About an NFT Token

NFT that stands for "Non-Fungible Token,” is a digital asset at a basic level. It is proof of ownership of unique physical or digital items, like real estate, works of art, videos, or music sold online. Also, NFT is a unique token that can be considered a modern-day collectible. NFTs are securely recorded on a blockchain - the same technology behind cryptocurrencies - ensuring the asset is one-of-a-kind. Blockchain technology can make it difficult to counterfeit NFTs or alter them.

What Is The Difference Between Fungible and Non-fungible?

In the digital world, items, especially works of art, can be categorised as fungible and non-fungible. Here is the difference:

• Fungible items can be swapped easily because their value isn't tied to uniqueness. For example, you can exchange an R1 note for another R1 note, and you'll still have R1 actually; your new bill has various serial numbers.
• Non-fungible items aren't interchangeable. With NFTs, each token has unique properties and isn't worth the same amount as other comparable tokens.

What Makes An Item Non-fungible?

Four main factors make an item non-fungible:

1. exchangeability,
2. aunique digital signature,
3. tradability, and
4. distributed public ledger. 

How Lucrative is the NFT Business?

Selling NFTs has been a lucrative business in the art world. Here are a few of the significant examples:

• Digital artist Beeple sold "Every day's - the First 5000 Days" for $69.3M in a Christie's auction.
• A 20-second video clip of LeBron James's "Cosmic Dunk #29" was sold for $208,000.
• A CryptoPunk NFT sold for $1.8 million at Sotheby's first curated NFT sale.
• Twitter former CEO Jack Dorsey auctioned an NFT of his first tweet, which was sold for $2.9 million.

Why Do Non-Fungible Tokens Matter So Much?

There are many reasons why NFTs are of great importance. A non-fungible token uses the same blockchain technology that powers cryptocurrencies and is unique. However, they're not a currency, thus making it scarce, provable, and valuable. The origin of NFTs has created a new medium for creators and artists to showcase their collections or creations. In turn, a revolution paves the way for artists to develop and monetise their work while collectors have full transparency into the provenance of their purchases and authenticity. Designers continue to push the limitations of creativity using NFTs, innovative ways and adapting them further.

What are the four main things that make an NFT valuable?

1. First, just like bitcoin is so popular because it was the first cryptocurrency, the first NFTs of businesses or specific creators also have value; for example, Pokemon cards are quickly gaining popularity and the most expensive cards.
2. The second thing that makes an NFT valuable is its utility, the real-world benefits, so imagine if Elvis Presley was still alive. He sold 50 NFTs; now, by owning one of them, you could lifetime access to any of the shows he participated in.  Such NFTs would quickly become popular and very expensive due to their real-world benefits.
3. The third thing that makes an NFT valuable is its rarity. Take the Mona Lisa as an example, anyone can own a copy of the Mona Lisa in the room, but only one person or a museum, in this case, has an actual painting by Leonardo Da Vinci for everyone to view.
4. The last thing that makes an NFT valuable is the ownership history. For example, Robert Downey Jr decides to sell his leather jacket and buy a new one. When he first bought that leather jacket, maybe he paid 200$ for it, but an ordinary person might pay 800$ to have the same coat that Robert Downey Jr wore; the same goes for NFTs.

How Do NFTs Work?

Many NFTs are stored and created on the Ethereum network, although other blockchains (such as Tezos and Flow) also support NFTs. The NFT ownership can be efficiently verified and traced because anyone can review the blockchain, while the entity or person that owns the token can remain pseudonymous.

NFT and Rights

Different digital goods are "tokenised," like artwork, items during a game, or video from a live broadcast. Depending on the NFT, the licensing rights or copyright won't include the acquisition, but that's not necessarily the case. Like how buying a limited-edition print doesn't necessarily grant you exclusive rights to the image.

NFT Applications

NFTs could have many potential applications beyond the art world as the underlying technology and concept advances. For example, a faculty could issue an NFT to students who have earned a degree and let employers quickly verify an applicant's education. Or, a venue could use NFTs to sell and run tickets, potentially reducing resale fraud.

How Secure is NFT? Can Someone Copy My NFT?

Well, technically, yes! Someone can copy an NFT just like any other piece of artwork, but the original NFT address can be traced back to the original creator since all NFTs have a log of their transaction history. Also, someone can create a new NFT pointing to the same hosting address the original NFT does. Or they could tell it to a different address of the same image or gift the value in an NFT is not the image. It's the specific piece of data, like making a free throw at my local YMCA Lebron James could toss one in while 30k people are watching. Even though these are the same thing, one has way more value based on what other people think.

