Non-fungible tokens (NFTs) are gaining popularity due to their unique ability to provide a secure and transparent way of owning digital assets. NFTs are essentially digital certificates that prove ownership of a specific piece of digital content, whether it’s a piece of art, music, video or anything else.
With NFTs, digital artists can sell their creations in a way that is similar to selling physical art, as they can be sure that their work is one-of-a-kind and not easily duplicated or counterfeited.
Additionally, NFTs can also provide a way for creators to earn royalties on their work, even after it has been sold, as the smart contract that powers the NFT can include terms that dictate how future sales of the asset are handled.
This has made NFTs a popular option for artists, collectors and investors alike, as they offer a new way of owning and trading digital assets that was previously impossible.
What is an NFT?
What is the NFT meaning?
NFT (non-fungible token) is a new technology that has emerged in the last few years and is gaining traction with the ability to represent digital assets, such as artwork. An NFT is essentially a cryptographic asset that can be used to represent ownership of any digital or physical item. It works by linking a unique identifier to an item, which essentially serves as the digital “title” for it.
In addition to representing assets, these tokens can also be used for tracking and securing transactions on blockchains. NFTs are becoming widely accepted across industries including gaming, fashion, music, art, media and finance. As the technology evolves more applications are emerging which demonstrate its potential for digital collectibles and asset transfers.
Yes it’s hype. But it could change our world.
How NFT technology emerged
NFT technology emerged as a natural extension of blockchain technology, which underpins many digital currencies like Bitcoin and Ethereum. While these currencies are fungible and interchangeable with one another, it was clear that there was a need for a way to represent unique digital assets on the blockchain. Enter NFTs, which are essentially digital certificates that prove ownership of a unique piece of digital content.
The first NFTs were created in 2017, and they quickly caught the attention of the art world as a way for artists to sell their digital creations in a secure and transparent way.
Since then, NFTs have expanded into other industries, such as gaming, sports, and collectibles, and they have become increasingly popular as a way to create unique, verifiable items that can be traded or sold.
NFTs have also provided a way for creators to earn royalties on their work, even after it has been sold, as the smart contract that powers the NFT can include terms that dictate how future sales of the asset are handled. While the technology is still relatively new, it has already had a significant impact on the digital economy, and it is likely that we will see continued growth and evolution in the years to come.
How NFT works
NFTs, or non-fungible tokens, work by using blockchain technology to create a unique digital asset that can be verified and traded securely and transparently.
The process begins with the creation of the asset, which can be anything from a piece of digital art to a collectible in a video game. Once the asset is created, a digital token is minted on a blockchain network, which serves as a digital certificate of ownership. Because the token is unique and verified on the blockchain, it is impossible to create a duplicate or counterfeit version of the asset.
The token itself can then be traded or sold just like any other asset, and the blockchain ensures that ownership is clearly established and recorded. Additionally, NFTs can include smart contracts that dictate how the asset can be used or sold, including terms for royalties or resale rights.
While the technology behind NFTs may seem complex, the basic idea is simple: to provide a secure and transparent way of owning and trading unique digital assets. As the world becomes increasingly digital, NFTs are likely to continue to grow in popularity and expand into new industries and use cases.
However, it is important to consider the environmental impact of NFTs, as the blockchain technology that powers them can be energy-intensive and have a significant carbon footprint. As with any new technology, it is important to proceed with caution and carefully consider the implications and risks before investing or using NFTs in any capacity.
How to create, sell and buy NFT
How to buy NFTs
First you need to choose one of the platforms. NFT-platforms trade digital objects in cryptocurrency, sometimes in dollars. Examples of platforms: Juggerworld, Treasureland, Blockparty, Nfty Gateway, Rarible, OpenSea, NFT STARS, NFT-X and others.
The buyer receives a digital certificate with unique blockchain data and stores the object on any device: smartphones, computer memory or a flash drive. The object itself stays in the IPFS (Inter-Planetary File System), a perpetual repository. Other users will be able to download and view the object, but the private key (certificate) remains with only one user. The owner has the right to give the public key to other users when copying to confirm the authenticity of the object.
How to create and sell an NFT token
The same platforms are used to create and sell. The user needs a cryptocurrency wallet to pay the platform fee (not always the case) and the object itself. The owner uploads the content to the platform and puts a price.
NFT is created in one of the blockchain formats: ERC-721, ERC-1155, ERC-998, EIP-2309 and others that NFT platforms offer.
