What are NFTs?
Where to find them?
How to create your own…
or how to buy one…
I’ve been covering this sector for a while, but there’s so much development and innovation happening right now, that it’s time to give you an up-to-date breakdown of it.
In fact, the NFT industry grew by 299% in 2020 and in the first two months of this year, we’ve seen exponential growth of this market, so clearly this is the year of NFTs, which is why we need to discuss them in simple language for those who are not too tech-savvy.
So, let’s start with what NFTs are.
NFTs can be art.
NFTs can be music.
NFTs can be collectibles, real estate, sports, fantasy football, gaming, internet ephemera and just about everything.
The term NFT stands for Non-Fungible Tokens, which in simple language means that these are tokens that have unique attributes, that make them different to each other. Unlike standard cryptocurrency tokens, that represent a unit of a currency, which is equal to another unit of that currency (a 10-dollar bill is equal to another 10-dollar bill or to 10 one-dollar bills, which is called fungibility), with non-fungible tokens, you have qualities and attributes that make them non-mutually interchangeable. This is why we use the term non-fungible.
It’s almost impossible to keep track of the latest NFT developments. To note just a few: The most famous artwork recently sold as NFT is that of Beeple, called “Everydays – The First 5000 Days”, which is basically a collage of all of his works that the artist has posted every day since 2007 on his website. This just fetched almost $70million at an auction at Christies and was bought by an NFT fund owner.
Some other examples: music artist Grimes sold an NFT bundle for $6 million; an NFT tweet from Mark Cuban sold for $952; Lindsay Lohan now mints NFTs; The band Kings of Leon, dropped NFT versions of their new album, there’s also tickets sold for live gigs – as NFTs and the list goes on and on…
CryptoKitties, one of the original NFTs, generated $433,454 in sales in the past week, according to NonFungible. The digital cats, which were developed by a start-up called Dapper Labs, were once so popular they clogged up the network of digital currency ether.
NBA Top Shot, also created by Dapper Labs in partnership with the basketball league, attracted $147.8 million in sales in the last seven days, according to NFT data tracker CryptoSlam. The service lets users buy and sell short clips showing match highlights from top basketball players.
A NBA Top Shot video highlight featuring LeBron James recently sold for $208,000, while CryptoPunks is the most popular series of gaming art. It was released by developers Larva Labs in 2017, but it’s boomed in popularity lately, generating $45.2 million in sales volume in the last week alone according to the website NonFungible.
On 19 February, an animated Gif of Nyan Cat – a 2011 meme of a flying pop-tart cat – sold for more than $500,000 and just a week ago the whole world was shook by the $69 million auction for Beeple’s artwork which brought the interest in NFTs to the mainstream.
The first popular NFTs were in fact gaming tokens.
Yes, indeed, there are already games that let you have NFTs as items. Some even sell virtual plots of land as NFTs and the most expensive NFT prior to that Christies auction was exactly a plot of land by one of these games. It was over a million dollars and I mentioned it in a previous episode of Crypto Corner.
The metaverse sector is still the biggest use case for NFTs and with the highest volume according to the latest statistics. I actually featured here on this channel one of these games that are part of the metaverse sector: OVR – they also offer virtual land and it’s still new and the prices of lands are still affordable, and their currency token OVR has tripled in price since I featured it on my channel. This is a utility token that is used as a currency and powers the whole ecosystem of the OVR – an Augmented Reality gaming project where you can create all kinds of experiences on the land you own, you can even create live entertainment and charge people for tickets to enter and all kinds of things – basically, you have an opportunity to create a business in a Virtual reality world, that you run from home and earn real money with it. There are already people who have made tons of money this way. On top of that, you can simply just buy and sell these pieces of land or maybe just rent them out to other users, so you make a profit passively.
The opportunities are endless.
You can find my interview with their co-founder and learn more about this cool project in this video episode of Crypto Corner.
With prices for collectible NFTs soaring and reaching millions of dollars these days, owning just a portion of a piece of digital art is a new approach becoming more and more appealing to collectors now. This is a concept called Fractional Non-Fungible Tokens (F-NFTs) which was originally conceived in 2018 as a way to offer shared ownership.
