What NFT Mean – Guide on understanding NFTs

What NFT mean and why they have taken over the art and gaming worlds. Whether you think they’re a passing fad or a fantastic new opportunity for artists, they continue to make news when they sell for millions of dollars.

Although the long-term viability of NFTs is still being disputed, they continue to sell like hotcakes on the internet. Many believe that NFTs are here to stay, and with the rise of Facebook’s metaverse, now seems like a good time as any to brush up on all things digital, so keep reading to learn everything there is to know about the elusive NFTs.

This year, non-fungible tokens (NFTs) appear to have exploded from the ether. These digital assets, which range from art and music to tacos and toilet paper, are selling like 17th-century exotic Dutch tulips, with some fetching millions of dollars.

Confused? Don’t worry—a there’s lot to absorb. That’s why we’ve simplified all you need to know about NFTs into an easy-to-understand tutorial. Let’s get started!

What is an NFT?

A digital asset that depicts real-world elements like as art, music, in-game items, and films is known as an NFT. They’re bought and traded online, often using cryptocurrency, and they’re usually encoded with the same software as many other cryptos.

NFTs are also one-of-a-kind, or at the very least one of a very small run, and contain unique identifying codes. “Essentially, NFTs generate digital scarcity,” explains Arry Yu, managing director of Yellow Umbrella Ventures and chair of the Washington Technology Industry Association’s Cascadia Blockchain Council.

However, many NFTs have been digital works that already exist in some form elsewhere, such as legendary video clips from NBA games or securitized versions of digital art that are already floating around on Instagram, at least in these early days.

For example, acclaimed digital artist Mike Winklemann, better known as “Beeple,” created “EVERYDAYS: The First 5000 Days,” possibly the most famous NFT of the moment, which sold at Christie’s for a record-breaking $69.3 million.

Individual images—or perhaps the full collage of images—can be viewed for free on the internet. So, why are people prepared to spend millions of dollars on something that might be easily screenshotted or downloaded?

Because a non-fungible token permits the buyer to keep the original object. It also comes with built-in authentication, which acts as proof of ownership. The “digital bragging rights” are almost as valuable as the item itself to collectors.

How does an NFT work?

NFTs are stored on a blockchain, which is a decentralized public ledger that keeps track of transactions. Most people are familiar with blockchain as the underlying technology that allows cryptocurrencies to exist.

NFTs are most commonly kept on the Ethereum blockchain, although they can also be held on other blockchains.

An NFT is made up of digital objects that represent both tangible and intangible objects, such as:

• Art
• Animated GIFs
• Highlights from sports and videos
• Antiques and collectibles
• Video game skins and virtual avatars
• Designer sneakers 
• Music

Even tweets are taken into account. Jack Dorsey, a co-founder of Twitter, sold his first tweet as an NFT for more over $2.9 million.

NFTs are essentially digital versions of tangible collector’s artifacts. As a result, rather than receiving an actual oil painting to put on the wall, the customer receives a digital file.

They also obtain exclusive rights to the property. It’s true: NFTs can only have one owner at a time. Because NFTs include unique data, it’s simple to verify ownership and transfer tokens between owners. They can also be used to hold specific information by the owner or author. Artists, for example, can sign their work by putting their signature in the metadata of an NFT.

Types of NFTs

The concept of what an NFT is still a bit hazy, as essentially anything can be classified as an NFT. Here are some of the more popular and useful NFTs on the market.

Art

The most commonly practiced form of NFT is art. NFTs were created as a way for artists to sell their best works online as if they were actual items. Many of the most expensive NFTs are currently works of art. According to Luno, the most valuable NFT ever sold is by renowned artist Beeple’s “Everyday: The First 5000 Days.” This piece fetched a stunning $69 million at auction. Other extremely expensive NFTs are breaking the financial accounts of billionaires.

This holds true for video art as well. Short videos and even animated GIFs have been selling like hotcakes for millions of dollars. A 10-second looping video titled “Crossroad” featuring a naked Donald Trump laying on the ground sold for $6.6 million. Beeple was responsible for this one as well.

