NFTs have taken up the virtual art & design industry by storm.
But what exactly are NFTs?
- What is up with multi-millionaires obsessing over what appears to be simple clipart or a JPEG that you can conveniently find on google??
- Why are news channels & journalists are increasingly mentioning NFTs every now and then?
- Why are entrepreneurs, influencers & celebrities talking can’t stop discussing it on their social media platforms?
- Why are YouTube channels are using it as a click-bait to grab more views on their videos?
These questions may be lingering at the back of your head, and you may be wondering, especially if you have absolutely no idea about NFTs,
NFTs Are Over-rated. Period.
Well, it’s everything but THAT. This blog contains answers to all your questions, and confusion regarding NFTs. In this blog, we will explain to you what NFTs are, and how these digital assets have revolutionized the virtual art and design space. From the definition of NFTs to how they suddenly became the talk of the town to different types of NFTs to the process of creating and selling them, we will cover everything.
The NFT BOOM!!
NFTs have existed since 2014. However, they started making headlines when giant brands and renowned artists started talking about it. People are paying millions and billions of dollars to enjoy a sense of ownership over something that only exists as a computer code. The NFT Art industry has skyrocketed to a whopping 35 billion dollars and is expected to hit 80 billion dollars by the end of 2025. That sounds crazy. Right?
Renowned sports brand, Adidas collaborated with Prada and introduced a comprehensive collection of 10000 unique Bored Ape NFTs in the market. Popular fast-food chain McDonald’s have leveraged NFTs to sustain their strong market position.
Coca-Cola has also incorporated NFTs in its marketing campaign. Several people claim that Gary Vaynerchuck is one of the reasons behind the sudden boom of the NFTs. Gary Vaynerchuck is a Belarusian-American entrepreneur with 3.7 million followers on YouTube and 13.3 million followers on Tiktok. Netizens believe Vaynerchuck used his power of social media presence to boost the prices of the NFT Collections which majorly contributed to the NFT boom we are witnessing today. After taking the art and gaming world by storm in million-dollar auctions, NFTs have now exploded into the mainstream with celebrities and big brands getting involved. Adidas minted some with Bored Ape Yacht Club and then launched a collaborative NFT project with Prada. If you’re still completely baffled – and we certainly don’t blame you if you are, below we’ll answer the question what are NFTs? and also touch on how they can be used by creative professionals.
So, What Are NFTs?
Before we delve into that, let’s understand Blockchain first. Blockchain is the technology that regulates the sell and purchase of NFTs. Blockchain is a digital ledger that keeps a track of all the people who own a digital asset. Let’s put it more simply. Just like how traditional auction houses authenticate different artworks and their owners, blockchain does the same thing – only digitally. The artworks are stored as small blocks as a permanent record of ownership across millions of computers.
NFTs stand for Nonfungible tokens.
Nonfungible means each digital asset has its own unique value. From a painting to music to sound recordings to text or even an unnoticeable design element, anything can be treated as an NFT. Last year, the founder of Twitter, Jack Dorsey, sold his first-ever tweet as an NFT for a whopping 2.9 million dollars!
This means that Dorsey doesn’t own that tweet anymore. He transferred the ownership of the tweet to his buyer, Sina Estavi, who is a CEO of a blockchain company Bridge Oracle in Malaysia. We know what you are thinking,
Why Do People Spend Millions of Dollars on NFTs? It makes no sense!
Let’s understand one thing. When we see a headline about an unbelievable amount being spent on what appears to be a JPEG, the first thought that probably comes to our mind is how absurd is this and that you would have never done it. But these people, flaunting their NFTs, aren’t ordinary people. Expensive things are purchased by affluent individuals and these individuals tend to spend a lot on status symbols. In isolation, the above statement appears ridiculous and if you think about how wealthy people spend money and lead extravagant lifestyles, it would seem less ridiculous and make more sense. NFTs have become a status symbol for the rich class. You are probably still wondering
When You Can Right-Click & Save A JPEG, Why Spend Millions of Dollars for It?
