Non-Fungible Token (NFTs) is the next big thing in the crypto space. Understanding how NFTs work would also help you to make money in the NFT marketplace.
NFTs are unique digital token of which cannot be exchanged or swapped for another coin. It is a unit of data that’s stored on a digital leader known as a blockchain, it can be used to represent items such as photos, videos and other types of digital files.
Also, it offers blockchain created certificate of authenticity for a digital asset such as an artwork or a piece of video.
What is an NFT Art?
This is a non-fungible token in the form of art works that can be bought and sold online, frequently with cryptocurrency and generally it is encoded with same software as many crypto. They exist in the digital universe and is owned by one person who has the right to reproduce copies of that particular work.
Watch this video to learn more on how NFTs work
How NFTs Work
NFT’s exist on a blockchain that records transaction, it is created from digital objects that represent items such as videos, art and music. They are collectibles items but not physical, it can only be held digitally.
They also have ownership rights which entails only the owner having the right to its reproduction.
Their owners can sign their art work by putting signature in an NFT’s meta data that makes for easy verification of ownership and transfer of tokens between owners.
Top 3 NFT Crypto Marketplace
Once you’ve got your wallet set up and funded, there’s no shortage of NFT sites to shop. Currently, the largest NFT marketplaces are:
This peer-to-peer platform set itself as a storage of “rare digital items and collectibles. You can also search for pieces by sales volume to discover new artists.To get started, all you need to do is create an account to browse NFT collections.
Rarible is an open marketplace that gives artists and creators the privilege of buying and selling of NFTs. The tokens under this market is called RARI tokens and it is issued on the platform so as to enable holders to weigh in on features like fees and community rules.
In this particular NFT marketplace, artists must receive an invitation from fellow artists to post their art.
Although these platforms and others are host to thousands of NFT creators and collectors, you need to make your own research and findings carefully before taking the step of buying. Some artists have fallen victim to impersonators and online scanners who have listed and sold their work without their permission.
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How to Invest in NFT
To invest in NFT, you need to buy an NFT item at one price and then sell it at a higher price to another buyer. To get started, you first need to get a digital work which has high relevance and could be appealing. Before engaging in this, you need to follow the following steps to invest in NFT which are:
- Open an NFT MarketPlace
you need to create a digital wallet which will be funded with cryptocurrency, you need to add the wallet to the online market place to open your account, you can start once this is done.
- Create a wallet to Buy NFT
You need to get a wallet that can hold digital asset and it must be able to work with the NFT market place you want to invest from. This wallet will act as your personal source of making transactions from the market.
- Fund your Account
You will need to buy a cryptocurrency to participate in NFT marketplace and to make this possible, you need to fund or deposit into your account.
- Buy your NFT
After making your digital wallet active and funded, you will be ready to buy any NFT token.
NFT Tokens on Blockchain
Ethereum a popular blockchain for creating NFTs, they are built with the ERC-721 token standard. This standard outlines a set of features that each non-fungible token should possess.
Use Cases for NFTs
- Creating digital collectibles
- Managing ownership of digital items within blockchain-integrated games
- Proving an authentic art system which gives artists the ownership right.
- Setting an identity system that allows users to control their data
- Allowing equal ownership of high-value items.
NFTs are just emerging the crypto space and currently taking over. Learning how NFTs work will be a great idea because the opportunities it provide are much. If you’re looking up to make a living in the future, creating your NFTs and selling on various NFT marketplace would help you now.