It’s Digital, So Why Not Just Take a Photo of It?

Many people wonder if they could take a picture of the NFT without purchasing. It is often true, but you would not be able to sell it at its original value. Similarly, if you took a photograph of the Mona Lisa, it might be challenging to seek out a collector. When the NFT moves on the secondary market, the new owner and the price paid are automatically recorded on the blockchain, a digital archive of transactions nobody can alter, and everybody can see. The thought is that by having these certificates of authenticity publicly available for everybody to look at online, NFTs can guarantee the provenance of any asset to which they're connected.

Who Created The First NFT?

The history of NFTs and the first creator, Kevin McCoy, began on May 3, 2014. He minted his non-fungible token "Quantum" way before the crypto art market exploded. He and his wife Jennifer have established themselves as first-rate digital artists over a few years. "The NFT phenomenon is deeply an element of the art world," says McCoy.

Who Can Create NFTs?

Anyone, from entrepreneurs to artists, art advocates, corporations, authors, videographers, social media personalities, and even average Joes and Joannas, can create an NFT. No experience is critical, and as long as someone can prove they made or legally own the content, they'll mint an NFT.

What's The Difference Between NFT and Cryptocurrency?

Cryptocurrencies and NFTs depend on similar underlying blockchain technology. NFT marketplaces can also require people to get cryptocurrency with NFTs. However, they are created and used for various purposes. Cryptocurrencies aim to act as currencies by letting you sell or buy goods or either storing value. Cryptocurrency tokens are fungible tokens like fiat currencies, like a dollar, but NFTs create one-of-a-kind tokens showing ownership and conveying rights over digital goods.

How to Buy an NFT

You can trade, buy, sell, and create NFTs in online marketplaces or exchanges. The creator or current owner selects a selected price. Or, there is also an auction, and you may bid on the NFT. The following is a list of BFT marketplaces:

• Foundation is a community-curated marketplace that needs creators who are already parts of the platform to be invited by other creators.
• Nifty Gateway is an art-focused marketplace that works with big-name athletes, brands, creators.
• OpenSea is one of the introductory and largest marketplaces.
• Rarible offers a variety of NFTs with stress on art, and it uses its own RARI token to reward members.
• Super Rare is a marketplace that focuses on curating and offering digital art.

Where Do You Store Your NFT?

Well, you need to store an NFT in a wallet to make sure it's safe and accessible. The best way to keep your NFTs is on a hardware wallet, something along the lines of a ledger Nano where it can be offline and protected. But if you want to keep it online, metamask.io, Trustwallet.com, and Engine.io are some online applications that host wallets for you.

Some of The Most Valuable NFTs

1. Crypto Punk 6965 was sold for 800 ETH on Feb 19, 2021.
2. Crypto Punk 4156 was sold for 650 ETH on Feb 18, 2021.
3. Crypto Punk 2890 was sold for 605 ETH on Jan 24, 2021.
4. Dragon Crypto Kitty was sold for 600 ETH.
5. Crypto Punk 6487 was sold for 550 ETH.
6. Some lands in the Decentraland world were sold for 514 ETH.
7. Hash Mask 9939 was sold for 420 ETH.
8. Crypto Punk 2140 was sold for 400 ETH.
9. Some lands in the Central Land world were sold for 345 ETH.
10. The Famous Nyan Cat was sold for 300 ETH on Feb 19, 2021.

Is the Future of NFT Promising?

Many experts within the crypto industry say that around 40% of the latest crypto users will use NFTs as their entry point. Because of its growing popularity, NFT could represent a more significant part of the digital economy in the future. While the history of NFTs is intriguing, the long run of NFTs has endless opportunities because the new space transitions from raw and experimental to exceedingly more valuable and mainstream. 

Can NFT Be a Part of Future Life?

Through tokenisation, programmability, collaboration, royalties, and more direct connections between artists and collectors, NFTs may soon be a technology vital to the standard of living. However, we are all predicting based on the present evidence, and no one is entirely sure of the future events. Maybe the upcoming hit of NFT is much bigger than we expected!

Final Remarks

Good timing is one of the most critical factors in anything cryptocurrency-related. Back in 2009, when Bitcoin was first created, very few acknowledged the powerful technology behind it and the opportunities it could bring in the not-so-far future. Many thought of it as nothing more than a scam. History repeats itself; the same thing happened with Ethereum and NFTs.

Having said all that, remember that we are no financial advisors, and we're not providing any financial advice at Cryptologi.st. Instead, we are providing you with the information you need before investing in any project so that you can make the most confident financial decision based on your unique situation.