The author of the NFT has the right:
- Limit the number of copies.
- Receive royalties from each sale (sometimes this happens automatically).
- Not to prove copyright, which is spelled out in the blockchain.
Why NFTs are needed
It is known that blockchain technology was first used in 2010, then it was experiments based on bitcoin, which is the very first cryptocurrency in the world. In 2017, tokens began to be created on the basis of etherium. Since then, the world of cryptocurrency has changed. Users have been able to buy not only virtual money, but also other valuable digital goods. Before that, bitcoin and other cryptocurrencies were only used to buy and sell physical goods. For example, Elon Musk sold Tesla electric cars for bitcoins.
NFT tokens were created to make the concept of digital property finally make sense. Thanks to blockchain technology, virtual items gained value and the storage system became secure. The problem of confusing the original and the copy has disappeared. Now the code of the original file and the copied file are different and this information is also encrypted in a token.
Popular artists’ songs and works of famous artists are also being digitized. For example, in March 2022, the company Injective Protocol purchased Banksy’s painting “Morons (White)” for a very large sum of 7 million rubles in Russian currency. The painting was first digitized and then burned during the broadcast. Thus, the physical embodiment of the author’s work no longer remained. Now the black-and-white work will exist only in the digital space. Experts believe that this move is justified: the fact of destroying a paper copy of the picture only increases the cost of the digital version.
So, there are several possible applications for NFT-tokens.
Earnings for content authors
Typically, authors promote their content to the platforms where they publish. In return, they receive advertising and virality, but not money directly. With NFT the author has access to royalties from the use of his content.
Before NFT, you had to sign objects to keep the author’s name. The method worked poorly, the author’s name was often lost. The blockchain records the creator of the object, the current owner, and resale history.
Replacing digital documents and tickets
With NFT, ownership of real estate or a car is confirmed with a token instead of a paper document. The technology is also used to sell tickets for events. The difference with ordinary electronic tickets and documents is in the security level: NFT cannot be faked or stolen.
Interactivity of content
NFT adds interactivity to the media content and includes the user in its creation.
Example. The creators of the comedy series The Gimmicks gave away free tokens with which users vote each week for story options. Participants also get a unique NFT character from the world of the series and even become an assistant on the production team.
Buying digital objects is a lucrative investment. NFTs get expensive, digital objects resell for impressive sums, but there’s no telling which NFT will skyrocket in value. Not all NFTs are valuable: it depends on the author and the characteristics. That’s how Elon Musk put his tweet in the form of an NFT up for sale. The value of the lot at auction exceeded one million dollars.
Using NFTs in Games and Metaverses
NFTs can be used as playable characters or items in various games or Metaverses. We’ll talk more about this a little later in a separate chapter article.
What is an example of NFT?
Some NFTs are becoming world famous, not just among collectors. Such objects are sold at the famous Christie’s and Sotheby’s auctions. Sometimes NFT art seems primitive, but even simple images are worth millions of dollars. A few examples of digital objects that are worth as much as millionaires’ yachts.
An example of a very simple, but prohibitively expensive NFT. The objects in CryptoPunks collection of unique pixel avatars can only be afforded by wealthy collectors.
At an auction at Christie’s, a collection of nine rare pictures of the project sold for almost $ 17 million.
“The First Five Thousand Days.”
The artist Beeple published a new work every day for 13 years, and then combined all the images into a collage of 50,000 elements and sold it as an NFT at Christie’s. The image is called “The First Five Thousand Days” because the author decided to create a new picture every day for the rest of his life. The collage with the first days is worth $69 million.
Internet Source Code
English scientist Tim Berners-Lee created a token for the Internet source code that he invented in 1989. The value of such an NFT at a Sotheby’s auction is $5.4 million.
Campbell’s soup cans
Andy Warhol’s famous painting of Campbell’s soup cans also turned into an NFT. Untitled (Campbell’s Soup Jar) sold at Christie’s for $1.1 million.
“Transition” by Pokras Lampas
Calligraphy artist Pokras Lampas digitized and sold a photo of his work projection on the Chirkei hydroelectric power plant for $29,000.
Nyan Cat meme creator Chris Torres turned an Internet cat into a token and sold it for more than $560,000.
How do you make money with NFTs?
Is NFT worth the money? Owning a unique creative object, you can try to make money on it. Or it is enough to be an enterprising person.
NFT technologies offer new and good prospects for making money. You only need to know how to use them correctly. Experts advise to start with a single method, gradually plugging in and trying the other options.
