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10 Things You Need to Know About NFTs

Updated: Dec 26, 2022

NFTs, or nonfungible tokens, are one of the most exciting crypto assets to enter the blockchain market. They enable developers to create unique digital collectibles.

1 What are NFTs?

An NFT is a non-interchangeable digital item that is stored across multiple computers on the public record, also known as the blockchain. The T in NFT refers to a token, which is a record logged on the blockchain— the data structure on which cryptocurrencies rely. Popular NFTs are much more than digital files, though. They come with status, community, exclusivity, and experiences. Many NFTs double as memberships or deeds to virtual land, and ownership often grants you access to benefits, including private online communities and exclusive game access.

2 What is minting?

Minting an NFT is publishing a unique digital asset, most often as a work of art, on a blockchain so that it can be bought, sold, and traded. To upload a one-of-a-kind digital file to an NFT marketplace like Opensea, you will create an account, enter a link to your associated website that offers buyers brand and marketing information about your collection, write an NFT description, and publish. It’s a simple process. The complexity comes into play when choosing the right artists and building desire and buzz around NFTs in your project or collection.

3 Should I mint my own NFTs?

The drivers for the NFT market are similar to the traditional art market—aesthetic pleasure, the thrill of the auction, and exclusivity. Some things to consider before starting an NFT project are do you have an established following? Does your brand lend itself to exclusivity or status? How large will your collection be? Who are the artists creating the digital works? Is your collection associated with unlockable content, such as a physical product or a membership? Is it part of a game? How will you build a community around your collection?

4 Why do I need a crypto-wallet to collect NFTs?

NFTs are bought and sold using cryptocurrency. Crypto wallets are like banks, but unlike banks, crypto wallets don’t come with human middlemen making decisions about your money. Instead, they simply store your private keys, keeping your crypto safe and accessible. The first step is downloading a wallet extension if you’re on a computer or an app on a mobile device. The most important thing to remember when setting up a wallet is that you need to put your recovery passphrase in a secure place. If you lose it, you lose access to all the cryptocurrency in your wallet. Millions of dollars in crypto are forever frozen because the owners lost access to their wallets.

5 Where are NFTs traded?

A few leading platforms, like OpenSea and Rarebits, allow you to buy or sell digital goods in exchange for cryptocurrencies. These decentralized NFT marketplaces sell art, domain names, game items, music, and other digital assets built on the blockchain. You can buy or sell NFTs and create NFT collections on these marketplaces. These platforms are surprisingly straightforward to navigate. You can open an account and create your first NFT in five minutes. The challenge is making your NFTs valuable and sought after, like any other art.

6 What can be converted into an NFT?

Collectible digital art, 3D avatars, virtual fashion, land in the metaverse, and VR or IRL games and experiences are some of the most popular NFTs to create, collect, or trade. NFTs can be anything as long as the asset is unique, also known as nonfungible, and has a main digital component that can be stored on the blockchain. Typically, it’s art because an NFT has to be one-of-a-kind or in a limited edition. Fungible translates as interchangeable. For example, a puffer vest from The Gap SKU# 123 is interchangeable and any other Gap puffer vest of that SKU number. Nonfunglible, on the other hand, means unique or one-of-a-kind. The Mona Lisa is not interchangeable with other paintings.

7 What can I do with my NFTs?

Just like artwork, you can do whatever you want with them! You could gift an NFT to a friend across the world, keep it as a family heirloom, or sell your NFT on an open marketplace. But unlike other goods, they’re trackable across the public record, can’t be counterfeited (at least, we believe they can’t be forged), and are armed with the programmability of digital goods.

8 How fast is the NFT market growing?

The market for these unique digital items is growing quickly. The NFT market was valued at more than $2 billion in 2018, and the total number of NFTs in circulation has surpassed 500 million items. A market report published by Verified Market Research provides a lofty prediction for the future of the nonfungible token market, projecting its value to swell to $230 billion by 2030.

9 Are NFTs a risky investment?

NFTs are risky investments for many reasons. First, if the company behind the token falls apart, you may take losses. However, because the blockchain is decentralized, your asset will still reside in records on servers worldwide if the backing company goes under. Therefore, its value can take on a life of its own, similar to physical artwork. The NFT market is also speculative and very volatile. NFTs are nothing like blue chip stocks. Instead, they are highly subjective, like antiques or collectibles.

10 Who are the hottest NFT artists?

One of the main benefits of Nonfungible Tokens is that it creates an ecosystem where anyone can create, own, and manage their digital items. It also helps artists get discovered because they can upload their work directly to the blockchain and share it with the world. Investing in NFTs supports painters, sculptors, musicians, illustrators, and designers. Here are three of the hottest NFT artists.

Gal Yosef is a renowned Israeli 3D artist who created the Crypto Bull Society. He started experimenting with 3D art when he was 12 years old and is now considered one of the most influential digital artists of our time.

Maliha Abidi is a Pakistani-American acclaimed published author and visual artist. Her latest project is Women Rise, a 10k collection of women activists, artists, scientists, coders & more rising on the blockchain.

Maxwell Step is a Canadian graphic designer and pixel artist who explores human faces through his art. He designed The Glitches, which focused on diversity and inclusion.

NFTs can be applied in many ways and are becoming increasingly popular. The use cases for an NFT range from digital art, exclusive online clubs, virtual land in gaming environments, or even limited-edition sneakers. Don’t go it alone—partner with SliiceXR to gain visibility in the metaverse.

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