Well, you can click hundreds of pictures of the world-famous Mona Lisa painting. People have even made several copies of it but they aren’t the same as the original painting. No matter how many versions of Mona Lisa are present out there, the uniqueness of the original painting remains intact. We all know there is only one Mona Lisa Painting – the original one. Similarly, you can buy a nice house in the suburbs almost in any corner of the world for $1 million, yet celebrities are seen flaunting their $100,000 mansions. You can easily find a watch for under $200 yet brands like Rolex sell their watches for up to a whopping $2 million which is almost 10,000 times more than the regular watches! Rich people have a very specific audience in their minds. A successful entrepreneur sporting his Rolex, or a celebrity showing off their Mercedes don’t care that we believe that either of those items is extravagant. They have a specific, powerful group of people they want to influence. These days, they are impressing their limited audience with NFTs. We hope it’s making all the sense now…
Let’s Address Your Most Common Questions Regarding NFTs
Before you decide to jump on the NFT bandwagon, we highly suggest you go through these most common questions regarding NFTs. They will clear more air on Nonfungible Tokens. Let’s delve right into the questions,
What Makes an NFT Valuable?
It’s the ingenuity and originality of the NFT – nonfungible token, that makes it valuable. While NFT itself doesn’t possess the digital property but it’s the space it has on the blockchain that’s worth all the money. Like a limited-edition watch, or a deed to a physical property, an NFT depicts the value of the thing it represents.
Is NFT The Same as Cryptocurrency?
No. NFTs are not cryptocurrencies. Both exist on the blockchain though. Cryptocurrency is the digital form of currency just like USD or EUR and they are used to buy NFTs. Some common cryptocurrencies are Bitcoin and Ethereum.
What Is the Connection Between Blockchain And NFT?
The blockchain is a digital ledger that keeps a track of all the transactions used to buy and sell NFTs is and also keeps a record of all the transactions connected to the NFT and the property it represents. Many NFTs are held on the Ethereum blockchain.
Are NFTs The Future of Art And Collectibles?
You can say that. Previously, the affluent class used to collect limited edition watches or cars as their status symbol. Now they have shifted to NFTs. NFTs are a great income opportunity for several aspiring artists and musicians to sell their talent as NFTs because rich celebrities and influencers are willing to pay millions of dollars for it.
What Are the Most Popular NFTs?
Some of most influential and best-selling NFTs as of 18th February 2022 are the following.
- The Sandbox.
- Art Blocks.
- Cool Cats.
- FLUF World.
How Do I Find Out If My NFT Is Genuine?
You can simply find out if your NFT is authentic by tracking and verifying it through Etherscan.io
Simply go to the website, and input your wallet address into the search bar. Click on the desired tokens you wish to see. Then choose the particular transaction hash (NFT) you want view and verify it’s ‘status’ and ‘tokens transferred’ option.
Can NFTs Be Treated as An Investment?
Absolutely! People often buy NFTs not just to keep appearances but also for investment purposes. NFTs are secured digital assets and can be used for investment.
Is Bitcoin An NFT?
NFT and Bitcoin are not the same things. While Bitcoin is the digital currency, NFT is digital assets that are bought using digital currency. Bitcoin is fungible which means it can be traded or exchanged. However, NFTs, as their name suggests, are non-fungible meaning irreplaceable and unique.
What Kinds of NFTs Are There?
Anything can be NFT, as far as its present in the digital space. There are uncountable types of NFTs. The most common types of NFTs are listed below:
- Game Objects.
- Web 2 Databases.
How Do I Track My NFTs?
You can keep track and monitor your NFTs and all the transactions associated with it through Etherscan.io
Simply go to the website, and input your wallet address into the search bar. Click on the desired tokens you wish to see. Then choose the particular transaction hash (NFT) you want to view and verify it’s ‘status’ and ‘tokens transferred’ options.
If you want to check your NFT sales history, collection rankings, market data or more, we’d highly recommend you CryptoSlam.io
Are There Fake NFTs On OpenSea?
Yes. OpenSea is the largest NFT marketplace. You will find all the NFTs there. Most NFT traders claim that 80% of the NFTs developed through minting tools are fake.
We advise you to beware before investing in any NFT.
Can NFTs Be 3d Models?
If you have done your research about the NFT Marketplace and blockchain technology, you will that an NFT can be anything as far as it has a digital value. From photos to text to video sequences and 3D models, anything can be treated as an NFT.
Why Would Anyone Buy An NFT?
