No matter whether you are looking to invest in your first NFT or instead you want to create an NFT of your own, you first have to understand the fundamentals.
One of the best places to start is with the lingo. You can check out our NFT Slang Dictionary for definitions of everything related to NFTs.
What is an NFT?
Picture yourself purchasing a digital artwork online at an affordable cost and receiving a one-of-a-kind token to prove your ownership. Sounds too good to be true, right? Well guess what - it is indeed possible through Non-Fungible Tokens (NFTs)! Now you can obtain unique digital tokens with every purchase, giving you authority over the artworks that you buy. NFTs make this dream come alive today!
NFTs are part of the crypto industry and are a form of cryptocurrency currently taking the digital art and collectibles world by storm. Everyone around the world had faith in Bitcoin as a digital currency, and now NFTs have been presented as the virtual solution to collectibles. Consequently, this has allowed digital artists to witness life-altering earnings due to their sale prices skyrocketing among new crypto enthusiasts.
What exactly is NFT
Non-fungible tokens, or NFTs, are a form of cryptographic asset based on blockchain technology. Unlike other cryptocurrencies, they cannot be exchanged or traded equivalently - these unique digital assets utilize the same type of programming used to create and manage cryptocurrency ecosystems. In short, they represent ownership of something that is irrefutably unique across all networks – from artworks to real estate titles!
A Non-Fungible Token (NFT) is something that can never be replaced nor exchanged due to its exclusive traits.
Key Features of NFT
Digital Asset - NFT is a revolutionary digital asset that offers certified authenticity of Internet collectibles like art, music, and games through the utilization of cutting-edge blockchain technology. This innovative framework serves as an underlying infrastructure for Cryptocurrency.
Unique - Unbreakable and impermeable, it is impossible to falsify or manipulate.
Exchange - Cryptocurrencies like Ethereum fuel the vibrant NFT exchange scene on dedicated platforms.
Why does someone buy an NFT?
Here are 5 of the top reasons why someone would buy an NFT:
Scarcity
- NFT art has become increasingly popular because of its scarcity. Creators have taken advantage of this shortage by adding rarity to their works, creating a lucrative and competitive market in the process.
Not Replicable -
NFTs are uniquely secured thanks to the blockchain, making them immutably non-fungible. Through this technology, fraudsters cannot forge original artwork or replace an authentic NFT with a counterfeit one. This smart contract stored on the blockchain also guarantees that these digital assets will remain protected and out of reach from dishonest traders.
Investments
- Investing in NFTs is becoming a popular way to store wealth, much like Bitcoin, gold, and silver. As an added bonus for savvy investors who purchase NFTs - many have seen their investment reap huge rewards!
Supporting Creators
- People often buy NFTs to show their support for their favorite musicians and creators while also possessing some part of the song or album. Plus, music NFTs are popular as they can also be used as tickets for events!
Exclusive Memberships
- NFT communities spark a powerful sense of camaraderie and connection among digital creators, who are able to produce unique collectibles that may be acquired by other members. This is why experts believe NFTs have gotten so popular - people will happily pay hundreds or even millions of dollars for the right token! It's all about feeling like you belong.
How does an NFT make money?
Creating and selling NFTs is an easy yet rewarding way to make money. Unlock your creativity by transforming digital assets - from artwork, photography, videos, and memes to properties - into income-generating Non-Fungible Tokens (NFT). Tap into the lucrative potential of a blockchain market that allows you to monetize all of your creations instantly!
What is an example of an NFT?
An NFT is a special type of cryptographically-secured digital asset that can represent anything from artwork to real estate titles. One of the most popular types of NFTs is CryptoKitties, which features unique virtual cats created using blockchain technology and includes their own backstory and unique attributes.
Getting Started in Crypto
5 steps for getting started in crypto
To begin with, if you wish to invest in cryptocurrency, it's essential that your finances are managed and organized. This includes putting aside an emergency fund, keeping debt levels low, and possessing a diversified selection of investments. Crypto can add yet another layer of diversity to your portfolio which could increase your total returns over time.
With that in mind, here are 5 things to consider before getting started in Crypto:
1. Understanding a Crypto Investment
As with any investment, it's essential to understand what you're investing in. On the surface, investing in cryptocurrencies is not too dissimilar from the process you'd take for investing in stocks and Shares. However, bear in mind that the specific mechanics are different so take into consideration individual cases when deciding which are worth your time and money.
