Non-fungible tokens (NFTs) are a digital asset that connects ownership to unique physical or digital items, such as works of art, real estate, music, or videos.
Most of the current conversation surrounding NFTs is about them as an evolution of fine art collecting, only with digital art. Non-fungible means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. Most NFTs are part of the Ethereum blockchain, which is a cryptocurrency, like bitcoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from bitcoin. NFTs are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). To put it in terms of physical art collecting: anyone can buy a Monet print. But only one person can own the original. The first digital art piece which was sold as an NFT was a Beeple image auctioned off for $69 million, which is $15 million more than Monet’s painting Nymphéas sold for in 2014.
NFTs are typically used to buy and sell digital artwork and can take the form of GIFs, tweets, virtual trading cards, images of physical objects, video game skins, virtual real estate and more. However, technically anything digital can be sold as an NFT, there are several marketplaces which allow people to buy and sell. These include, but are not limited to:
- OpenSea – one of the first and largest marketplaces where you can find NFTs for a wide-range of collectibles
- Rarible – offers a range of NFTs with an emphasis on art. Uses its own RARI token to reward members
- Nifty Gateway – an art-focused marketplace that works with big-name brands, athletes, and creators
- Foundation – a community-curated marketplace that requires creators to be invited by other creators who are already part of the platform
- SuperRare – A marketplace that focuses on curating and offering digital art.
Dependent on platform the process can vary – you essentially upload your content to a marketplace then follow the instructions to turn it into an NFT – this process is called minting. You’ll be able to include specifics such as a description of the work and suggested pricing. Anyone can create an NFT – all that’s needed is a digital wallet, a small purchase of ethereum and a connection to an NFT marketplace where you’ll be able to upload and turn the content into an NFT or crypto art.
Large companies, like Marvel, have launched their own NFTs, which seem to be aimed at more traditional collectors, rather than crypto-enthusiasts. NFTs do seem to have, at least to some extent, shown some staying power even outside of the cryptosphere. For brands specifically, NFTs hold the possibility to offer a whole new set of experiences to their customers, to build their communities in new ways, and to increase brand awareness and loyalty. While NFTs may not lead to immediate return on investment, they can play an important part in supporting all the other efforts that are aimed at generating conversions and sales. NFTs have gathered a whole community around them that is strongly centred around mutual respect, authenticity, and support for artists. Brands that see tokens simply as an opportunity to diversify their marketing strategy but without recognition for artists or the ethics in the community are at risk of being ignored or criticised.
You can buy, sell, trade, and create NFTs from online exchanges or marketplaces. The creator or current owner may choose a specific price. Or, there may be an auction, and you’ll have to bid on the NFT.
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