If you’re one to keep up with news, you might have encountered the word NFT trending on several platforms. But what is NFT anyway? The term NFT stands for a non-fungible token, which means it cannot be interchanged or manipulated. So, in a technical sense, NFTs cannot be edited even by the owner once released into the blockchain. But why are NFTs such a hot topic on the internet right now?
Table of contents
The blockchain technology
If you’re an artist, you might know a thing or two about where and how to sell your product. But more often than not, you will find pirated copies of your creative works replacing the original product. What if you could have a system that ensures you all the copyrights and gives you a direct platform to sell your product to the buyers eliminating a third party? NFTs provide such a system.
NFTs work on blockchain technology, which focuses on decentralizing the online community. It is entirely transparent, meaning anyone on the internet who interacts with specific blockchain technology can see your activity. You will not have the interference of the government, banks, administrators to monitor your activity since everything is now under the public eye.
Bitcoin introduced blockchain to the world, and ever since, various other cryptocurrencies such as Ethereum, Dogecoin, etc., have appeared in the market. All of them work on blockchain technology, although the objective of different cryptos varies.
Currently, NFTs are most beneficial to digital artists or creators, as they are creative works that people can enter into the blockchain and sell to other users. So, if you’re an artist looking to sell your product, you can create an NFT for your artwork. Then, once another user buys your painting, he will inherit your product. However, the perk of the deal here is that, for the rest of your life, whenever someone sells your product to another person, you will earn a certain amount from that transaction. This way, you will be getting royalties on your product for as long as it is in the market.
Once a product enters the market, one cannot delete it or edit it. One will retain the copyrights of that product, and no third party can manipulate your authority. NFTs are a great way to protect your works and keep the ownership and originality of your product. NFT is a new thing in the market, but more and more people are growing curious about this new tool. Sooner rather than later, NFTs could be game-changing.
How to trade NFTs?
The first thing one requires before buying an NFT is a digital wallet. A few popular cryptocurrency wallets are Metamask, Math wallet, etc. However, most people use ETH to buy NFTs, and it remains one of the dominant cryptocurrencies in the market. Hence, one must check what currency the desired NFTs accept and add them to their digital wallet.
Once you have enough money in your wallet, you will want to look for appropriate marketplaces to buy NFTs. The most popular websites where one can buy and sell NFTs are OpenSea, Axie Marketplace. However, the Ethereum network charges you a fee while you purchase something, known as the gas fee. So when you intend to buy an NFT, you will have to pay the aggregate of the Ethereum or any other cryptocurrency fee and the original product price.
Similarly, when you desire to sell your product, you will have to pay the said gas fee and the host website’s service fee (such as Opensea). The gas fee is exceptionally volatile and varies by every second. This gas fee is essential to keep the Ethereum network running.
Can you delete NFTs?
Once a user sells their NFT to someone, one cannot delete it. Does this mean the NFT has to be on the market forever? Not really. If one wishes to make the NFT inaccessible, they will have to send it to a digital wallet that people cannot access. Such addresses are known as blackhole addresses. Hence, you cannot delete an NFT, but you can instead ‘burn’ it.
Should you invest in NFTs?
If you are a creator, NFTs are an excellent platform for you to exhibit your products. If your product clicks, you will receive royalties every time your product goes from one hand to another. One can also connect with the audience directly since it is a digitalized process. As a consumer, you will have the assurance that any product you have is original, and there will never be a risk of purchasing a pirated product. NFTs contribute toward securing the authenticity of the product.
NFT as an investment tool is relatively new to the market and unpredictable. If one has excess money and is willing to experiment with it, one can try investing in NFTs. But one should bear in mind that demand drives the NFT market, and its market size is small. Moreover, not many people know or understand the NFTs like the stock market. However, it has immense potential for growth in the coming years, and many believe that blockchain technology will soon dominate the world.