People buy NFTs to genuinely claim it and experience a satisfying sense of ownership over them. Rich classes such as established entrepreneurs, celebrities, and influencers buy it to keep up their appearances and attract their limited audience which comprises a bunch of powerful people.
What Are Hidden NFTs?
Hidden NFTs mean that you will need the creator’s permission to view the full resolution version of the digital asset. They publish a watermarked image that gives a slight idea of what the NFT is about and reveal the actual version only to the potential buyers.
Are NFTs A Fad?
NFTs are anything but a Fad. They are awesome opportunities for both artists to showcase their talent and abilities, as well as for entrepreneurs and influencers to use NFTs for investment purposes.
Can NFTs Be Screenshots?
Sure. You can take a picture or a screenshot of an NFT but that won’t give you the rights of ownership. As the word suggests, NFTs are unique and irreplaceable.
What Happens If You Screenshot An NFT?
Taking a screenshot doesn’t make you the owner of the NFT, and therefore, it makes no difference.
Taking a screenshot of an NFT is just like taking a screenshot of a dress or a watch you like while scrolling through your social media feed.
What Is Minting?
Minting is referred to the process of defining a digital currency and NFTs on the blockchain.
NFTs are usually bought from Ethereum. The procedure of minting comprises blockchain to store data that is unchangeable and tamper-proof and can later be used to track, sell and buy NFTs.
How To Get Started with NFTs?
Do you want to create an NFT for business purposes?
Do you want to create an NFT for fundraising?
Are you confused about how to get started?
We will walk you through the complete process, and explain you in simple words.
Step #1 Buy Cryptocurrency
The first step you need to do is buy some cryptocurrency.
Just like you need money to buy a chocolate or a dress, cryptocurrency is the digital currency you need to have to auction, sell or buy NFTs in the NFT marketplace.
You will find a variety of currencies on the blockchain platform. The most common form of currency used to deal with NFTs are Ethereum. So, we suggest you buy some of it.
However, you can go for different payment options as well. Plug-and-play NFT checkout for instance. This platform will enable you to buy NFTs using debit or credit cards.
If you already have some Ethereum in hand, you need to transfer them to your digital wallet which is then connected to your NFT account and allows you to make and receive payments on the NFT marketplace.
There are a plethora of digital wallets out there. We are listing down the most popular for your convenience.
- Math Wallet.
- Trust Wallet.
- Coinbase Wallet
While all these digital wallets are good to use, we highly recommend you Crypto.com DeFi Wallet. It has a user-friendly interface and can be used through both iOS and Android devices. Its convenient features allow users to share their NFTs on social media within a few clicks!
If you already have a digital wallet and know how to use it, then jump directly to step 4 because in the next 3 steps we will tell how to set up a digital wallet and buy ETH.
Step #2 Set Up Digital Wallet
Go to one of the digital wallet platforms mentioned above. For better understanding, we are using Metamask as an example.
Go to the Metamask website, and press the DOWNLOAD button on the top right side of your screen. You can use download the digital wallet through your smartphone or desktop. If you are using a desktop PC, we recommend you download the browser extension as well.
A popup form will appear which will ask you to confirm whether you’d like to ‘create a new wallet and seed phrase.’ Don’t get confused by the ‘seed phrase’ for now. It simply refers to the list of words that keeps the blockchain information.
Press yes and you are almost done. Now you just need to agree to the terms and conditions, set up your password and your account will be created.
Step #3 Fill Your Digital Wallet With Cryptocurrency
Time to put some money in your digital wallet. If you don’t already have Ethereum, press the buy button and click the option ‘Buy ETH with Wyre.’
You will be redirected to a screen where you can purchase Ethereum using Apple pay, debit card, or credit card. If you don’t have enough money, just leave this stage. Go to the NFT marketplace and check the exact amount you need to buy a particular NFT, and put that amount in your wallet.
See, we understand the process of setting up a wallet, connecting it to the NFT marketplace, and using it to auction, buy and sell NFTs is a bit challenging. But once you will do it, you will realize its no rocket science.
Advice: Be wary before buying Ethereum. The price of Ethereum fluctuates drastically! Don’t get scared. Just make sure to double-check the rate of Ethereum a couple of seconds before buying it.
Step #4 Connect Your Wallet to An NFT Marketplace
The next step is to link your wallet to one of the NFT platforms. There are myriads of NFT marketplaces out there. We have listed a few of them.
