The year 2021 marks a new chapter for applying blockchain technology mainstream adoption. NFTs have become quite popular, especially after the digital artist Beeple sold his NFT art collection for $69 million. This development created a new benchmark for NFTs.
NFTs (Non-fungible tokens) are digital collectible assets valued in the form of cryptocurrency and, in most cases, represent culture or art. NFTs enjoy the benefit of value just like any other form of art. Many artists, musicians, and creators have started creating and trading in NFTs.
NFTs are digital tokens that are considered a variant of cryptocurrency. However, it is pretty unique since it does not allow like-for-like exchanges. If you exchange one NFT with another, you will have completely different digital assets in your possession. Know more about NFTs here.
How Do NFTs Work?
A non-fungible token (NFT) is a digital representation of a specific asset on a blockchain with a distributed public ledger and has documentation of all its transactions. Blockchain is mainly used in the finance domain.
Ethereum (a cryptocurrency) is the most popular blockchain platform that holds NFTs. The process of creating an NFT is known as minting, and it involves representing tangible items in digital forms. These items include:
- Designer Sneakers
- Sports highlights
- Virtual avatars
- Trading cards
- Video Game skins
Simply put, NFTs are physical collectors’ items that are available in the crypto space. For example, if you want to buy a painting, you will obtain its exclusive ownership rights in a digital file (NFT). NFTs have only one owner at a time.
The unique data on NFTs makes it very easy to verify the ownership and transfer of the token across owners. Owner or Creators of an NFT can also store specific information in it. For example, an artist can sign their artwork by including a signature in the metadata of an NFT to show assurance of integrity in ownership data.
How to Buy at an NFT Marketplace
Most NFTs are bought with ether (ETH), a cryptocurrency of the Ethereum network that can easily be converted to U.S. dollars on crypto exchanges such as Kraken, Coinbase, and Gemini.
Unlike most crypto, such as Bitcoin, which is used as a payment network and cryptocurrency, Ethereum and Solana let their users build apps to store personal data and set their own rules for financial transactions. These include smart contracts that govern NFT sales and ownership.
To purchase NFTs, you have to establish a digital wallet to store your cryptocurrency. Platforms such as Binance Metamast and coinbase can connect you with marketplaces where you can buy NTFs.
In most cases, NFTs are sold through an auction system where you will need to bid for the NFT. However, some sites offer the option where you can buy an NFT for a set price.
Where to Buy NFTs
NFTs offer a new market for artists to sell their work and create a new automated way to recoup a percentage of sales through royalty agreements. Most investors see NFTs support digital artists while bypassing the brokers financially.
The NFT market is growing quite fast. In August 2021, Market Watch reported that OpenSea, an online NFT marketplace, saw $3.4 billion in the transaction of Ethereum. Venture capitalists like Mark Cuban, CEO Marc Benioff venturing into the field leads many to believe that the new creative economy is here to stay.
However, there have been multiple reports of theft and fraud. Commissions and fees also vary across all platforms, and the electricity needed to run the Ethereum network is a source of concern because of carbon emissions.
If you are looking to enter the NFT world, you should understand that it is essential to assess different marketplaces to know which works best for you. If you are wondering where to start, here is a look at the other NFT marketplaces ideal for buying, selling, and trading NFTs.
Top 10 NFT Marketplaces
- Category: Digital art projects
- Has tile windows similar to an Instagram profile that showcases the arts, sales prices, list prices, and timed auctions.
- A well-trafficked site and great for a curated selection of brands and artists, with the top seller being Time magazine with a cover going for $300,000.
- Has an active social feed with a calendar of upcoming exhibitions and high-end editorial pages with artist profiles and statements that give the site an online magazine.
SuperRare is a peer-to-peer marketplace where users buy and sell single edition digital artworks. Transactions are made through Ether, a cryptocurrency from the Ethereum network.
- Category: Digital art
- Foundation showcases its creator’s work in an arranged grid of cards with trending auctions at the top of the pages followed by featured artists.
- The works are listed with a reserve price where buyers can place bids within 24 hours.
- Foundation offers15 minute extension if the bids are placed during the last 15 minutes.