Music

Music is also high on the NFT scale. For decades, music has been a fungible good, produced and distributed on vinyl, cassettes, CDs, and digitally. On the other hand, musicians and DJs have recently been selling their work as NFTs, earning millions of dollars in a matter of hours.

Due to streaming platforms and record label cuts, musicians typically only keep a small portion of the money generated by their work. NFTs allow musicians to keep about 100% of their earnings, which is why so many musicians are turning to this option.

Video Game Items

Video games are another frontier in the NFT space. NFTs aren’t used to sell complete games. In-game material, such as skins, characters, and other goods, will be sold instead. Players can now purchase millions of copies of DLC assets, but an NFT asset will be unique and exclusive to a single customer. Developers can offer standard DLC while also selling a limited edition version on the NFT market.

Trading Cards & Collectible Items

NFTs are similar to digital trading cards. We’ve all heard of limited edition baseball cards fetching hundreds of dollars, and the NFT market is no exception. On the market, people may buy and exchange virtual replicas of trading cards and keep them exactly like the real thing. Some sell for over a million dollars, just like the genuine thing.

On the NFT market, businesses can sell a variety of collectibles, not simply trading cards. Anything that might be considered a collectible can be put on the market.

Big Sports Moments

NFTs provide something that has no physical counterpart: memorable sporting moments. These are short videos of historic sporting events, such as game-changing slam dunks or game-changing touchdowns. These clips can be as brief as ten seconds long, but they can fetch up to $200,000.

Memes

On the NFT market, you can buy and trade memes, just when you thought the internet couldn’t get any more interesting. What’s even cooler is that the individual in the meme is sometimes the genuine merchant. The Nyan Cat, Bad Luck Brian, Disaster Girl, and other well-known memes are among those on the list, with earnings ranging from $30,000 to $770,000. The Doge meme, which sold for a whopping $4 million, is the most valuable meme to date.

Domain Names

The spread of NFT fever isn’t limited to domain names. You can register a domain name and then sell it on the NFT market, which has several advantages. The majority of the time, you’ll have to pay a third-party business to manage your domain name. You will be able to claim exclusive ownership of the domain if you purchase one on the NFT market, cutting away the intermediary.

Top 10 Most Famous Expensive NFTs

Everydays: the First 5000 Days – $69.3 million

Beeple, the artist, was not as well-known as you might think prior to last year. He did, however, sell one of the most valuable NFT artworks on the market in 2021. “Everydays: the First 5000 Days” is the title of the piece. The fact that this sale took place at Christie’s makes it even more interesting.

The bidding started at $100, but it quickly increased, and it was eventually sold for $69.3 million! You could be thinking to yourself, “Wow, that’s a lot of money for some digital art.” Isn’t it evident that, with the technology revolution, we’ll soon be moving away from physical paintings and toward digital paintings?

In any case, this piece was a compilation of Beeple’s first 5000 digital artworks. In truth, since May 2007, when Beeple began creating digital art, he has not missed a single day. As a result, the collection contains a wide range of styles, subjects, and media. Even though some of the earlier ones were clearly not up to par, the value of the group as a whole skyrockets. And it’s for this reason that this is one of the most costly NFTs ever sold. This is unquestionably one of the most beneficial non-fungible tokens in 2021.

CryptoPunk #3100 – $7.58 Million

CryptoPunks is a brand-new type of NFT creation. These are the very first NFTs to hit the market, and after the NFT boom, many of them are now selling for millions! That’s why CryptoPunk #3100, the second most expensive NFT ever sold, is also on our list.

In truth, this CryptoPunk is a one-of-a-kind creature that belongs to a group of nine aliens. CryptoPunks, you see, only has 10,000 punks in stock. Furthermore, only 9 of them are aliens. As you can see, these nine are among their most valuable collections. These tokens are also ERC-20 tokens, which means they adhere to ERC guidelines.

