What does NFT stand for?
NFTs are the new buzzing word on the internet. Everyone has heard it but most of them might have wondered: what does NFT stand for anyway? NFT stands for non-fungible token. The term non-fungible means one that is non-interchangeable or irreplaceable. It is unique and cannot be substituted for anything else. This is important to retain the originality of any product. Hence, NFTs are immensely attractive to artists. These non-fungible tokens run on the blockchain technology principles, thus free of any government or centralized control. To know more about NFTs, check out our article: What is NFT? A brief guide to blockchain.
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How are NFTs beneficial to the artists?
An NFT could be any digital asset, such as artworks, audio clips, videos, jpeg files, etc. For example, Jack Dorsey sold his first-ever tweet as an NFT, valued at $2.9 million. He later donated all his earning from the NFT sale to GiveDirectly, to help people in Africa who are suffering from poverty. Currently, the internet is buzzing with news about NFTs. However, one of the kinds of people who shall benefit the most from this new technology is artists.
NFTs are one of the best ways to monetize artists’ works. Many artists already monetize their works by creating accounts of various e-commerce websites, personal shops, etc. But what makes NFTs unique? First of all, NFTs retain the originality of the product. This is an inherent property of NFTs, which are non-fungible. Only one copy of the artwork can exist as NFT as each NFT is unique.
After one creates an NFT, one can decide a price for that NFT and put it for sale. Once another person buys the NFT, the new buyer gets ownership of the product. However, the benefits for the original creator do not end there. As long as the artwork is on the market, the original creator receives a small commission every time the product goes from one buyer to another. The original creator will continue to receive royalties from his creation for every passing transaction for the rest of their lives.
Increases reach and accessibility
NFTs run on a digital market. One of the biggest perks of the internet for entrepreneurs or creators is the reach that the online market facilitates. NFTs have a greater reach than other physical products since NFTs are digital assets. Moreover, NFTs have widely improved the accessibility of products to the consumer since these products can view them anywhere with an active internet connection.
NFTs establish concrete ownership of any product, which is reinforced by the fact that NFTs are unique. Minted NFTs are recorded on blockchain technology, which holds the data regarding the owner of the particular product. With NFTs, creators will have better authority over their products can quickly sell their products online.
Elimination of third-party platforms.
NFTs provide another benefit where they minimize artists’ dependence on various third-party platforms. They will no longer have to worry about which e-commerce website will best suit their product for launch and one that will guarantee more buyers. In addition, once a product is made into an NFT, it is exposed to many people involved in the market and makes the entire process of selling its product very simple.
Since NFTs are a relatively new concept, few people know this tool. However, an increasing number of people are learning about NFTs and investing in them with each passing day. Soon, they could be a powerful platform for artists worldwide.
Where can artists sell NFTs?
The most popular websites to create NFTs are OpenSea, Raible, KnownOrigin, Market Place, Mintable, etc. To make or buy an NFT, you will first need a digital wallet to store your cryptocurrency required to perform any transaction. The most commonly used cryptocurrency is Ethereum.
The creator will have to pay the host website’s fee for uploading their works. When buying an NFT, one must pay the gas fee required to run the blockchain. Connecting your digital wallet to the NFT market enables you to perform these actions efficiently. The buyer will gain ownership of the product once the purchase has been made.
Do NFTs fairly value the art?
Though NFTs are essentially a positive step for the artists, there is a rising concern about how the art is valued. The value of NFT is mainly dependent on Ethereum as it is the most common means to buy NFTs. The crypto market is highly volatile and will affect the valuation of NFTs. Many believe that the artwork is mostly overpriced. However, in a converse scenario, when cryptocurrency dips due to a market crash, most NFTs suffer from a low product valuation.
NFTs are the new hot topic of the internet, and many investors are curious to explore this new field to grow their wealth. For creators, this could be a game-changer in influencing their career growth. However, since it is a relatively new concept, the market of NFTs is small. Unlike the stock market, there aren’t many people who interact with the NFT market as frequently.
NFTs find a significant reliance on the crypto, and hence its volatility. It is one of the many qualms of people who want to invest in NFTs. However, with better exposure, more people are willing to explore the NFTs. Seeing the current trend amongst the young population, many people are willing to take risks with their money by testing different investment strategies. The power of social media also contributes to promoting the NFT market.
One can only predict the fate of NFTs, but from the looks of it, they are here to stay for quite a while.