For many cryptocurrencies, like Bitcoin for instance, there is an absence of "real" assets or cash flow to back them. Investors must trust that someone will pay more in the future than what they initially paid for it. Unlike stock investments where company profits can bring returns and growth potential, crypto assets depend on a bullish market sentiment if investors seek to gain any benefit from their investment.
Before investing, it is important to understand the possible benefits and risks associated with coins like Ethereum, Dogecoin, Solana or XRP. If your expenditure isn't supported by an asset or cash flow, there's a possibility that it might become worthless. Therefore weigh up all the options before deciding on which alternative offers you better return-on-investment opportunities.
2. Avoid FOMO
Oftentimes, novice investors make the mistake of relying on past performance to predict future returns. It's true that Bitcoin was once worth mere pennies and is now worth much more; yet, it remains unknown if this exponential growth will persist in the long term - even if its rate slows down significantly.
Investors should always look forward, never dwelling on the past. Instead of focusing on what an asset did yesterday, they consider what will help to generate future returns. Traders must search for tomorrow's rewards when investing in cryptocurrency today - not counting solely on the gains from days gone by.
3. Be cautious of the volatility
Cryptocurrency prices are exceptionally erratic and could plunge rapidly based on nothing more than a false allegation. This can be stimulating for advanced investors who have the means to perform trades promptly or possess a thorough understanding of how the market works, the trends present in it, and potential future movements. However, cryptocurrency trading is like navigating through an obstacle course for inexperienced traders lacking these capabilities (or access to high-tech algorithms).
Volatility is an alluring game for Wall Street investors, each racing to one-up their financial rivals. However, a new investor may be swiftly overwhelmed by the sheer volatility of this field.
Volatility can be an intimidating factor for traders, especially rookies, who quickly grow scared and flee the market. As these novice investors leave in fear, experienced traders take advantage of this opportunity to "buy low and sell high" as prices drop. This stands in stark contrast where rookie investors tend to “buy high and sell low” due to a lack of knowledge about the markets.
4. Have a Plan
As a short-term trader, it is essential to manage your risk - especially with highly volatile assets like cryptocurrency. As a beginner, you need to comprehend the best way of managing your risks and build a system that assists in preventing losses. Note: This process can differ from person to person – there's no one size fits all!
For novice traders, it's vital to set aside an appropriate amount of money for trading and only use a portion at the beginning. This way, even if your positions don't go as planned, you'll still have something left in reserve to continue with future trades. At the end of the day, without any capital, you won’t be able to make transactions or investments. Therefore by keeping some funds on hand you can ensure that there will consistently be resources available so that your trading is never hindered!
5. Don’t risk more than you are willing to lose
Ultimately, resist the urge to invest in speculative assets if you can't bear the thought of losing it all. Cryptocurrency and other risky investments are not worth it unless you're prepared for a total monetary loss.
If you need money for a short-term purchase like a down payment on a house, it's best to keep those funds in safe accounts so they're available when needed. For an absolutely secure return or savings opportunity, pay off your debt since the interest rate paid is guaranteed! This strategy guarantees you'll earn (or save) whatever interest rate that was previously charged and there's no way to lose by doing this.
Moreover, it’s critical to consider the security of your exchange or broker. Although you may possess legal ownership of these assets, they still need an element of protection that must be rigorous and reliable. Consequently, certain traders opt for a crypto wallet as the safest option - This stores their coins offline in order to keep them out of reach from malicious hackers or any other potential threats.
Getting Started With NFTs
The essentials needed to start with NFTs
To begin your NFT journey, you'll require a few items: A smartphone or laptop, an Ethereum-compatible crypto wallet like MetaMask, and some Ether coins. Without the latter two components in place, many NFTs on the Ethereum blockchain will be off-limits to you. Allocate sufficient Ether funds into your wallet before embarking upon this remarkable experience!
Of course, some projects launch on other blockchains and layer 2 platforms such as Solana, Polygon, Arbitrum or Immutable X. For example, to launch a project on Solana you’ll need to purchase SOL tokens which are the native cryptocurrency of the platform and set up a wallet using Phantom (or a similar soft wallet provider).
Going back to Ethereum, to start, you must set up your Metamask. Download the app or web extension and create your wallet without making mistakes that could leave your assets open to cyber theft. This part is super important:
NEVER GIVE OUT YOUR SEED PHRASE
Be careful with any screen sharing (a scammer used a screen share to steal over 100 ETH worth of NFTs from a friend recently), and double-check who DMs are coming from.
