes it more valuable than the copies.
As covered in our previous blog, NFTs are unique items like art, collectibles, tokens and membership in digital form. Creators like musicians, authors, artists among others can upload their content in JPG, PNG, GIF and other file formats on a distributed public ledger like blockchain. Each NFT has a unique ID and metadata. All such relevant information of an item is further stored on the blockchain. The process of creating an NFT is called minting or tokenization for authenticity. You can mint/create on NFT marketplaces like OpenSea and NFTically. Once ‘minted’, your NFT can be traded on such marketplaces (that also act as secondary markets) with the capability to retain a certain % of royalty every time it changes hands. NFT minting/creation process over time has become very easy that you and I can do so in a few minutes today.
As mentioned above, creating NFTs doesn’t require any coding skills. It’s all made easier with ‘drag-and-drop’ functionality enabled by today’s user-friendly database interface. You can choose any blockchain & NFT marketplace of your choice to mint a Non-Fungible token. Ethereum is the most popular blockchain ecosystem for NFTs, metaverse, DeFi and other web 3.0 utilities. However the high demand plus its self imposed scalability limit only makes Ethereum more expensive to use. Efforts to make it more scalable are in full swing. Hence we can expect the network will be more affordable and faster in the future that would compliment its popularity for the users.
In the meantime, many people foresaw this situation quite a while ago and helped launch standalone layer 1 blockchain networks that are affordable and faster to use. And these networks are actually giving Ethereum a run for its money. But Ethereum, through its truly innovative EVM/smart contracts layer, ably competes by hosting many scalable layer 2 blockchains that are built on its network. So users and investors retain all the advantages Ethereum would have initially wished for – massive reach and affordable (fee = gas in Ethereum terminology).
It is easy to find the NFT minting process online these days. And many of them involve paying some fee upfront. Some are affordable while others aren’t. Competition is not limited to blockchain networks. We now have several NFT trading marketplaces competing against each other to facilitate peer to peer transfer of digital assets with low or no costs upfront. Perhaps the most popular of them all is OpenSea where creators/users can mint NFTs on Ethereum blockchain or Polygon (layer 2 solution on Ethereum). Let’s now venture into how to create NFTs for free on OpenSea.
Your NFT can now be traded now for real money. You can list your NFT for sale on OpenSea itself. Once you find a buyer, you will receive the funds in your wallet.
Want to know how to mint NFTs? 👀 Go through this article of How to Mint NFTs With Utility Gas-Free
NFT space has seen rapid growth in the era of digital assets. If I am not a creator, I can look forward to investing in NFTs – buy low and sell high to make profit. In fact, it is the investors who often make large amounts of money. The good news for creators is that they can earn a certain %, as decided by them when minting the NFT, as commission whenever it changes hands.
You could literally see investors purchase a NFT for under $10 and listing it for sale for thousands. Yes, that’s another beauty of NFT and the technology. Since NFTs typically live on open source and transparent blockchains, every NFT will display its historical transactions. As an investor, that also allows you to gauge the demand of a NFT.
NFTs are also finding relevance in blockchain games, especially play-to-earn games, as in-game collectibles. Creators can aim to sell collectibles, club memberships, profile pictures in the form of NFTs to their respective audiences besides investors. NFTs are also housed in metaverses like Decentraland and Sandbox sharing spaces with virtual real estates, shopping centers, fashion shows etc. NFTs may not be liquid enough for an average creator today but they look extremely promising for the future. So learning more about them and staying up to date with Web 3.0 in general makes a good investment for the future.
What is Layer 1 Blockchain | TVL Blockchain | How Lisk Works | EVM Virtual Machines and EVM Chains | Solidity Data Types | Slope Wallet Vulnerability | What is a Blockchain Fork | Types of Decentralization in Blockchain | Physical Layer in OSI Model | What is a Crypto Exchange | What is a Blockchain Platform | NFT Risks and Challenges | What is a Cross-Chain Bridge | What is a Mainnet | Types of Sharded Blockchain | List of Wrapped Tokens | Quantum Computers and Cryptography | Crypto Faucet Apps | Cryptocurrency Business Model | EVM Wallet Address
Opinions expressed in this publication are those of the author(s). They do not necessarily purport to reflect the opinions or views of Shardeum Foundation.
About the Author(s):
Siddesh is a Computer Science student & freelance web developer who believes in the future of Web 3.0. He loves to contribute to the growth of Web 3.0 by creating content on finance & cryptocurrencies. You can check more on his Web 3.0 focused content here.
Subbu is a fintech blogger @ his website livingstable.com. Through his contents, he seeks to guide people to utilize financial resources online and realize the power they have on their fingertips. Follow him on LinkedIn and Twitter
Stay updated on major developments about Shardeum.
Thank you!
Crypto metaverses are virtual spaces with vast social and financial dynamics. Refer this blog to know what is metaverse...
In 2021, nearly $2 billion (£1.75 billion) has been spent on virtual land as individuals and businesses compete for a foothold in the Metaverse. Real estate is prohibitively expensive. However, some...
Introduction NFTs have become increasingly popular among investors and digital art enthusiasts in recent times. For the uninitiated, an NFT is a blockchain-based token that can be used to prove...