The character comes with a blue-greenish skin tone and an accessory. It’s a headband in this case, and only 406 punks have this gear. Even more so because it only comes with a single accessory, which is also uncommon, and only 333 punks have one. This punk is extremely unusual, based on the kind, accoutrements, and accessory quantities. Because of this, it was sold for $7.58 million.

CryptoPunk #7804 – $7.57 Million

Another CryptoPunk in our top ten most expensive NFTs list, with a price tag of $7.57 million.Another alien is the Punk #7804, which comes with three attachments this time. Accessories include a cap forward, small shades, and a pipe.Only 254 punks are said to have the cap forward, 378 punks have the pipe, and 317 punks have little sunglasses. However, the pricing is based on the notion that alien punks are relatively uncommon.

When the firm originally started giving out the 10,000 CryptoPunks, Dylan Field was the one who got the punk back in. In actuality, he is the founder of the technological design business, Figma. But why did he pay so much for that punk? He spotted the potential in this Ethereum-based NFT, which prompted him to purchase it in 2018.

Crossroads – $6.6 Million

Crossroads is another of our most expensive NFTs. This is another Beeple piece, and it was sold just days before the enormous sale of Everydays. Furthermore, the artist was able to sell this piece on Nifty Gateway. Also, unlike Everydays, this is a single piece of artwork rather than a compilation. As a result, the appraisal of this piece makes it even more costly.

Well, the artwork is a political risk and a response to the upcoming presidential election in 2020. The artist created two versions of this, one for if Trump wins and the other for if Trump loses. And the video would alter depending on the election results.

The first Tweet – $2.9 Million

The first tweet is next on our list of the most costly NFTs in 2021. In truth, after founding Twitter in 2006, CEO and founder Jack Dorsey sent out the first tweet. “Just putting up my twttr,” the tweet read. Later, he sold this tweet as an NFT for a whopping $2.9 million! Given the tremendous popularity of the social media site Twitter, it’s hardly surprising that the first tweet will receive so much attention. This is a brand-new type of asset tokenization.

In any case, the creator sold this tweet to Oracle CEO Sina Estav, who considers it as significant as purchasing the Mona Lisa. Furthermore, the CEO auctioned off this tweet on Valuables, an online auction platform. They will take a 5% cut from the selling price, according to the platform’s terms. Although the tweet will remain on Twitter, Sina is now the owner of the item.

CryptoPunk #6965 – $1.54 Million

Another punk is one of the most expensive NFTs in 2021, according to our calculations. As previously said, each CryptoPunk has his or her own set of qualities and attributes. As a result, this punk isn’t any different. CryptoPunk #6965 is a member of the Ape species. It also includes a Fedora hat as a bonus. Furthermore, just 186 punks wear Fedoras, and only 24 are Ape punks. That’s why it’s worth $1.54 million! These aren’t ERC-721 tokens, but they’re similar to ERC-20 tokens.

Axie Infinity Genesis Land – $1.5 Million

If you play virtual games, you are aware of how expensive in-game stuff may be. However, Axie Infinity, an Ethereum-based virtual game, may have pushed it to the next level. Genesis Land is incredibly scarce in the game, and it comes with a significant cost. However, a member of the community recently paid $1.5 million for nine Genesis blocks! As a result, in 2021, it will be one of the most expensive NFTs.

It was valued at 888.25 ether at the time of sale. However, the value has skyrocketed in recent months as the price of ether has risen as well.

CryptoPunk #4156 – $1.25 Million

Next on our list is CryptoPunk #4156, which is the most costly NFT ever sold on the market. That’s correct, another CryptoPunk has made it onto our list. This time it’s another ape punk, and this time it comes with a blue bandana as a bonus. Only 481 punks out of a total of 10,000 have this characteristic. For $1.25 million, it now belongs to the Ethereum address 0xf476cd. However, purchasing CryptoPunks will require Ethereum Gas, so keep that in mind if you wish to buy some.

