Non-fungible tokens (NFTs) are the latest new buzzword in the blockchain community, but they’re still very new and largely misunderstood by most people.
Suppose you’re wondering what exactly NFTs explained is, how they work, and their uses. This step-by-step guide to non-fungible tokens will help you understand all about them at no time!
Overview of NFTs
The first thing you should know about non-fungible tokens is that NFTs explained are cryptocurrencies. In that respect, they behave the same way as all other cryptocurrencies. They use a shared ledger that records every transaction and uses unique digital addresses to make transactions final.
The only difference between an NFT and a regular cryptocurrency is that you can’t transfer an entire NFT—you can only swap it for another one or trade it with someone else who owns one.
Think of it like you’re trading baseball cards: You can’t just give your friend ten baseball cards at once; instead, you have to give them each card individually.
This is why NFTs are also known as non-divisible tokens. However, unlike baseball cards, which lose value over time due to wear and tear, blockchain assets retain their value indefinitely because they aren’t stored on physical objects that degrade over time.
If you hold onto your digital asset, it will always be worth what you paid for it. Moreover, while most people would be lucky to get one autograph from their favorite ballplayer, you could potentially own a piece of dozens or even hundreds of athletes with blockchain assets.
Some NFTs allow you to track your ownership rights through tamper-proof certificates.
Well, there is a vital reason why investors might want to buy NFTs explained: to make money.
NFTs allow you to make money. You can achieve this in various ways, including trading NFTs, gaming, creating and selling NFTs, etc. however, before that, you’ll need to research how to buy NFTs and the right marketplace to buy.
And like most technologies, most people have now started to accept the technology. So, it is becoming among the lucrative offers in the market.
Suppose you want to get started today? Let’s dive into the simple steps to follow:
What type of NFT would you like to create? NFTs can be made with avatars, digital file formats, and GIFs. All can be made into Non-Functional Trademarks, including digital photos. Ensure it is your own work or something you can claim.
2. Pick a Marketplace
There are many markets out there for you to sell your NFTs, but some are better for individual creators. This is because all markets have unique features that make them suitable.
OpenSea, running on the Ethereum blockchain, currently has the biggest user base and trading volume and is a go-to for many NFT creators and buyers.
Although some marketplace offers the ability to list your NFT for free, any subsequent sale requires the buyer to cover the gas fee or the amount of a transaction needed to write data on a blockchain network. Additionally, other fees will apply.
Only some platforms let you join and create your own NFTs if you receive an invitation. Meanwhile, popular marketplaces such as Magic Eden can only do secondary transactions.
3. Create a Crypto Wallet
To send and receive crypto, you’ll need a compatible crypto wallet. Crypto wallets store your private keys, including your cryptocurrencies and Non-Fungible Tokens, and let you send and receive tokens with your wallet address.
Never lose your login credentials and security words, which are simple words that give you access to your wallet. That’s because platforms cannot help you recover them. If you do, you will lose access to your crypto assets.
4. Upload and mint
Now that you have a crypto wallet set up, you can create new tokens.
From the top of the marketplace platform, click create and connect your wallet with the platform by following the prompt.
Simply upload the file you’ve prepared, add a name and description, and choose if you want the print to be minted on Ethereum or Polygon. Finally, to complete the process, press the create button. Your new NFT will not be registered on the blockchain until you sell it.
One thing to keep in mind when selling your first NFTs is that the platform will require a one-time gas fee, which varies in price.
To sell Non-Fungible Token (NFT), buyers will not have to pay the sales fee but instead, need to go through the Ethereum blockchain conversion process.
And if not accustomed to the process, you will need to acquire Ether. Additionally, to transfer Ethereum to NFTs explained takes gas which incurs a transaction fee.
NFTs are an exciting new development in cryptocurrency that offer many benefits. But to get started, you’ll need to follow the above step-by-step guide. To get you on your way, research information about NFTs.