Founded in February 2021, the NFT platform has hosted the viral NFT sale of the internet meme Nyan Cat, work by creators such as Nadya Tolokonnikova, Pussy Riot’s, Aphex Twin, and Edward Snowden. Users must set up a MetaMask wallet with ether before creating a profile, purchasing artwork, or minting an NFT.
- Categories include photography, digital art, games, videos, domain names, and templates
- Billionaire investor Mark Cuban backs mintable.
- It is a two-sided NFT marketplace that resembles eBay.
- Artists and creators can mint free “gasless” NFTs, traditional transaction-based items, and short-run printable series.
Built on Zilliqa and Ethereum blockchains and integrated with MetaMask where you can set up your crypto wallet. After loading your wallet and creating a profile, you can bid on auctions or purchase listed items where the winner is notified by email.
- Categories include music, digital art, domain names, games, virtual worlds, digital collectibles, and sports.
- Founded in 2017 by Devin Finzer and Alex Atallah, OpenSea is the first website to trade in NFTs.
- As of this writing, OpenSea has more than 300,000 users with more than 34 million NTFs and more than $4 billion in trade volume.
OpenSea filters by price and sales status, and you can find things such as virtual real estate to sound loops of the Weekend. It features a stats tab that looks like a stock ticker and ranks sellers by volume, number of assets sold, and average sale price.
You have to load your wallet with ether, Dai (DAI), USD Coin (USDC), and more than 150 other payment tokens when you want to buy. You can bid on NFTs or buy fixed-price NFTs directly from sellers, and the offer record will be stored on your user’s profile.
5. NBA Top Shot
- Category: Sports collectibles.
- You can acquire limited edition sets from $9 to $230, feature moments captured on video highlights, box scores, and player stats.
- The collectors can display their curated collection from their teams and trade asserts that have been secured on the company’s blockchain.
NBA Top Shot marketplace launched in 2020 as a beta by DapperLabs using the flow blockchain. The platform lets fans trade and collects digital moments from the NBA games. NBA Top Shot had more than one million users as of May 2021, with more than 200,000 users logging in daily, as reported by CoinDesk.
6. Axie Infinity
- Category: Video games
- Sky Mavis, a Vietnamese startup, designed axie Infinity.
- It is a pokemon inspired video game where the players can battle other players, collect cartoon pets and build farming kingdoms.
It is reported to have an average of 23 million players every month. The characters and land plots in the video game are encrypted as NFTs. Gamers and collectors can buy them on an online marketplace where the animals cost hundreds of dollars, and some virtual plots of land cost more than $20,000.
- Category: Sports collectibles
- The platform has over 180 licensed clubs, among the Major League Soccer.
- All transactions on Sorare are done in Ethereum.
- Users can participate in the fantasy league by buying low-cost digital players exclusive NFT collectibles to compete against each other by scoring multipliers.
Sorare is a crypto-based soccer league where you can collect player cards as NFTs and use them in online competitions later. The platform raised $680 million in series B funding, as reported by Tech Crunch. Sorare is valued at $4.3 billion.
- Category: Metaverse, Video games.
- You can link your digital wallets to sell and buy assets from blockchain games, including Ethermon, Sandbox, and Vulcan.
- The marketplace allows payment in U.S. dollars through PayPal.
Venly is a platform with more than 200,000 games. It allows users to create, buy and sell game characters, crypto-collectibles and weapons without getting cryptocurrency first. Venly partnered with Polygon, a development framework for connecting Ethereum-compatible networks and crypto exchanges such as Binance smart chain.
9. Nifty Gateway
- Category: Digital artwork.
- Sales are structured around “Drops,” where collections are made available for limited times, in most cases three weeks-increments.
- When artwork sells out or a drop ends, nifties can be sold through the site’s peer-to-peer marketplace. Nifty purchases can also be made with fiat currency.
- Nifty Gateway has featured master art from BD White, Beeple, Forbes, Cam Hicks, and Playboy.
Nifty Gateway works with artists and brands to create Nifties (a branded time for NFTs). It is a centralized marketplace for digital art. The platform operates at high volume and features a discovery page, a log of statewide activity, and detailed stats showing sales and appreciation figures.
- Categories: Digital art, music, photography, metaverse, games, memes.
