NFTs

Beginner's Guide to NFTs

Last updated: June 11, 2024

Samuel Okunsolawo

Written by Samuel Okunsolawo — Samuel Okunsolawo has been writing about iGaming for more than six years, and he's rather good at it. Samuel has contributed to numerous online gaming platforms and magazines, known for his engaging writing style and smart analysis. Online casinos, sports betting, cryptocurrency casinos, and game reviews are just a few areas in which he excels. Samuel is well-respected by both readers and professionals in the field for his commitment to presenting information that is both accurate and current.

Non-Fungible Tokens (NFTs) have gained popularity in the past few years because they represent ownership rights over digital assets or real-world entities. Musicians use NFTs to sell their music and artworks directly to their fans, while artists can tokenize their works so that they get paid each time one of their artworks is bought or sold. This comprehensive beginner's guide on NFTs is intended to provide an overview of Non-Fungible Tokens by explaining their meaning, ways of purchasing them, as well as risks and potential benefits of NFT investments.

What Are NFTs?

NFTs are tokens representing the ownership of a particular digital asset like music, artwork, video files or virtual real estate. NFTs are unique because they are not interchangeable, i.e., every single token cannot be exchanged with another one, unlike bitcoin and ethereum, which are fungible cryptocurrencies.
Non-fungible tokens are based on blockchain technology, most commonly through the Ethereum network with its ERC-721 standard. Each of them is made secure and transparent due to this. Whenever any one new non-fungible token emerges by being "minted," a corresponding smart contract will be created along with it that contains metadata about the entity, such as who made it first engage in its trade events course over time as well as any other characteristics attached thereto as would be deemed necessary by their decision makers.

How to Buy NFTs

To get started with buying NFTs, you’ll have to create an online digital purse that is compatible with the Ethereum network, like MetaMask or Trust Wallet. From these wallets, you will be able to keep your cryptos as well as work with NFT markets.

Afterwards, figure out an NFT market where one can find art pieces in digital form they wish to buy. Some widely known platforms are OpenSea, Rarible, Nifty Gateway and SuperRare. Every single one of these NFT market places has its peculiarities as well as various categories of NFTs.
To purchase an NFT follow these instructions:

  • Link your digital wallet with the NFT marketplace.
  • Find out the NFTs available and pick the one you want to purchase.
  • Make sure you have adequate cryptocurrency (commonly Ethereum) in your wallet for both NFT's price and other costs like transaction fees.
  • For whichever format it is sold in, buy it outright or simply make an offer (bid) for the NFT.
  • After the transaction is done, the NFT will be transferred into your digital wallet, and you will become its new owner.

The Most Expensive NFTs Sold

Over the years, there have been numerous sales of unique digital items that attracted hundreds of millions of dollars. The following are some of the most outstanding and most expensive NFTs sold to this date:

  1. Beeple's "Everydays: The First 5000 Days" - Beeple's digital artwork piece named "Everydays: The First 500 Days" that went for $69.3 million was purchased in March 2021. The piece was done by an artist who goes by the name Mike Winkelmann (Beeple) and is the highest paid for Non-fungible token (NFT) ever.
  2. CryptoPunk #7804 - A blue-skinned alien smoking a pipe and wearing a cap was illustrated in this rare CryptoPunk NFT, which fetched 4,850 ETH, equivalent to 16.42 million US dollars.
  3. Crossroads by Beeple - Beeple’s Crossroads is another of his creations sold for $6.6 million- an NFT ​​video artwork he released in February 2021.
  4. CryptoPunk #3100 - Another CryptoPunk was sold in March 2021 for $7.67 million. It is a blue-skinned alien with a white-and-blue headband; this time it happens to be CryptoPunk #3100.
  5. The First Tweet by Jack Dorsey - In March 2021, Jack Dorsey, the CEO of Twitter managed to sell his initial tweet for a whopping $2.9 million.

Since there hasn’t been any big news for a while, people may ask “are nfts dead?” Well, they aren’t. Everything in the digital world has proven to be seasonal. No one can tell when the next big sell will happen, and what buzz might trigger it. So, the answer to the question “are nfts still a thing?” is yes.

Benefits and Risks of NFTs

The benefits of investing in NFTs include the following:

  1. Provenance and authenticity: Non-fungible tokens (NFTs) allow digital asset ownership and credibility verification through security and transparency.
  2. New revenue streams for creators: The work of artist, musicians, and or content creators can be directly monetized by NFTs, bypassing traditional intermediaries.
  3. Collectability and investment potential: Similar to traditional art and collectibles, non-fungible tokens (NFTs) have the ability to grow in value; hence, offering investors an avenue for future returns on their investment.

However, there are also risks to consider:

  1. Market volatility: NFT prices can quickly go up or down within a short time specifically due to public excitement that comes from no where, speculative purchases or major occurrences within this specific sector.
  2. Intellectual property concerns: Because the NFT sector is not yet mature, there are ongoing conversations happening concerning intellectual property and the possible chances of a scam or usage without permission.
  3. Environmental impact of blockchain technology: There has been concern about the ecological effect of Ethereum blockchain technology. This is due to the fact that minting and trading of NFTs use so much energy.

Conclusion

It is important to remember that NFT has provided a new path for digital creators, collectibles owners and the investors. It is essential that you research before embarking on the NFT journey because of the high risks associated with it. Also, only use money you do not mind losing. Make sure you understand what’s happening around your NFTs; this is by looking for the latest market trends while storing them safely in a compatible digital wallet.

The NFT world is changing all the time under our very eyes as it keeps churning out new projects, markets and applications routinely. Be on top of current developments while still exercising caution in order to traverse through this thrillingly new world of virtual possessions in a manner that leaves you confident.