The next big evolution in fine art collecting is here: NFTs. You may be wondering, what exactly is an NFT? NFT stands for non-fungible token, meaning it is completely unique and cannot be replaced with anything else.
NFTs are essentially one-of-a-kind pieces of code that store unique data, differentiating it from any other token on the blockchain. NFTs are a type of cryptocurrency that can be stored online, on a USB, in a digital wallet, or on any digital storage device of your choice.
NFTs are digitally produced and can be displayed in many different ways. NFTs are unable to be copied, which gives you exclusive ownership of the original work. Owning an NFT not only gives you the sole right to post the image anywhere, it is viewed as a status symbol. You hold bragging rights of owning the art, with a blockchain entry to prove it. For collectors, NFTs are like any other asset: you purchase it and watch the value increase for the opportunity to sell it for a profit. There are several marketplaces to purchase, sell, and view many different NFTs.
We’ve gathered the answers to your burning questions about NFTs to prepare you to get involved in this exciting new trade. Now’s the time to get involved in the digital art revolution!
What is an NFT?
NFT stands for Non-Fungible Token. To quickly break it down, a fungible token like the US dollar is not unique and each has the same perceived equal value. A non-fungible token like NFT Art, on the other hand, is considered unique and does not have equivalent value.
The uniqueness is achieved by each piece of art being minted/created on their own unique non-fungible token, NFT, which essentially impregnating a cryptocoin’s cryptography code with the digital artwork, the artist’s digital signature, royalty agreement and any other information the artist chooses to disclose.
NFTs can represent many different forms of unique digital or digitized items such as art, music, games, videos, tweets and more. Artists, musicians, influencers and more are flocking to the NFT scene.
What makes NFTs so cool?
What makes NFTs so bleeding edge is that they are secured by blockchain technology. Currently, the vast majority of NFTs are being minted on variations of the ERC/Ethereum Blockchain. The same properties and decentralized ledgers that have helped to make cryptocurrency blockchain so valuable are also key to what gives NFTs their value.
One of the biggest issues with traditional art markets has always been counterfeiting. The bustling baseball card market of the early 90’s was also brought to its knees by the impact of counterfeiters. NFT’s crypto code is built to thwart counterfeiters. Now, with the help of Blockchain, the art and collectible market can be protected and prosper.
Another cool thing about NFTs is the artist’s ability to encode a royalty into each NFT they create. The royalty, in most cases, can be no more than 10%. The NFT creator/artist receives royalties from every sale of their NFT. For the first time in history, artists will be able to get royalties for the life of their work. Unlike traditional artists who only make profit from their first sale, a digital NFT artist will earn whatever royalty percentage they encoded into their NFT at the time of minting every time that NFT sells, regardless if it was sold for a profit or a loss.
Where are NFTs sold?
NFTs are sold in digital art studio and NFT marketplaces like Free-hy.com, OpenSea, Rarible, Mintable and Nifty.
How do I buy an NFT?
Depending on the NFT studio or marketplace, you can buy NFTs with cryptocurrency like Bitcoin and Ethereum. Some like marketplaces like Nifty accept Credit Cards.
Will the value of NFTs continue going up?
NFT sales in 2020 were $250m. There have been months in 2021 with NFT sales over $220m, according to NonFungible.com. This trend paints a promising picture that NFT sales will continue to skyrocket.