2020 was a significant year in the history of cryptocurrencies, as assets like Bitcoin and Ethereum performed exceedingly. The year also saw the outburst of the Decentralized Finance (DeFi) space and also the Non-fungible token (NFT) market. While the success of the DeFi ecosystem was forthcoming, that of the NFT space came as a surprise. That uprising saw the NFT space triple its market capitalization, placing its worth around $250 million. However, that immense growth would signal the beginning of other groundbreaking achievements of the NFT ecosystem.
What Are NFTs?
Non-fungible tokens (NFTs) are cryptographic assets on a blockchain with unique identification codes. They are non-fungible and possess metadata that makes them unique from each other. NFTs are also proof of authenticity and ownership within a blockchain network. Unlike cryptocurrencies, which are fungible tokens, they are not identical. One cannot also use them to settle transactions. These unique tokens can not be traded or exchanged as they do not possess equal value. This is because no two NFTS are the same.
NFTs are tokenized versions of digital or real-world assets like real estate and artworks. Their presence on the Blockchain means that they can remove intermediaries, simplify transactions, and create new markets. One advantage of owning one is that it contains information distinguishing it from other NFTs, which is easily verifiable. Hence, why it’s impossible to create and circulate fake NFTs. This is why one can trace it back to the original issuer. The existence of NFTs can take the form of pictures, sounds, videos, or any compatible media.
Unique Features Of NFTs
While NFTs have similarities with regular cryptocurrencies, some differences exist between both digital assets. However, listed below are features of NFTs that qualify them as cryptocurrencies and equally distinguishes them:
Utility
NFT use case is cross-border and even has applications outside the crypto ecosystem. Their usage in DApps allows the creation and ownership of unique digital items and collectibles. They also have the potential to be critical components of a new blockchain-powered digital economy. As of today, NFT’s use case cut across gaming, digital identity, licensing, certificates, and fine arts.
Verifiable
Storing NFTs on a blockchain means that they can be easily verified and traced back to their owner. This is why it is easy for the buyer to authenticate its ownership easily.
Non-interoperable
Like cryptocurrencies, NFTs are non-interoperable, as one can’t use them interchangeably. This is because you cannot use one NFT obtained from a platform on another platform.
Indivisible
Their non-fungible nature means that NFTs cannot be divisible into smaller units, like fiat money or cryptocurrencies. For example, a dollar bill is divisible into smaller units like cents or lower denominations. Another example is a cryptocurrency like Bitcoin, divisible into Bitcoin satoshis.
Indestructible
Since smart contracts store NFT data on the Blockchain, they are indestructible. Alternatively, NFTs cannot also be altered, removed, or even duplicated.
Why Should I Invest In NFTs?
While NFTs are not typical cryptocurrencies, they offer crypto investors an opportunity to learn more about blockchain technology. While diversifying their investments, investors can understand cryptocurrencies better by committing small funds to collectibles. Another pro of investing in NFT is that it utilizes blockchain technology to signify asset ownership digitally. This makes the investors’ asset ownership secure and transparent. Also, unlike cryptocurrencies, anyone can invest in NFTs. With little knowledge about cryptocurrencies, anyone can mint and trade tokenized assets. Lastly, NFTs are valuable in today’s market, as creators continue to rake in millions of dollars from their sales.
How To Create (Mint) An NFT
Minting or creating an NFT can be a profitable investment, considering their popularity and value proposition to users. The process can be time-consuming and resourceful and, unfortunately, also have the potential for losses. However, listed below is a step-by-step guide on how to mint and sell an NFT:
Choosing your item
This is the first step in making an NFT, as it will propel your journey into NFTs. This requires you to pick a unique digital asset you want to turn into NFT. It is also essential to ensure that this item is your intellectual property and you have rights over them. This is because they are rare and unique digital items with a sole owner, and that rarity makes them valuable. Items like paintings, pictures, music, video game collectible, and memes can become an NFT.
Selecting a host (Blockchain)
After choosing your item, picking your Blockchain is the next. Transaction costs and scalability are two of the most important factors to consider when choosing a blockchain. NFT creators have many options, including Ethereum, Binance Smart Chain, Polkadot, and Cosmos.
