PRYZ Educates — What is an NFT?
This week we will talk about NFTs, what are they and what do they do.
Non-fungible tokens, or NFTs, are the latest cryptocurrency phenomenon to go mainstream. And after Christie’s auction house sold the first-ever NFT artwork — a collage of images by digital artist Beeple for a whopping $69.3m— NFTs have suddenly captured the world’s attention.
So what are NFTs?
In the simplest terms, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.
Although that may be far from simple for the uninitiated to understand, the payoff has been huge for many artists, musicians, influencers and the like, with investors spending top dollar to own NFT versions of digital images. For example, Jack Dorsey’s first tweet sold for $2.9m, a video clip of a LeBron James slam dunk sold for over $200,000 and a decade-old “Nyan Cat” GIF sold for $600,000
But NFTs aren’t exactly new. CryptoKitties, a digital trading game on the cryptocurrency platform Ethereum, was one of the original NFT’s, allowing people to purchase and sell virtual cats that were both unique and stored on the blockchain.
What are NFTs?
Non-fungible tokens, or NFTs, are pieces of digital content linked to the blockchain, the digital database underpinning cryptocurrencies such as bitcoin and Ethereum. Unlike NFTs, those assets are fungible, meaning they can be replaced or exchanged with another identical one of the same value, much like a dollar bill.
NFTs, on the other hand, are unique and not mutually interchangeable, which means no two NFTs are the same. Think of Pokémon cards, rare coins or a limited-edition pair of Jordans: NFTs create scarcity among otherwise infinitely available assets — and there’s even a certificate of authenticity to prove it. NFTs are typically used to buy and sell digital artwork and can take the form of GIFs, tweets, virtual trading cards, images of physical objects, video game skins, virtual real estate and more.
How to buy NFTs
Essentially, any digital image can be purchased as an NFT. But there are a few things to consider when buying one, especially if you’re a newbie. You’ll need to decide what marketplace to buy from, what type of digital wallet is required to store it and what kind of cryptocurrency you’ll need to complete the sale.
Some of the most common NFT marketplaces include OpenSea, Mintable, Nifty Gateway and Rarible. There are also niche marketplaces for more specific types of NFTs, too, such as NBA Top Shot for basketball video highlights or Valuables for auctioning tweets such as Dorsey’s currently up for bid.
How to sell NFTs?
NFTs are also sold on marketplaces and the process can vary from platform to platform. You’ll essentially upload your content to a marketplace then follow the instructions to turn it into an NFT. You’ll be able to include specifics such as a description of the work and suggested pricing. Most NFTs are purchased using ethereum but can also be bought with other ERC-20 tokens such as WAX and Flow.
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