Here are a few ways to make money from NFTs:
Creating your own token
All you need is to think up an interesting project, bring it to life, digitize it with a special platform. Then sell it, and transfer the proceeds from cryptocurrency to regular fiat currency. This scheme seems simple only at first glance. After all, to create something really interesting and exciting, something that will resonate in the hearts of many people, you have to try or be a genius.
Without talent and certain digital art skills, it will be quite difficult to compete with other token creators. After all, there are already hundreds of thousands of works on platforms that no one buys. To hook a potential buyer with something – that’s what aspiring authors should be aiming for. If a person’s work was familiar to the public outside of the NFT venues, this will greatly increase their chances of success. Style is also important: you need to be able to be different from the others, to find your own unique way of expression.
Promotion is a great way to tell about yourself to those who do not yet know such an author. It is possible to show your work and draw attention to it in any social networks, where there is an active, lively, interested audience. Any creative work, the original product of which can be digitized, is suitable for this method. Video clip, music composition, e-book, illustration, animation. To sell your own product as expensive as possible, it should exist on the marketplace only in one copy. It’s worth starting with platforms like NiftyGateway, OpenSea, SuperRare, Rarible, and Foundation.
Probably one of the easiest ways to make money on NFT. All you need to do is to constantly monitor interesting offers at nice prices, buy other people’s tokens, and then sell them to other users at a higher price. To take advantage of this method, you will first have to buy a certain amount of cryptocurrency, because NFT tokens can only be bought with virtual money.
In this business, a good judgement is important. A beginner is unlikely to cope with it. But an experienced user, who already has knowledge about tokens and an idea of digital art, can use this method as a source of additional income. It is also useful to be interested in graphic and web design to keep abreast of the latest fashions. You can train your skills on sites like Designspiration, Muzli, The perfect grid, Fubiz, Behance and Dribbble.
Free token giveaway
Often platforms and projects that have just entered the NFT market give away free tokens to their subscribers and users in order to generate interest in buyers, to promote themselves, to find sponsors. This is called an airdrop. Airdrops can be traditional or non-traditional. Non-traditional is affectionately known as a “bounty”.
Traditional airdrop involves giving away tokens between holders of a certain digital currency or tokens. That is, in order to get a free token, you must first buy some token or purchase virtual coins. Only those users who have performed certain actions to promote and recognize the project participate in the “bounty”. That is, it is a reward for the accomplishment of the plan.
You can not rely only on this method. This is a long process, you need to participate in as many giveaways as possible. Free tokens do not always increase in value a lot. However, there are cases when initially free NFT got the value of 10 thousand dollars. A typical example is the CryptoPunks avatar project. Now the price of a single image ranges from a few thousand dollars to millions.
Services for token authors (digital artists)
If you already have knowledge of NFT or a great desire to get that knowledge, you can try producing novice token writers. When you have experience in selling tokens, it is easier to do such work. Therefore, you will need to present yourself as an expert in order to increase the trust of potential clients.
Authors are unlikely to appear themselves, so you will have to look for them on your own: on cryptocurrency exchanges, on NFT-token sales platforms, in thematic forums on the web, in various groups and publishers in social networks. Before starting cooperation, it is desirable to conclude an agreement that will spell out all the terms and conditions. There is a risk that the author may get greedy and not share the profit if the token is presented on the marketplace under his name and his account.
Paid consultations on NFT
You can’t do without sufficient experience and baggage of knowledge. Training for beginners can be structured in different ways. Some people are more interested in communicating personally with future authors during individual consultations. Some people find it easier to write a mini-course with video lessons and promote it on the Internet. But in both cases you will have to invest in advertising and promotion. And in the second case, you will need the cost of video editing or quality equipment and a lot of free time to process the footage.
But there is a significant advantage of this method. This is that the expert gets the money right away. A person pays for a consultation or training course, but it does not give a hundred percent guarantee that he will be able to earn money by selling unique tokens.
Various technical services for NFT digital artists
There’s an ocean of ways to make money from NFTs.
For example, to batch upload a large number of NFTs to the OpenSea Marketplace the smartest way is to create a smart contract. Only a programmer can do that. There is even a specialized Solidity programming language for this.
Also, to promote and get a large audience of NFTs, digital artists may need to develop mobile apps or metaverses. These can be small projects for freelancers, or large ones for large companies.