Setting up your digital wallet
This is important because you’ll need some cryptocurrency to fund your initial investment. However, if you already have one, you will have to ensure it has funds. The top wallets include Metamask, AlphaWallet, Trust Wallet, and Coinbase Wallet.
Select your NFT marketplace
Picking an NFT marketplace is a significant decision, as it will help you get value off your item. It is essential to research the best place for your NFT type, as some marketplace are bespoke. The top marketplaces include OpenSea, Axie Marketplace, Larva Labs, NBA Top Shot, Rarible, SuperRare, Foundation, Nifty Gateway, and ThetaDrop.
Sales process
After creating your NFT on the digital marketplace, the next step is to execute its sale. Most marketplaces also allow users to set unlimited auctions on their sales. If you set your item on an auction, you must determine its minimum price. Before setting the minimum price, it is important to consider the cost of minting and other expenditures. Depending on the platform, you could pay a listing fee, minting fee, transaction fee, and commission before earning an NFT. There is also the option of royalties, as it allows one to keep earning from the item if it resells on the secondary market.
Top Five Upcoming NFT Sale
The digital marketplace generates huge revenues week-in and week-out, most of which are record-breaking sales. This is evidence of the growth of the market in the last three years. Creators like Beeple, CryptoPunks, and PAK are some of the space’s highest earners. However, according to CoinMarketCap, below are the top five NFTs listed for sale in May 2022:
Tiger Toonz
The Tiger Toonz is a collection of 3,333 randomly generated NFTs on the Ethereum Blockchain. Each Tiger Toonz comprises unique eyes, mouth, body type, clothing, headgear, and a hand item. According to its creators, its mission is to revolutionize NFT gaming with a unique game-themed experience. The promise for fans is to incorporate the genesis tiger toonz and its future companions into this experience. To improve the value of the project, its creators plan to produce physical merchandise in the future. The item is on Ethereum and will auction on Opensea between May 1 to May 8, 2022. The starting price is 0.03 ETH.
Dropout Bears
The Dropout Bears is the first of many collections attending Dropout University on the Solana Blockchain. It features 808 Bears taking over the Solana Blockchain. All Dropouts are unique, while some will be rarer than others. Holding this item will give holders access to our DropoutDAO. Investors can also Stake their Dropout Bears to earn $TUITION. The NFT is on Solana and will auction on Opensea from May 1, 2022. The starting price is 0.5 SOL.
Pandimensionals
The Pandimensionals features characters from Sam Banfield’s (aka Ulyees Funk) Broadcliff novel series. Funk created the NFT universe and collectibles in partnership with PJ Cooper. Apart from charity to marine conservation and local beach cleanups globally, it aims to be the JRR token of NFTs. They believe they are just starting and promise holders alot of goodies in the future. The collectibles reside on Ethereum and will auction from April 30 to May 7, 2022. Its pre-sale price is 0.05 ETH, and bidding starts from the same price. At writing, its pre-mint registration is open for all.
Ksekai
The Ksekai is a project that promises fun and massive cash rewards for everyone. Its history revolves around a 2250 human technology development route. It centers around the release of a toxic laboratory chemical that will spread through the globes of the earth. This dispersion will turn all humanity and creatures into Ksekai. The collectibles can be minted on Ethereum and will auction from April 30 to May 7, 2022. Its whitelist mint will begin on April 30, with a price pegged at 0.1 ETH. Pre-minting will start the next day for 0.15 ETH each. The public mint of the collectible will begin May 2, with its price set at 0.2 ETH.
AngelBlock
The AngelBlock are a collection of 6700 unique and programmatically generated NFTs with varying traits, attributes, and rarity. Its total available supply is 6,900 collectibles, at a mint price of 0.069 ETH each. The projects transfer their intellectual ownership to holders, who are free to do what they want with it. Investors also enjoy bonuses, higher limits, priority, and access to multiple exclusives. For its startups, they are also bonuses, various raise options, access to support, and community tools. The community member also gets multiple bonuses, quests rewards, voting power multiplier in DAO, and social rankings. The collectibles are on Ethereum and will auction from May 4 to May 11, 2022.