What is an NFT? – Flipster Blog

NFT, also known as Non-Fungible Token, are examples of digital assets that reflect actual objects such as artworks, soundtracks, films, as well as in-game objects. This implies that there’s a distinctive and non-interchangeable data record concealed within these eccentric art pieces, which is maintained on a digital ledger with the use of blockchain technology to verify proof of ownership. To ensure the uniqueness and exclusivity of every NFT and establish who it belongs to, the same or comparable algorithm used for cryptocurrencies is employed.

What are NFTs Used for?

Some individuals collect NFTs just for the fun of it, while others purchase NFTs as a form of investment. NFTs have the potential to rise in value over the years and it is certainly viable to make huge profits by selling NFTs. For instance, the Bored Ape Yacht Club NFTs were released in April of 2021 at a cost of $190, around 0.08 Ethereum at that point in time. Yet, during the time this article is written, you will need to have at least more than a million to acquire a Bored Ape Yacht Club NFT. On top of that, there are also those who utilise NFT to make a living. It is possible to build a career and earn an income in the NFT space as the NFT industry is full of opportunities and enables individuals from various backgrounds to thrive together.

How to Create and Sell an NFT?

1. Decide on the Category of NFT:
There are many alternatives when it comes to whatever form of NFT users would like to make in terms of artwork. Some possible options include images, memes, music, and digital products. You may also make an NFT on real-world objects, such as pricey collector figurines or even game trading cards. 

2. Select an NFT Marketplace:
You can choose a marketplace based on the sign-up process, commission rates, security, as well as wallet compatibility. For instance, OpenSea is the Ethereum blockchain’s biggest and fastest-growing NFT marketplace. It houses NFTs ranging from artwork to merchandise, digital landscapes, and web addresses. It is also a simple platform to use. However, one drawback is their high gas fees. 

3. Create a Wallet:
Although there are several different types of cryptocurrency wallets (such as Metamask), they all perform the same function, with varying degrees of simplicity and confidentiality. These cryptocurrency wallets are accessible as a Chrome extension or as a mobile application on either App Store or Play Store. Once you are done setting up your account, send Ethereum or USDC from your Cryptocurrency exchanges to your cryptocurrency wallet address. 

4. Link your Wallet:
Head to your NFT marketplace. Select your profile and connect your cryptocurrency wallet to your account. 

2. Upload your File:
Go to the ‘Create’ page on your NFT marketplace website. Simply insert the document or file you wish to convert into NFT. You can then proceed to name your NFT and include some descriptions about it. The accepted file size depends on the NFT marketplace you are using. For instance, OpenSea allows you to upload a file with a maximum size of up to 100MB, while other marketplaces such as Rarible only allow you to upload a file that is sized at 30MB or below.  

3. Decide on the Price of your NFT:
Once you have filled in all the necessary details, the last step you have to perform before listing your NFT is to decide on the selling price (usually in terms of Ethereum) of your NFT. After deciding on your selling price, you can choose to either put your NFT up for auction or sell your NFT to the highest bidder. Contrastingly, you can also sell it at a fixed price to make things simpler for yourself. 

4. List your NFT:
After uploading, you can finally list your NFT. To do so, most NFT marketplace will require you to pay a one-time gas fee. Although most marketplaces also adopt different commission structures (NFT marketplaces will take a certain amount of commission from you upon successful transactions), paying the one-time gas fee is usually the first step to listing your NFT on the platforms. 

How to Buy an NFT?

To make NFT purchases, you will also need to select an NFT marketplace, create a wallet, and link your wallet (basically they are steps 2-4 mentioned above). As for the subsequent steps, they will be explored further below:

1. Decide on the NFT:
After linking your wallet, the next thing you need to do is to either go to the homepage of your NFT marketplace to check out the trending NFTs or to use the search bar on top of the homepage to look for the NFTs you already have in mind. 

2. Make your Offer:
Once you have decided on the NFT you would like to buy, you can go ahead and make the seller an offer. Create a bid and put forth a price that you feel is reasonable. If the NFT is a competitive and popular one, you might need to offer a higher price to be able to obtain the NFT (to ‘beat’ the current highest bidder). You can even negotiate with the seller for your desired buying price. On the other hand, if the seller of the NFT has already fixed the price of the NFT, then you can simply purchase the NFT at the price that the seller has already set. 

3. Go to your NFT ‘Collections’:
Once the transaction is successful, you can head to your NFT collection page. Check out your latest NFT and take a brief moment to appreciate its beauty. 

Popular NFT Marketplaces

Currently, the most popular and common NFT marketplaces out there include:

OpenSea

Rarible

Axie Marketplace

Nifty Gatway

Crypto.com

Should you Buy NFTs?

Even though creating and owning an NFT is getting increasingly trendy these days, there are unsurprisingly still naysayers out there who are cynical about the functionality of NFT as well as its negative impacts on the environment. Similar to cryptocurrencies, NFTs necessitate a network of energy-consuming systems to run their blockchains in order to function properly. This, however, poses a huge concern to the environment. Some also believe that the concept of NFT is simply absurd and weird. It might be difficult for people who are unfamiliar with NFTto accept the idea of it. 

An NFT functions almost the same way as a physical item – it can be created, bought, and sold. Although there are drawbacks and many controversies about NFTs, it does not mean that NFTs are useless. There are always two sides to a coin, and NFT has undoubtedly revolutionized the concept of both ownership and artwork. A multitude of people still sees it as a good venue for investment, a source of empowerment and hope, as well as a potential income revenue for aspiring artists out there.

Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with significant risk of loss due to its high price volatility, and is not suitable for all investors.