And there’s no need to talk about website development services for all of this. As is the case with Internet marketing services.
NFT Marketplace is a platform (website, mobile application) where NFT tokens are “minted”, sold and bought.
Token trading platforms are now multiplying at an enormous rate. You should not go to every possible platform in order to buy your first NFT. You can use any search engine to run through the most popular marketplaces and read reviews. The list of trusted NFT marketplaces includes sites such as:
- Binance NFT;
- NBA Top Shot;
NFT in games
What does NFT mean in gaming?
In NFT games, the universe evolves with or without the player: it’s like an online game, but with stronger dynamics and radical changes within the game world. Here are just a few examples of the most interesting games that use the mechanics of non-fungible tokens.
Axie Infinity is a Ethereum-based blockchain game with fantasy characters (axics) that is a lot like the acclaimed CryptoKitties. It is used not only for entertainment purposes, but also for making money. The project has been supported by many large companies, including Binance and Samsung.
Players in Axie “do not suffer” from the imposition of donations, as all content can be obtained through gameplay. The cost of items and characters on the secondary market is determined solely by the players.
Axics are the NFT. The developers claim that despite their cute appearance, these creatures are warriors who love to fight. Particularly rare Axics can be sold on marketplaces for impressive sums of money, which attracts both players and those wishing to make money.
The “simplicity + tangible benefits” formula has attracted millions of players worldwide to the project, and the Axie Infinity (AXS) token capitalization reaches nearly $2.3 billion and is comparable to that of large international companies.
Sorare is a new platform where players collect digital cards, trade them, and participate in fantasy tournaments. Each card is a digital asset, officially licensed by a club or league.
Sorare cards can be sold on NFT marketplaces, which are protected by blockchain. The same cannot be said about dubious marketplaces for trading items from classic games: when dealing with them, the user relies solely on the honesty of the site’s developers.
Collection cards have been a favorite hobby of sports geeks for decades. It was impossible to collect digitally. Blockchain, which guarantees the uniqueness of each card, came to the rescue.
Currently, the platform is a partner of 100 clubs, including Juventus, PSG, Atletico, West Ham, Schalke and others. Given the speed of connection to the platform of new clubs, there is no doubt that soon the choice will be much wider.
Crypto Kombat – the heroes of this NFT-game are the real Influencers, entrepreneurs, developers and scientists of the cryptocurrency world. Users play as blockchain creators Satoshi Nakamoto or Vitalik Buterin or confront “crypto-heroes” by playing for the SEC (US Securities and Exchange Commission).
Unlike hacked and stolen accounts of classic games, Crypto Kombat is accessed via a cryptocurrency wallet. It is protected by a unique key and no one can steal the user’s assets and in-game items.
There are four types of cards in the game: common, epic, rare, genesis. The latter can only be picked up by the hero himself, who is represented in the game. Charlie Lee (Litecoin), Anton Bukov (1inch), Giancarlo Devasini (Tether) and Devin Fincher (Opensea) have already accepted cards, showing interest in the project. Now every player can meet the hero himself on the battlefields.
The core of the blockchain game is the internal KOMBAT token, which allows you to unlock new heroes, earn money, and influence changes in the project. The cards are freely traded on the NFT marketplace Opensea, and the largest transaction was for 8 ETH or $32,000 at the time of writing.
These projects have managed to solve some of the “pains” of the classic game industry, through the use of NFT and blockchain. Among the achievements of crypto games are:
- Multi-platform. One wallet fits all games. You just need to connect and you can play right away.
- Security. The process of generating new blocks is built so that it is almost impossible to hack.
- Fair prices determined only by players.
- No censorship. It is impossible to block access to the blockchain.
- Achievements in the game can literally be sold to other players, earning money on it.
Gaming and NFT: the near future
Blockchain for gaming is still in its infancy and beginning to develop its potential. But right now it allows developers to explore new horizons in a virtually unlimited and vast infrastructure, augment VR and AR, and create previously impossible projects.
Blockchain brings digital property rights to the gaming industry, real protection for players’ data and assets. In-game blockchain items are valued not only by players, but also by collectors and represent property in web auctions.
Many blockchains are already building infrastructure for the development of NFT and GameFi in particular. These include BSC, Solana, Tezos, and others. And the capitalization of the NFT game industry tends to be in the billions of dollars. In addition, play-to-earn mechanics will attract even more players. Such games can become a full-fledged way to earn, in addition to an interesting pastime, which cannot be said about traditional games.