NFTs are slowly and surely taking over the world of art and gaming, and it is showing no signs of stopping down anytime soon. Regardless of what you think of it, they will continue to make the headlines when they sell for millions of dollars, just like the best high roller casinos.
So, what is NFT? NFT stands for a “non-fungible token”, which also means that it is a unique and non-interchangeable unit of data stored on a digital ledger that also uses blockchain technology to establish proof of ownership. NFTs are also described as digital assets that have value, just like the physical arts.
NFTs are like cryptocurrencies such as Ethereum, Litecoin and Bitcoin. However, this digital asset is unique and it can’t be exchanged or traded at equivalency. This makes it different from the cryptos, as it can be used as a medium for commercial transactions. The file stores extra information which places it above pure currency, but that doesn’t really mean it’s above all currency, right?
While there are NFTs worth over $30,000, there are also some that are priced so low that you might end up having second thoughts if it was NFT at all.
Any reproduced digital file can literary be stored as an NFT to identify the original, just like it’s done with art, photography, music, videos, tweets, and even memes. NFTs can be made from almost anything unique that can be stored digitally. It is just like how an art painting works, but instead of buying the physical item, you’re buying the file and proof that you’re the owner of the original copy.
How NFTs Work
The identity and ownership of an NFT can easily be verified through the blockchain ledger, which was first launched on the Ethereum blockchain before FLOW and Bitcoin Cash started supporting them. Be it the original format of the file is an MP3, JPG, GIF, or any other thing, the NFT that has its ownership intact can be bought or sold – and just like physical art, the price will be determined by its market value.
For example, when you walk into an art gallery shop, you would find several replicated prints of famous masterpieces by different artists, there are some NFTs that work in the way. There are other parts of the blockchain that are completely valid, but they just won’t have the same value as the original itself.
NFTs, at most times, come with a license to the digital assets it claims, but this doesn’t automatically guarantee copyright ownership. The copyright owner could reproduce the file and the NFT owner will have no royalties.
Can Anyone Make NFTs?
Well, yes. Anyone – even a real money online casino games’ users – can create a piece of art and transform it into an NFT on the blockchain – which is a process called ‘minting’ – and place it up for sale. You can even add a commission to the file so that every time a user buys the piece through a resale, you will get paid.
Just like how you need to set up a wallet for cryptocurrencies, it’s the same for NFTs. However, the requirement for money upfront brings forth the complications for the reason everybody’s not delving into it.
The hidden fees can be astronomical, as sites charge a ‘gas’ fee (a fee required to process and validate transactions) for every sale along with a fee for selling and buying. Besides this, you also need to consider conversion fees and fluctuations in price. All these fees can often become higher than the price you sell the NFT for.
NFTs are seen as a proficient way to make artists take back the limelight, and it continues to make headlines every week. If you intend to venture into it, you should take caution and make careful consideration regarding what platform to use.