Non-fungible tokens, better known as NFTs, have been making their way into mainstream culture this year. From “breeding” digital kitties to collecting NBA trading cards, the possibilities of buying and selling digital media are endless.
If you’re NFT-curious, one of the best ways to discover more is to create or purchase your very own NFT. If you already have a crypto wallet, it is fairly simple. Create your own by uploading a photo to OpenSea or check out the OpenSea marketplace to browse media. It only took me around five minutes to create my first NFT:
As a quick-fire way to help you sort the ins and outs of NFT trading, here’s a quick list of seven things you need to know about the NFT craze.
1. NFTs are not just for fintech nerds
The fact that NFTs leverage the Ethereum blockchain doesn’t scare off creators nor buyers. Multiple marketplaces, including the aforementioned OpenSea, Binance, and Rarible make it very simple to upload, buy, and sell NFTs. As Time reports, teenagers as young as 15 are already making millions of dollars by creating, buying, and selling NFTs.
2. NFTs are good for creators
Instead of sacrificing commissions to art houses, publishing companies, and other middlemen, creators can keep the majority of the purchase price for their work. OpenSea, for example, charges only a 2.5% fee. Additionally, some NFTs enable the artist to receive a royalty payment each time the NFT is sold or changes hands.
3. NFTs benefit buyers
The value of buying and owning NFTs is a bit less clear than the value for creators. Aside from exercising bragging rights, NFT owners can use the NFT as a speculative tool by buying and selling NFTs, or they could use their purchase as a way to more directly follow and support artists.
4. Anyone can create an NFT
As long as a user has a crypto wallet and is able to upload media, they can create their own NFT. My NFT is proof of this– while I am certainly not an artist (I failed art in the fifth grade), I was able to upload a photo I already had to quickly create my own.
5. NFTs are one-of-a-kind
As the name suggests, NFTs are non-fungible, meaning they cannot be exchanged with assets of the same type. In other words, unlike currency which can generally be exchanged one-for-one (I can pay you a dollar for your dollar), each NFT is completely unique.
6. Yes, NFTs can be copied or downloaded
Because NFTs are digital media, they can easily be reproduced. Anyone can take a screenshot of an original NFT or download a copy of a video. The value, however, is in owning the original NFT. As an example, there are many copies of Van Gogh’s Starry Night, but none are as valuable as the original.
7. NFTs can potentially bridge the digital/ physical divide
While NFTs are restricted to digital assets, it is possible to use NFTs as a type of verification method for the purchase of an original, physical item. For example, Nike has patented a way for sneaker collectors to track ownership and verify the authenticity of sneakers.
Photo by Fakurian Design on Unsplash