Not Forgotten, But Gone – $1 Million

Do you want to spend millions on a revolving gummy bear video clip? This is exactly what happened with the Nifty Gateway NFT sales. This piece was created by an artist named WhIsBe. He appears to use a variety of gummy bears in a variety of inventive ways. It’s a 16-second movie of a rotating golden gummy bear skeleton called “Not Forgotten, But Gone,” and it’s titled “Not Forgotten, But Gone.” This sculpture was sold for $1 million by the artist.

Metarift-$904.41K

This is another Satoshi issue, as no one knows who created the artwork. The artist is known as “Pak,” although no one knows his true identity. Pak is apparently quite popular in the digital art scene, and the piece was sold for $904.41K because of its enigmatic character. Some spherical objects are packed together in the NFT art, and they rotate in diverse directions. This is only one example of how NFTs can be used; they aren’t just for art!

What are NFTs used for?

Artists and content creators have a one-of-a-kind opportunity to monetise their work thanks to blockchain technology and NFTs.  Artists, for example, no longer have to sell their work through galleries or auction houses. Instead, the artist can sell it as an NFT straight to the consumer, allowing them to keep a larger portion of the profit. Additionally, artists can integrate royalties into their software so that they receive a share of sales when their work is sold to a new owner. This is a desirable feature because most artists do not receive subsequent proceeds after their first sale.

Making money using NFTs isn’t limited to art. To raise money for charity, companies like Charmin and Taco Bell have auctioned off themed NFT art. Taco Bell’s NFT art sold out in minutes, with the highest bids coming in at 1.5 wrapped ether (WETH)—equal to $3,723.83 at the time of writing. Charmin’s offering was dubbed “NFTP” (non-fungible toilet paper), and Taco Bell’s NFT art sold out in minutes, with the highest bids coming in at 1.5 wrapped ether (WETH)—equal to $3,723.83 at the time of writing.

What is a cryptocurrency wallet?

You’ll need a cryptocurrency wallet to buy NFTs. Isn’t the name itself a little frightening? What is a cryptocurrency wallet? Yes, Dios mo! But don’t worry; it will become more prevalent with time.

We’d like to clear up a common misconception right away: your crypto wallet does not hold any crypto, coin, or tokens! No, it’s not full of the cute GIFs and PNGs you’ve seen on Twitter.

You’d be excused for believing they work like a traditional wallet with cash and coins, but they’re more akin to a debit card or a bank in principle.

How so? Each of your wallet’s crypto addresses has a public and private key. You can provide the public key to anyone, just as you may give someone your bank account number to pay you or your email address to message you.

Key functions

However, the public key alone will not allow you to access the funds within.

However, the private key functions similarly to your debit card PIN in that it is needed to make payments and prove ownership of the address. You should never give away your private key to anyone, much like your PIN. If someone gets access to both your public and private keys, they can drain all of your funds. This has happened to veterans of the space program, so be wary of con artists. NEVER SHARE YOUR PRIVATE KEY!

So, to cut to the chase, here’s a step-by-step guide to buying your first NFT on the Ethereum network. It may appear time-consuming at first, but this is a one-time setup that will allow you to quickly acquire and sell NFTs.

Step 1 — Set up Your Crypto Wallet. 

Cryptocurrency wallets are similar to bank accounts in the traditional banking system. They are used to communicate with blockchain networks to safely access, send and receive crypto funds (i.e. Bitcoin, Ether etc.) or assets (such as NFTs). There are two types of crypto wallets — custodial and non-custodial.

• Custodial Wallets: such as Coinbase, Binance, and BitMEX, are third-party services that hold your private keys and have complete control over your cash. Although this is convenient and can result in lower fees, you must be concerned about data breaches and the fact that the custodian has the authority to freeze your cash for any reason.

• Non-custodial wallet: You’ll need a non-custodial wallet like MetaMask to buy NFTs. You always retain ownership and control of your private keys with these wallets. MetaMask provides all of the advantages of a web wallet while avoiding the drawbacks of custodial wallets. MetaMask has grown to over 5 million active monthly users as a result of this combination. Whoa!

let’s just say that you need a non-custodial wallet to buy NFTs. The most popular and easy to use wallet is MetaMask.

What is metamask?

