NFTs: What are they?
For most of us, the first time we heard the term NFT probably occurred this year. However, hearing the term and knowing what it means are very different and so today we will look into the topic and hopefully answer your queries regarding NFTs, allowing you to get involved in this dynamic and increasingly lucrative market.
What is an NFT?
It is easy to become distracted by the numbers when discussing NFTs, but as we always say, context is key, so first let’s unpack what they actually are. Literally, NFT is the acronym for a Non-Fungible Token, a unique digital asset which can be traded, but in exchange for cryptocurrency and not an identical copy. It is the uniqueness of these assets which give each one an independent monetary value, explaining how the collectable nature of these tokens has become so popular.
How do NFTs work?
NFTs tend to be part of Ethereum blockchain technology, a concept we have explained in the past when talking about cryptocurrency, though they differ as they retain additional information which means they do not work in the same way as the Ethereum cryptocoins. As we mentioned, they are unique, so trading doesn’t work the same as with crypto and making transactions in everyday life with them would work differently too, though at the moment, art and property are commonly represented digitally through NFTs.
I get that this is a lot to digest at once, but to compare this to a real-world example, art collectors may buy a one-of-a-kind piece from someone who already owns it, transferring funds and in return receiving the painting, and NFT trading works the same way. Something you may all be interested to know is that NFTs also have ownership logged in public records, reducing the possibility of you being scammed while trying to buy one.
How can I make or buy my own NFTs?
If you have made it this far and are not put off by all of the jargon, we can now move on to the exciting stuff, the buying and selling of these assets. Below you can find what is basically a step-by-step to making your own NFTs and also buying them too:
1. Create a crypto wallet for Ethereum
2. Purchase some ETH for your wallet
3. Link your ETH wallet to an NFT marketplace (it’s up to you which one)
4. To create an NFT you can visit your preferred marketplace, upload the photo you want to use and choose the sale price as well as the royalty settings for every future sale of your NFT
5. In terms of buying an NFT, you would skip step 4 above and simply browse the NFT marketplace you chose beforehand and spend the ETH your bought for your wallet on the NFT of your choice
This really isn’t as extensive a process as you may have thought, especially after the complexity of the definitions and how they work, at least, I was surprised to find out that they can be bought and sold like most other things on the internet, probably closest to eBay as there are auctions for some NFTs where the highest bidder gets the asset.
So, if you are interested in finding out more, contact us today! Below this article you will find a link to set up a free fifteen-minute consultation with us to discuss your options further. At Creimerman, our team of professional global citizens would be happy to help you with your personal or professional cross-border ventures and help make them a success.