There’s already some services that provide such shared ownership for selected works and now I saw news about a DEX which is forked from Uniswap, and which will be exclusively focused on trading F-NFTs
It’s just launched actually , on 16th March, it’s called DaoFi and it’s designed to solve the liquidity problem in secondary markets for NFTs whereby NFT owners have to wait for someone to bid or buy at an asking price for a single piece.
If you’re just getting into the NFT trend, you’re not too late.
If you are a creator – artist, musician, photographer, video producer or any public figure for that matter, you might want to get in on the NFT train because this digital format is allowing content creators to actually own the property rights for what they create, which allows them to profit from it in different ways which they can’t do with physical art. Especially when it comes to receiving royalties from re-sells. With NFTs, you can set up your fee for the future, when your work changes owners, so every time someone sells it to a new owner, you get your cut.
We don’t know if this is really just a trend or a form of digital ownership that will become some sort of a norm one day. But with everything else becoming more and more digitized, and people making crazy money from crypto and digital collectibles, it makes sense to at least test the waters and maybe get your feet wet a little bit, so let’s see what are the usual places where these unique tokens are created, sold and traded – for both artists or content creators and those who are on the collectors’ side.
Creating your own NFT artwork, whether it be a GIF or an image, is a relatively straightforward process and doesn’t require extensive knowledge of the crypto industry. NFT artwork can also be used to create collectibles like sets of digital cards.
Before you start, you will need to decide on which blockchain you want to issue your NFTs.
Ethereum is currently the leading blockchain service for NFT issuance. However, there is a range of other blockchains that are becoming increasingly popular, including:
Binance Smart Chain
Flow by Dapper Labs
SYS and Cardano are also just getting in this space, so there’s going to be more and more choice very soon.
Each blockchain has its own separate NFT token standard, compatible wallet services and marketplaces. For instance, if you create NFTs on top of the Binance Smart Chain, you will only be able to sell them on platforms that support Binance Smart Chain assets. This means you wouldn’t be able to sell them on something like VIV3 – a Flow blockchain-based marketplace – or OpenSea which is an Ethereum-based NFT marketplace.
What else do you need to get started?
Besides having some digital works ready – in any format you choose – jpg, gif, mp4, mp3, mov and so on…., the next step is to find a website which gives you the tools to turn this into a token. Some of the websites where you can sell your NFTs provide you the tools to create them, others would allow you to submit works that already created as NFTs with a different service, so there’s plenty of options. I’ll list here the most popular websites that provide services for creators as well as buyers of NFTs.
Most of these are operating on Ethereum for now, but the space is getting crowded and more blockchains are joining in, so soon you will have a much bigger choice, so you can avoid paying the high Ether fees which are charged at the point of minting your smart contract.
Yes, to create a NFT, you are technically creating a token that runs on a smart contract and has metadata embedded in it, plus some rules on how to operate and what data it can store, all of which are things that are possible via the self-executing smart contracts. When creating or selling such a piece, you are executing transactions on the blockchain which this smart contract is built on. Ethereum’s blockchain is the most popular and with the most transactions currently, so this results in a huge volume of transactions executed each second, which means the fees for these transactions have sky-rocketed to an all-time-high right now. This is also why we read about various proposals for scaling solutions and hopefully soon we will see these implemented, but in the meantime, you must be prepared to pay between $50 to $80 on average or even more.
Websites for NFTs (create, buy or sell):
Some websites do not charge you a fee to create your NFT, but they will charge you for listing it for sale and other operations.
Opensea is the one of these that gives you the freedom to create for free and it’s also the biggest marketplace currently. You can create single works, series and sell multiple copies of the same work.
Another one is Nifty Gateway which strives to be more accessible to buyers by allowing them to use a credit card to purchase items off the site.
SuperRare prefer one offs mostly and they also curate their artists, so you have to apply to become of their artists. This is similar to the conventional artworld, where galleries work with selected artists only and become their official representatives.
Other popular platforms to sell your NFTs are:
I just minted my first NFTs too. Take a look: https://opensea.io/collection/busyjordy
In a follow-up post, I will dive into the process of creating a NFT, so make sure you follow this blog and get email notifications when I post a new article.
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