You can purchase Ether on popular exchanges like Binance or Coinbase.
Once you have your Ether in your wallet, you can now purchase your first Ethereum NFT.
How Do You Buy an NFT?
As a beginner who is just starting with NFTs the best place to buy your first NFT is an NFT marketplace.
There are several well-known NFT marketplaces like OpenSea, Rarible, SuperRare and Nifty Gateway offering a variety of digital assets.
Once you have your wallet set up and Ether coins loaded in it, start browsing an NFT marketplace you like the look of. You can search for tokens by category, artist or theme and filter results based on things such as price range or popularity. Once you find the piece you want to buy, click on it – this will give you more information about that particular token.
Once you’re ready to purchase an NFT simply select the “buy now” option and confirm the transaction using MetaMask. If everything is filled out correctly then congratulations, your first NFT is now yours!
NFT Minting
Another way to start with NFTs is to be one of the first to mint an NFT from a collection. Essentially this is where NFT creators or NFT developers publish their own NFT collection by publishing a smart contract onto their desired blockchain and creating a minting website so that users can connect their wallet and be the first to purchase one of these newly minted NFTs.
For the more popular NFT collections, the mint phase can be extremely competitive, with projects selling out their entire collection in minutes and investors requiring to pay huge gas fees to ensure that the transaction goes through.
If you are interested in a particular project, it's suggested that you try to obtain a Whitelist spot, which will enable you to mint the NFT before it moves to public consumption.
How to Sell NFTs
Here's how to sell an NFT you own in 5 simple steps:
Choose the NFT Marketplace where you'd like to sell the NFT (eg Opensea)
Connect the wallet and choose the NFT that you wish to sell
Pick a price that you would like the NFT to be listed for
Confirm the transaction in your wallet
Your NFT will now move from your wallet into a smart contract belonging to that marketplace (essentially an Escrow). If someone purchases it from the NFT platform, you will receive the amount you listed in your wallet, without any need to accept the transaction.
You may receive a counteroffer, which you can review and accept if you so wish.
How To Create an NFT
Would you like to turn a piece of art into your own NFT? Here's a quick guide on how you can mint your own NFT using a Crypto Wallet and NFT Platform.
Pick a digital platform that supports the creation of NFTs, such as SuperRare or MakersPlace.
Connect your wallet to start the minting process.
Select the type of asset you wish to upload, such as an image, video, audio file or 3D model.
Upload your art piece and add metadata with more information about it - including words associated with it and its provenance (that is, where it came from).
Set up pricing options for buyers. The price should be set in Ether tokens (ETH) and minimum/ maximum bids can also be specified. You can also select if you want to receive a royalty each time someone buys your NFT.
Once everything has been confirmed through your wallet, your NFT will start trading in the marketplace.
How To Create an NFT Collection
Creating an NFT is a more complex but rewarding process. It involves designing your own artwork, programming the smart contract to mint the NFT, and setting up the liquid markets around it. Here's a quick start guide:
Design & Create NFT Assets
First, you must design your artwork and create assets that are suitable for minting as an NFT. You can do this with any graphic design software like Adobe Photoshop or Sketch. Make sure that you have all of the necessary copyright permissions before you start creating too!
NFT Generative Art
You can also create NFTs with generative art. Generative art is computer-generated artwork that changes and evolves over time, typically using mathematical algorithms or chaos theory. This type of art is popular in the NFT world and some creators have even turned it into their own mini-businesses.
Smart Contract Programming
Once your artwork is finished, you'll need to start writing code for the specially designed smart contract which will allow you to publish and mint your NFTs on-chain. For this step, you can choose from a variety of languages such as Solidity, Python or JavaScript.
Host Art on IPFS
You'll also need to host your artwork on the InterPlanetary File System (IPFS) which will provide a permanent and immutable link to your artwork. This ensures that any future copies of your art piece will always refer back to the original, and is part of what makes NFTs so valuable.
Create a Minting Site
Finally, you'll need to create a website to feature your NFT collection. This site can showcase the artwork, explain its purpose and feature any relevant information about the project. You may also want to integrate with a marketplace such as OpenSea or Rarible in order to start trading your NFTs.
Creating a whole digital collectibles collection and NFT minting experience from scratch can be challenging. If you need help with this process you can join our Discord or get help from our crypto dev agency.
