Everything you need to know about NFTs

Introduction to NFTs

NFT stands for Non-Fungible Token. Essentially, it's a digital asset that can take any form and shape. "Non-fungible" signifies that it is unique and cannot be substituted with anything else. 

There are several platforms you can use to purchase NFTs. The most popular ones include OpenSea, Rarible and SuperRare.

In order to purchase, store or even sell an NFTs however, you first need to first create a digital wallet. 

The mostly active wallet NFT collectors use is MetaMask. Below you can see how to set up MetaMask and link it to your NFT marketplace of choice. In this example, you will learn how to set up MetaMask and link it to OpenSea (Figure 1)

Figure 1 : Source OpenSea 

Figures 2:  Source Tokenized.com

If you followed the prompts above correctly, you should’ve started off setting up your wallet by first going to the MetaMask Website and then selecting “install MetaMask for Chrome”, if you're using chrome.

MetaMask is also available on a wide array of browsers. After you install MetaMask, it will ask you to enable the extension and begin setup. First, you will create a password for your wallet.

Then you will begin setting up a secret recovery key so you can access the wallet in case you forget your password.

Lastly, you need to confirm your secret recovery phrase to complete the setup of your MetaMask account.

Hopefully by now, you’ve set up your NFT wallet. Now you will link it to OpenSea.

Figures 3:  Source Tokenized.com

Reasons for Buying NFTs

If you followed the images above in sequence, you would have first gone to the OpenSea website, then selected profile, then wallet.

After this, you should select MetaMask and then hit connect. Congratulations, you have now linked your wallet to OpenSea!

People buy NFTs for various reasons; the most common is to either collect art or gain certain perks.

Some people purchase NFTs to create a collection similar to art collectors and have their own portfolio.

Recently NFTs offer utility, by offering access to certain communities which have virtual and IRL meetups similar to Gary Vee’s or the Bored Ape Yacht Club - a very prominent NFT collection.

Furthermore, some game developers have decided to merge the worlds of games and NFTs by allowing users to have access to the games if they purchase the game developer's NFT. 

On the other hand, SMEs have also started diving into the NFT world by offering their own NFTs to consumers, allowing them to get a discount at certain shops or attain some other sort of benefit from owning the NFT.

At the same time, more than 64% of people on the NFT marketplace try to make money by flipping NFTs for a profit, according to an analyst from the Hustle. Co.

In simple terms, it's a blockchain technology. Behind every single NFT you buy or currently own, there is a smart contract which is essentially the ‘title’ to your NFT.

Therefore, with this in mind, someone cannot just screenshot your NFT and try and sell it on any NFT marketplace as there are systems in place on all marketplaces to prevent someone from selling an NFT that isn’t yours.

If you own the smart contract and you have properly bought the NFT, then you will be able to see it in your portfolio and sell it if need be.

Evolution of NFTs

Since the time that NFTs started becoming popular and markets such as OpenSea started appearing, they were normally just JPEGs in most cases, even though anything can be an NFT.

However, recently they are now being purchased based on their utility, and the ‘utility’ of an NFT is what will really make this market thrive. 

Today, anyone can create an NFT, however, few can provide value with them. 

A great example of this is the Bored Ape Yacht Club collection, a very prominent collection name within the NFT space. 

The base price (minimum price) to purchase an NFT from their collection is around 87.5 Ethereum which equates to roughly $134,439. 

Figure 4 : Source OpenSea - Bored Ape Yacht Club NFT #5673

Anything can be turned into an NFT, a JPEG, floor plans for houses/apartments, audio recordings, and videos; the possibilities are endless.

Twenty football premier league clubs are considering the possibility of getting into NFTs, with players' faces as different NFTs. Fans could purchase these and possibly benefit from it, and could give them access to meet that player for a certain time.

A lot of NFT collections within their discord offer ‘free mints’ for their NFTs. Essentially free mints means that the person does not need to pay to receive the NFT, however, NFT communities/developers have made these free mints competitive.

Instead of just giving ten NFTs away for free for example, they make them complete certain tasks, for example spreading awareness of the project on their social media for that person to receive the NFT.

The NFT in Figure… was created and sold by Beeple for $69.3 million.