MetaMask (which, like Decrypt, is supported by Ethereum incubator ConsenSys) is a browser plugin that acts as an Ethereum wallet and can be installed just like any other plugin. It allows users to store Ether and other ERC-20 tokens and perform transactions to any Ethereum address once it’s installed.

Users can spend their coins in games, stake tokens in gambling apps, and trade them on decentralized exchanges by connecting to Ethereum-based Dapps. It also gives consumers a way into the nascent world of decentralized finance, or DeFi, by allowing them to use DeFi apps like Compound and PoolTogether.

Setting up a MetaMask Wallet:

MetaMask requires the installation of a Chrome Extension. To download and install MetaMask, search for it on Google or go to this page.

1. Click on Install MetaMask for Chrome to start the installation.

2. Add MetaMask to your Chrome extensions

3. Click on Get Started

4. Click on Create a Wallet.

5. Follow the prompts and Create Password.

6. Reveal Secret Backup Phrase.

This is by far the most delicate phase of the wallet setup process. A secret backup phrase is a 12-word phrase that can be used to regain access to your wallet if you forget your password or log in using a different computer.

No one should ever ask for your secret backup phase, so don’t give it out to anyone.

Write it in multiple places that only you can access and make sure you do not lose your secret phrase. If lost, you will not be able to access your wallet in case your computer is lost, stolen, or if data gets corrupted.

Step 2 — Buy or Transfer Ether (ETH)

Once you have set up your MetaMask wallet, you will need Ether (ETH) to pay for your first NFT. You can either buy ETH on Metamask or transfer it from another existing wallet.

Buying ETH on MetaMask

You can buy ETH on MetaMask using your credit or debit card.

1. Click on Buy and follow the prompts.

2. Click on Continue to Wyre

3. Convert USD or any other currency into ETH

Enter your credit/ debit card information on the next page, and ETH will be credited to your wallet.

It’s worth noting that you’ll have to pay a network and transaction cost to convert. It’s a percentage of the total amount of USD you want to exchange. I feel it is a bit higher in Wyre, and for that reason, I prefer transferring it from my custodial wallet in BTC Markets.

Transferring ETH From Another Wallet

You can transfer ETH from another wallet by going to the “Withdraw” page of your respective exchange and entering your wallet address. Here is a screenshot of the “withdraw” page on my BTC Markets account.

A wallet address is a one-of-a-kind digital address comprised of letters and numbers that may be used to transfer and receive digital currencies like Bitcoin and Ether. In the old banking system, it’s analogous to an account number. Wallet addresses are open to the public and are safe to disclose.

Your MetaMask wallet address can be found at the top, as seen below.

Step 3 — Set up Your Opensea Account

1. After depositing ETH to your MetaMask wallet, the next step is to create an account on an NFT marketplace like OpenSea.
2. NFT marketplaces are online venues for storing, displaying, and trading NFTs. These markets are similar to Amazon or eBay in terms of NFTs.
3. Create an account on the OpenSea website by clicking on My Profile, Sign in, and following the instructions.
4. Set up your account by following the directions. It’s simple and only takes a few minutes to complete.
5. To see the NFTs that are available in your wallet after purchase, you’ll need to connect your MetaMask Wallet to OpenSea.
6. To connect your wallet, click Get MetaMask and follow the directions.

Step 4–Buying NFTs on OpenSea:

The exciting part of purchasing your first NFT begins now.

1. Go to OpenSea and look for the NFT you’d like to buy.

Let’s imagine you’re interested in purchasing an NFT of The Doge Pound project. In the search bar, type its name. Popular NFT projects are usually marked as “Verified” with a blue checkmark. So, keep an eye out for that to avoid phony collections.

2. Select your preferred NFT by clicking on it.

3. Click on Buy Now. On the subsequent page, click on “Buy Now” to purchase your NFT

4. Review Total and click on Checkout.

To complete your NFT purchase, follow the directions. To finish your purchase, review the gas fee and approve the transaction in your MetaMask wallet, similar to the minting process.

So there you have it! You’ve just made your first NFT purchase. Congratulations!