What is NFT and How is Such Technology Used?
In early 2018, CryptoKitties, an innovation-driven product, became one of the first NFT projects to grab the attention of the crypto community. This original game was developed using a non-fungible token. Any NFT is a non-interchangeable unit of data. The new game became very popular in a short time and sold for $172,000. Since then, the non-fungible token industry has grown unimaginably. The most common NFT exchange, OpenSea, has sold over $10 000 000 0000 of non-convertible tokens since its inception.
With the growth of NFT, it is possible that ordinary users create their own projects and get profit from such activity. Thousands of enthusiasts in the gaming, video, and music production industries have taken an interest in this concept and how NFT technology works. Of course, any activity of such people can affect the growth of the market. Most enthusiasts do not need technical skills to take the first step. People can use the non-interchangeable tokens in the following areas:
- Digital arts and images creating
- Music production
- Gaming equipment creating
- Clearance sale of collectible sets
Any NFT ecosystem works well if people take steps to prevent scarcity and establish ownership of digital assets. Of course, this technology provides users with additional monetization opportunities. With NFT tools, it is easy and safe to sell content. Thousands of people use non-fungible tokens in various industries and they are definitely not disappointed.
Is it Possible to Run NFTs Without Coding?
If people want their own NFT, they don’t need to understand programming procedures. It turns out that dozens of platforms offer interfaces that allow enthusiasts to create such tokens as quickly and easily as possible. The leading ecosystems for building NFTs are OpenSea and Rarible. With such platforms, people can create chains without any technical knowledge of the blockchain. However, every enthusiast should consider the following features of NFT tokens:
|It is based on Ethereum||Most NFT products are built on this type of blockchain. Although, after congestion, new projects were launched on alternative platforms. The main disadvantage of Ethereum is the high cost of transactions and fees.|
|Deficiency||To keep the value of the NFT, the number of coins must be severely limited. This means that a small number of rare and most popular tokens can be used for transactions.|
|Indivisibility||If people can send 0.05 Bitcoin, then they cannot do the same with a 5% NFT token.|
|Authenticity guarantee||With NFT, each user can track the authenticity of an asset and see information about the owners.|
Even taking into account the peculiarities of NFT, this blockchain technology is considered promising. Thousands of enthusiasts have made a fortune with this innovative payment gateway. For example, the same collector spends $69 300 000 on art by Mike Winkelmann. The clearance sale was carried out by Christie’s digital platform. Beeple’s Everydays is a collage of 5K images that relate to each day for the past 13+ years. You can check live statistics of OpenSea, Rarible, or ICOn holder resources to make sure the technology is promising.
Step by Step Guide
According to many experts, NFT tokens can affect the growth dynamics of the creative industry that foundered due to the Coronavirus pandemic. This means that the interest in this innovative technology is associated not only with making money on the rush of demand and fluctuations in the exchange rate. To understand how the NFT works, you should read the guide below in detail. Let’s jump in!
Step 1 — Creation of a Unique Product & Establishment of Legal Ownership
The first thing you should do before creating new chains is to identify the unique idea that you want to convert. People can use a meme, GIF image, or other products. While this may seem obvious, they need to make sure they own the property rights. The NFT system adheres to very strict requirements in this regard. This innovative tool is often used to secure rights to a unique product, including digitized artwork or artifacts in video games.
Step 2 — Choosing a Platform for Issuing Coins
NFT blockchain contains a unique product ID. The InterPlanetary File System (IPFS), which is dispersed in different countries over many computers, is most often used to store metadata. But this is not an uncontested solution. To find an alternative platform, newbies will have to do market research. Enthusiasts who want to try how NFT chains work can choose one of the following solutions::
- Open sea
Registration on most listed resources is free. As a rule, there are no restrictions on the content that can be put up for sale. But in order to make payments, you will have to acquire a crypto wallet.
Step 4 — Selling a Digital Asset
You can turn your digital artwork into a non-transferable token that you can sell using site-specific instructions. Beginners should consider that it’s not possible to change, delete or edit any asset that is built on the blockchain. After October 2021, most platforms do not charge developers to release NFTs at the time they are created. As far as auctions are concerned, the margin and specificity of sales may vary. Depending on the digital platform used, people can choose the following:
- Fixed Price: This is the most preferred type of NFT auction. Setting a fixed price, people can sell digital products on a first-come, first-served basis.
- Forward Auction: In this case, the market will accept bids from potential buyers within a specified period of time. If people prefer this one, they will have to decide on a reserve asset. Users must set the royalty rate so that they can receive payments indefinitely, that is, for each subsequent resale of this NFT. In addition, you should determine how long the auction will last. Users must factor in the fees when setting the reserve asset, they will receive a percentage of the commission. If the price is too low, digital product owners risk losing money as a result of the sale.
- Perpetual auction: No time limit. Users can end the auction in 1 click. This is the best solution for such blockchains as Binance Smart Chain, Polkadot, Tron, Tezos, for which the exchange rate is very unstable.
The NFT release process is almost instantaneous. With non-interchangeable tools, people can sell any type of digital asset, from art to music or e-tickets to live concerts. Once you have chosen the specific idea you want to implement, you should open an account on NFT exchanges like OpenSea or Rarible in order to spend and sell NFTs. But this will not be a challenge since these platforms are offered a user-friendly interface.