One of the terms that almost always find a place in blockchain discussions is NFTs. We hear news NFT sales are worth billions of dollars and their market is growing by more than 300% in a year.
Read on to know more about what is NFTs are and how their trading work?
What are NFTs?
NFTs are short for non-fungible tokens. Let’s break this down further. Non-fungible means everything is unique and cannot be traded for another. The term token here refers to their digital assets that are protected through blockchain technology.
One of the most common forms of non-fungible tokens today is digital artwork. But it could be much more than just this. It could be songs, tweets, videos, memes, sports cards, music, and more.
So, when you buy an NFT, you are considered as an owner of this digital product. Something similar to owning a one-of-a-kind painting or music record.
How are NFTs different from cryptocurrency?
Many of us wonder about the difference between NFTs and cryptocurrency. Cryptocurrency or digital currency is the one that is secured by cryptography. Most of the digital currencies are based on blockchain technology. They are not issued by any central authority and their trading is free from the interference of any intermediary or a third party.
Both NFTs and cryptocurrency are based on a blockchain using the same principles and technology. They are often considered to be a subset of crypto and you need crypto to buy and sell NFTs.
The major difference lies in their name. Cryptocurrency is a currency and like any other currency, it has is fungible. This means that no matter which cryptocurrency you have, it has the same value as the next one.
Most NFTs are Ethereum-based tokens and can be bought or sold only with Ether (ETH). Recently, Dogecoin, one of the most well-known meme coins has made major progress in NFT trading. NFT minting capabilities have just been added to the Dogecoin blockchain. To trade in NFTs, get to know the DOGE price and conversion rates (Dogecoin to INR).
What is The Purpose of NFTs?
The primary purpose of NFTs is to allow artists to sell directly to their patrons without the interference of middlemen. This is just like going to the older ways where communities support the artists and the work that they enjoy. This not just has great economic value but also societal and cultural.
NFT trading also allows art creators to continue to earn royalties when their piece is resold. This is not possible in the case of a physical piece of art.
How Does NFT Minting Work?
Here is how you can go about minting NFTs:
Step 1: Open a crypto wallet and connect to an NFT marketplace. Use the ‘create’ button to make your profile. You can download the wallet using a QR code or download it on your wallet.
Step 2: Use the ‘create’ tab to upload your digital file and name it. You can also add an external link and a description.
Step 3: Fund your wallet to sell the NFT. Make sure to purchase some ETH and deposit it into your wallet.
Step 4: List your NFT for sale in the open market along with the price details. You now need to manage your NFT business. You can create more NFTs and interact with their users directly. NFTs created on one marketplace can be transferred and sold through different marketplaces.
The online digital art creator community has adapted to NFTs. It has proved to be a real game-changer for them. There is direct artist-consumer interaction, and more original art is created. Eventually, this will create a larger cultural movement. Refer to platforms like Coinswitch to stay updated on the latest happenings in the NFT markets.