In the last couple of years, the world is buzzing about non-fungible tokens or NFTs and the digital asset’s drastically increased value from its distribution to purchases by individual investors and collectors. For example, the Cryptopunks NFT collection by Beeple sold for millions of dollars per piece.
The digital art world is optimistic about NFTs being the future of selling digital assets because their implied scarcity increases the value of artworks when you sell NFTs. They’re a unique digital asset that exists in virtual worlds, and buying and selling NFTs of a well-known artist might be your road towards financial independence. Read more in depth about NFTs.
Continue reading to learn more about NFTs and how you can buy them from Singapore.
What Are NFTs and How Do They Work?
NFTs are a new type of token on the Ethereum blockchain and are non-fungible. They are unique and cannot be replicated. The ERC-721 standard was designed to provide a set of rules for interaction with these tokens.
The ERC-721 standard is important because it is a protocol for non-fungible tokens (NFTs) on the Ethereum blockchain. NFTs are unique and cannot be broken down into smaller parts and exchanged. ERC-721 provides a set of functions and events that can be used to create and manage these tokens.
Smart contracts are pieces of code that can be executed on a blockchain to facilitate, verify, or enforce the negotiation or performance of an agreement. These contracts are completely automated and self-executing, adding to NFT and crypto’s decentralized elements. In other words, NFTs are cryptocurrencies that can hold other media, allowing you to create artwork and smell them using smart contracts.
What are NFT ‘Gas Fees?’
Ethereum gas fees are paid for the computational power needed to execute the different operations on the Ethereum blockchain. These fees are paid to miners to incentivize them to keep mining blocks on the blockchain.
To explain this further, the Ethereum network is made up of many nodes run by miners. Computational power is needed to mine blocks added to the blockchain. To incentivize miners, Ethereum includes a gas limit and a gas fee, which are the amount of gas collected per block and the cost of one unit of use, respectively.
Why Should You Buy in NFT Marketplaces?
An online marketplace for users to buy and sell virtual goods, typically powered by blockchain technology. The safety of these marketplaces is a result of the immutable and decentralized nature of the blockchain. Transactions are trustless and impossible to alter or compromise. This safeguards against any malicious changes to a product’s data.
Here are the best benefits of owning NFTs.
1. Exclusive Ownership
Non-fungible tokens (NFTs) are specific tokens with a unique identity and cannot be interchanged. The token owner is granted exclusive rights to use and manage the token as a form of digital property. Therefore, any NFT artwork you own that came from a digital artist gives you the permission to own and make a collection out of their artwork.
For example, NFT game items can have a unique serial code that cannot be divided and tampered with, making them valuable in-game assets without any fixed price but have a high price floor.
2. Non-Fungible Uniqueness
NFTs are unique because they represent unique assets, such as real-world paintings and properties. This is different from cryptocurrencies like Bitcoin, which has a unique blockchain but no original valuable asset.
This is an important distinction because unique assets can command better prices due to scarcity, producing better returns than cryptocurrencies.
3. Exclusive Features
NFTs can have exclusive real-world features other than just representing a digital artwork or asset. For example, the world’s first NFT success, CryptoPunks, is a set of 100 unique digital characters designed to represent an individual blockchain address. Its creators can create “new economies” by giving anyone who owns CryptoPunks access to VIP-like services because they own a limited-edition digital asset, such as events, products, and others.
The asset creators can also partner with NFT marketplaces, such as OpenSea, by giving CryptoPunk OpenSea account owners access to CryptoPunk creator Larva Labs’ new NFTs on sale or auction.
4. Increases in Value Over Time
NFTs increase in value over time because they are scarce. There is a fixed supply of NFTs to be found in the game, and the number of NFTs in circulation will continue to diminish as more and more users purchase, trade, and sell NFTs. This causes the remaining NFTs to become scarce and as a result, they increase in value.
How to Buy NFT Singapore
You can buy NFTs easily in Singapore because you have access to the same tools, software, and networks available to worldwide buyers and investors in NFT and cryptocurrency. Read on to learn how to buy your first NFT from your favorite digital artists.
1. Choose an NFT Marketplace
OpenSea.io is one of the world’s biggest NFT marketplaces right now hosting the most popular works of art from various artists worldwide. As with most NFTs at present, Ethereum blockchain technology hosts the artworks, which the following marketplaces host:
- Foundation
- Mintable
- Rarible
- Nifty Gateway
- SuperRare
Take note that each marketplace hosts various artworks that vary in quality. For example, SuperRare focuses on high-quality, strictly-curated artworks as an art gallery would, while OpenSea hosts various artists regardless of quality to become the widest NFT selling marketplace available.
2. Create Your Blockchain Wallet
It’s easy to open your first blockchain wallet if you haven’t yet. Here are the steps you’ll want to follow:
- Prepare your SingPass details and personal identification details. Crypto exchanges in Singapore, such as Coinhako, use SingPass to verify your identity and account.
- Xfers accounts are crucial to help you withdraw your cash to your bank for some platforms.
3. Purchase Ethereum
Buy Ethereum (ETH) from your crypto marketplace, then use a MetaMask wallet (most likely made available by your exchange) and copy your crypto exchange wallet’s address to connect it with the ETH NFT wallet.
4. Connect With Your NFT Marketplace
Find an NFT marketplace using the crypto exchange’s available options. Most of them integrate with popular galleries seamlessly, allowing you to make purchases smoothly and with zero hiccups along the way.
