Looking at the terms like blockchain, cryptocurrencies, and NFTs everywhere makes people wonder what is happening here? After all, they are coming as a complete surprise to people unfamiliar with the crypto world. The headlines in the news are like celebrities getting millions of dollars in exchange for their NFTs or a digital creator selling their art at a price of a house. Even the Twitter founder has put his first tweet for sales in the NFT marketplace.
If you are also confused about NFTs and the best NFT marketplaces and how they work, keep reading to get the essential information.
Learning definition of NFTs
NFT stands for non-fungible tokens that are unique digital assets. NFT users can easily buy and sell them using crypto money. By non-fungible, we mean those exchangeable items with similar fellow items. For example, we can exchange 1 rupee for another one rupees coin, so these coins are fungible. Nevertheless, in the case of non-fungible, two similar items contain unique information within them hence cannot be exchanged.
Moreover, NFTs act as digital certificates to prove ownership over digital collectables. This function is the prime application of NFT. However, the NFT owner will not get exclusive copyrights of the NFT asset. The rights will always be accessible for only the original NFT creator.
Then what’s in it for the buyer? Well, to put it in simple words, take an example of a painting of the Mona Lisa. So if you buy a Mona Lisa painting as NFT, you will be the sole owner of it, and you can do whatever you want to do with it. You can either sell it to a new buyer in a higher amount or put it in your gallery of collectables.
Some of the common cryptocurrencies that users use to buy NFT are Bitcoin and Ether.
Workings of NFT
NFT tokenizes the artworks or other items by embedding a digital certificate of ownership.
All the information of NFT transactions is stored over a distributed ledger technology known as the blockchain.
No one can change the information once it gets added to the ledger because thousands of network members have copies of it.
Additionally, NFT can also use smart contracts that can be easily programmed. Smart contracts give NFT creators some percentage of sales every time someone buys their NFT token.
Understanding NFT marketplaces
NFT marketplaces are the platform that allows users of digital collectors to trade their own NFT tokens. Apart from trading, users can also put their NFT collections on display for others to see. It also allows users to create their own NFT art.
If you wish to explore and use the NFT market places then you will require the following elements:
● A digital or crypto wallet is compatible with the blockchain cloud platform that supports NFT transactions. For example, if you choose Ethereum for transactions, then the MetaMask wallet would be most compatible for the purpose.
● Further, you will need some amount of cryptocurrencies to fund your transactions.
● You will need a user profile on the NFT marketplace of your choice, such as OpenSea, Rerible etc.
NFT Marketplace: Opensea
Open sea is currently one of the vast and leading NFT marketplaces. With some of the top creators such as Bored Ape Yacht Club, Opensea is currently the largest Marketplace for NFTs right now. Along with art, users can sell anything that they can claim of their ownership. From selfies to domain names, Opensea has everything’s that one can think about. Moreover, Opensea facilites a very simple process for users to buy or list their own items on its Marketplace.
What do NFTs bring to the table?
We are very well aware that anything that floats on the internet already has thousands of duplicates and permissionless shares. However, this practice is very harmful to digital artists and artists in general, especially musicians. The leak of pirated content causes billions of dollars of losses to the entertainment industry.
Hence by using programmable smart contracts with NFT, artists will get their fair royalties. Every time someone shares or sells their art, automatically, a predefined sales percentage will transfer to the respective artists’ accounts. In January 2022, the 30 days global sale of NFTs roughly totaled in 150 million U.S. dollars. Although, the figure has been somewhat reduced from the past, but the below chart shows the craze among people for NFTs:
What does the future holds for NFT Marketplace?
Non-fungible tokens are still in their evolving stage. Despite being new, they have been already making their place in the space of different industries. Some of them are the music industry, art industry, gaming industry, digital collectibles, physical sculptures, and so on.
As per experts, future uses of NFT are all set to spread to our everyday activities. Eventually, it will boost the adoption of NFT marketplaces. In fact, NFT marketplaces like OpenSea just hit the market cap value of 1.5 billion USD this year. As per estimates, more users are getting attracted to NFT trading. Hence, we can say that NFTs have a bright future and are going to stay for a longer time.
Also, buyers will know they are investing in authentic art pieces through the information embedded with NFT. Apart from the artists, many unique items are also getting sold for a huge price tag. Twitter founder and former CEO, Jack Dorsey, sold his first tweet for $2.9 million through NFT Marketplace. The fund raised by sale of first tweet of Jack Dorsey went for charity involving people impacted with ongoing Coronavirus. It opens up a new window for influential people to sale the items that has no value otherwise for welfare.
NFT Marketplaces are expanding with many big tech players are entering into the arena. With Instagram announcement of launching its NFT marketplace and integration with Instagram app, this digital marketplace is reaching to the normal people. Additionally, it helps connecting more people with this new world of digital art.
Experts say that NFTs have the full potential to become a virtual backbone for the global economy. NFT offers scalable features to multiple industries, which could be the primary driver for its widespread adoption. However, a considerable population also thinks that it is just a bubble that will burst soon. Nevertheless, estimates by experts say otherwise. Hence we should wait and watch whose prediction will turn into reality.