- Axie Marketplace.
- Larva Labs/CryptoPunks.
- NBA Top Shot Marketplace.
- Nifty Gateway.
All of these NFT marketplaces work in similar manner. All you have to do is open their website, and you will see an option saying ‘connect the wallet.’ Click on this option and click on ‘next.’ It will then ask you to agree to the terms and conditions, and confirm that you are 13+ and you will be done!
Step #5 Upload your NFT
Once your digital wallet is setup, and connected with NFT marketplaces, its time to buy and sell NFTs.
Tap on the button that says ‘create’ and you will be introduced to three options: single, one-off work, and ‘multiple sell.’ Click on the ‘single’ option. Here’s when you need to upload the JPEG, PNG, GIF, WEBP, MP4, MP3 or any text you want to turn into an NFT.
Be careful with the size of the file. It shouldn’t be more than 30 MB.
Press upload and you will see a preview of what your NFT post will look like to the potential buyers.
Step #6 Start Auction for Your NFT
There are three ways you can use to sell your NFTs.
The first one is ‘fixed price’ which gives you an option to sell your NFT instantly. A ‘buy now’ button will be added next to your NFT. Any potential buyer will simply click on it to purchase it.
The second option is called ‘unlimited auction’ in which potential buyers keep bidding different prices for your NFT and you choose the best one.
The third one is called ‘timed auction’ which is the same as ‘unlimited auction’ except that it comes with a time restriction.
Most NFT creators, especially the noobs, get stuck at setting a minimum price. Don’t set your NFT price too low or else you will get no profit. Rather, you will have to pay the fee from your pocket.
We recommend you to set a timed auction at 1 Ethereum which equals $4700 with a deadline of seven days.
When a buyer purchases your NFT, an ‘unlock once purchased’ option will appear on your screen. This is where you show the original version of your file to the buyer using a secured web page or download link.
Step #7 Insert A Description to Sell Your NFT
Imagine you have two products opened on your laptop screen. One has a detailed product description that describes all the features of the product and the benefits you will get from it, and the other has just its name on it.
Which one you are more likely to buy?
Of course, the one with the detailed product description!
You need to do the same thing for your NFTs.
There are thousands of artworks, illustrations, designs, and more on the NFT marketplace.
What makes your NFT so special? Why should and would someone buy your NFT?
Keep these two questions in mind before curating your product descriptions. They must hit your potential buyer’s pain point and persuade them to make a purchase.
Take sufficient time to produce a compelling product description. If you cant do it, we recommend hiring a professional copywriter.
After you are done with the title and description, you will be asked to select the percentage of royalties you wish to claim on any resale of your NFT.
Don’t set the percentage too high or your buyer will probably not resell it in the first place because they will be making less profit then.
The next option will ask you to insert details about your NFT’s properties.
Fill in all the necessary information and you will be done with Step #7!
Step #8 Pay the Listing Fee to Sell Your NFT
Here comes the final step!
To create, and sell your NFT in the NFT marketplace, you need to auction it and for that, the NFT marketplaces charge you a listing fee. For this, you need to click on the ‘create item’ option and an invitation will appear which will ask you to connect your wallet to pay the listing fee.
It’s best to have funds in your wallet so you can pay the listing fee. However, if you don’t have funds in your digital wallet, do not fret. Just simply select the wallet icon on the top right corner of your screen and a pop-up will appear which will ask you to add funds directly using your credit or debit card.
This step is easy but you need to be CAREFUL about a few things.
The listing fee is usually less in the beginning. As you proceed further, you will have to agree to a further fee to make your NFT available to more prospects. When the prospect will your NFT, you’ll have to pay a commission fee on the sale of your NFT with the addition of a transaction fee for the transfer of the money from the buyer’s wallet to your own.
We hope now you have a clear picture of how to get started with the NFTs.
The Future of NFTs
The NFT marketplace is expected to touch new skies in the upcoming years with more celebrities, entrepreneurs, and influencers investing in them. Experts believe that the NFT market will hit a whopping US$4.64 billion by the end of 2026.
Extatic Design provides impeccable NFT services. Our professional NFT graphic designers and illustrators create unique NFTs that help businesses rise above the noise amongst other NFT sellers and provide them an amazing opportunity to boost their net worth.
Visit our Digital Art Commission page for more details.