5. Buy The NFT You Want
Make your purchase using ETH, check out your new NFT from your MetaMask wallet. Read its serial number and check out its specialized buyer-only content if you bought a limited-edition minted NFT.
What Are The Most Popular NFTs Today?
Here are some of the most popular NFTs you’ll want to buy today because they may most likely increase in value in the future.
1. Bored Ape
If you like Ape art that’s randomly generated by artificial intelligence and sold as limited edition items, you’ll surely love Bored Ape NFTs. So far, they’ve generated more than USD $1 billion in sales, with many celebrities and public personalities purchasing these NFTs.
2. CryptoPunks
One of the first NFTs to appear and sell so highly in the market, CryptoPunks was made by an artist named Beeple. The entire collection has only 10,000 unique CryptoPunk tokens, with each one fetching for at least USD $350,000 – USD $1million each. This NFT left a mark in the world, making the public and media aware of NFT’s existence and their potential for profit.
3. Axie Infinity
Axie Infinity is a game that allows players to collect six types of digital creatures known as Axies. The game has a currency called Axies Tokens (AXS), which are used to buy new Axies, or they can be used to buy items for their Axies at the auction house, such as Smooth Love Potions (SLP), which are essential for growing new Axies for battle.
There are different types of Axies, with some containing more rare and powerful attributes. Each one of them is a work of art and a functioning game entity that can affect its economy. Axies can be leveled up and evolved and put up for sale at the auction house.
4. Decentraland
Decentraland is a virtual world powered by the Ethereum blockchain. Users can create, experience, and monetize content and applications. Land ownership and in-world objects can be bought and sold using the Ethereum blockchain and the ERC-721 non-fungible token.
Decentraland has a lot of qualities that make it a leader in providing an environment for NFTs. First, Decentraland’s programming language, LUA, can script interactions between smart objects. LUA is one of the most flexible and user-friendly programming languages in use today.
5. Cool Cats
If you love cartoon cats with adorable aesthetics, clothes, and identities, then Cool Cats is surely the best NFT you’ll want to dive right into. Today, each one of them has a starting value of USD $33,000, meaning they’ll most likely increase in value in the coming years.
Legal Aspects of NFTs in Singapore That You Should Know
Here are a few things you’ll need to know about NFTs and cryptocurrency use in Singapore today.
1. The Payment Services Act of January 2020
The Payment Services Act of January 2020 is a law in Singapore that gives the Monetary Authority of Singapore the power to regulate payment institutions, digital currency exchanges, and remittance operators. The Act took effect on January 1, 2020.
The Act defines digital currency as a “digital representation of value that can be digitally traded or transferred, and acts as a medium of exchange, a unit of account, or a store of value”. Although the use of fiat currency remains unrestricted, the Act is designed to put in place certain restrictions on its use for payments and purchases by businesses and citizens with the aim to combat money laundering.
2. Have Yet To Be Used as Payments for Services
Singaporeans don’t need to worry about NFTs getting flagged as digital payment tokens because they have yet to be used as payment methods, such as Ethereum or Bitcoin. The Payment Services Act of January 2020 includes NFTs in the “limited purpose digital payment tokens” category, although this might change if NFTs become a standardized payment form online.
FAQs About NFT
1. What Makes NFTs Valuable?
NFTs are valuable because there is a finite supply and because they cannot be duplicated. While saving the image is possible, the serial code and licenses in NFT’s Ethereum host cannot verify the duplicated image’s legitimacy.
2. What’s The Relationship Between NFTs and Cryptocurrencies?
NFTs are similar to cryptocurrencies in terms of use cases. You can trade NFTs as you can trade cryptocurrencies. However, cryptocurrencies are listed in exchanges while NFTs are traded in a fashion similar to gallery artworks. However, both increase in value based on the idea of scarcity. Most NFTs host their respective media and artworks on the Ethereum blockchain, too.
3. Can I Make My Own NFT?
To make your own NFTs, you will need to create a smart contract that holds the token’s data. The code for this will be up to you. You will also need to create a contract that can mint new tokens. This contract should have a function to transfer ownership of the minted token to the desired recipient.
Then, you’ll need to open an account in a marketplace as a creator. You can follow the steps above to create a blockchain wallet and digital market account, but instead of buying, you’ll be uploading your own NFTs in marketplaces.
4. Are NFTs Similar to Stocks?
Non-fungible tokens represent ownership in an asset. They can represent ownership of virtual objects, like artwork. If a person owns a non-fungible token representing ownership in an artwork, they own it. This type of ownership is not transferable to anyone else.
Tokens represent shares in a company. A share entitles the holder to ownership of the company. The holder of a share can sell it on an exchange or privately to another person, and the new owner may then vote on corporate decisions and receive profits from the corporation, depending on what type of share is held. Shares are fungible because one share is interchangeable with another.
While they might differ in execution, NFTs are virtually similar to company shares, but it is hosted in a different exchange.
Our Final Thoughts
It’s easy to purchase NFTs in Singapore. You can easily join an exchange and NFT marketplace to purchase artworks from your favorite NFT artists using these instructions
- NFTs have the potential to grow massively over time, as much as USD $1 million
- NFTs give you exclusive digital ownership over an artwork or a digital asset. The smart contract and serial in most NFTs verify your ownership.
- You will need two wallets to purchase your first NFT from a marketplace.
- Singapore law does not consider NFTs as full-on digital payment tokens, which means ownership is allowed.
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