- The platform has a similar layout as Spotify, with scrollable stacks of columns that feature top sellers. Live auctions and hot collections.
- Rarible is now a decentralized autonomous organization where it will be governed by the Ethereum blockchain rules that allow public and permissionless use.
- Rarible uses “Rari,” a governance token that allows the most active sellers and buyers to vote on any platform upgrade and participate in moderation decisions.
Rarible users mint, buy and sell collectibles in digital forms ranging from GIFs to animated videos that commemorate sports milestones like the Floyd Mayweather Jr.s 50-0 record. Rarible has boomed on Ethereum and has made its reputation by employing the one key technique from DeFi boom.
Other Things You Might Want to Know
1. What Is An NFT?
NFTs are collectible digital assets that hold value in the form of cryptocurrency. An NFT is unique and cannot be exchanged for another NFT like other forms of cryptocurrency.
2. Can You Cash Out An NFT?
You can easily make money from NFTs by carefully buying and selling them further.
3. Which is the Best Marketplace for NFTs?
OpenSea has the most NFT sales and most users and is the largest marketplace in terms of sales value. Axie Marketplace is the best online shop for video games.
4. What is an NFT Marketplace?
An NFT marketplace is essential in bridging the gap between sellers and buyers. Most marketplaces offer additional tools where you can create NFTs easily.
NFT marketplaces allow artists and digital creators to put their work up for sale. Buyers browse through the marketplace for NFTs and buy the items of their choice through bidding. Any NFT enthusiast has to go through the NFT art marketplaces to ensure profitable deals on collectibles, artwork among other digital assets.
5. How Long Do NFTs Take to Transfer?
The cost of transferring a single NFT is between $50 to $15, which depends on the current price of gas and demand on the blockchain. A slow transaction is much cheaper and may take more than 15 minutes to complete, while a fast transaction is more expensive.
6. Is an NFT a Good Investment?
Some people create, collect and trade NFTs for a million dollars. Some people also hope to profit from them in the future. There is not enough research on NFTs, and experts are skeptical whether NFTs are a good investment.
The NFT surge is relatively new, and vast amounts of money have been exchanged among collectors.
7. What Is an NFT Wallet?
Contrary to what you may think, you do not store NFTs or cryptocurrency in the wallets. Instead, an NFT asset provides access to the assets held on the blockchain. It does this by providing a private key to the address, which allows the wallet owner to authorize transactions.
The wallet will take care of all the technical bits and provide an interface for buying, selling, and trading NFTs or crypto. It also provides increased security with two-factor authentication and provides a convenient way to track your assets across many devices.
8. What Factors Should I Look Out for When Choosing an NFT Wallet?
Here are some of the essential features to look out for:
Some NFTs are pretty valuable, and you need something as secure as possible
An NFT wallet should be compatible with the NFT marketplace you are trading on. If an NFT wallet is not supported, you will not be able to use so it would be very useless.
An NFT wallet should have an easy-to-understand user interface. An excellent interface will make the buying and selling process seamless for you.
Ensure that you can use your NFT wallet on both your mobile devices and desktop.
Most NFTs are from the Ethereum blockchain and other few networks. You want a wallet compatible with many blockchain networks so that you can access as many NFTs as you wish.
9. What are Some of the Best NFT Wallets Available?
- Trust wallet
- Coinbase wallet
10. How Do You Know Your NFT Is Authentic?
Every NFT’s ownership is recorded on the blockchain, which acts as a digital pink slip.
11. Why Would I Want to Own an NFT?
The main reason why people buy NFTs is for emotional value. Most digital tokens are not things you need, and you want them.
The other reason is that you think that the NFT is valuable and will increase in value so you can make money off it in the future.
Choosing the best NFT marketplace can be a difficult task. Every marketplace mentioned above has different requirements and is designed for different target audiences. Established and new creators have different preferences for converting their creations into NFTs. If you have a clear idea of what you need, you can choose the NFT marketplace of your choice.
- NTFs are digital assets that hold value inform of cryptocurrency
- It would be best if you had a digital wallet to store NFTs and Cryptocurrency to purchase items on the marketplaces
- Most NFT marketplaces use Ethereum as their preferred currency of exchange
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