If you are on the bend on entering into NFT (Non-Fungible Token) space, chances are you already hold one or more cryptocurrency. However, not all cryptos are link with NFTs and not all blockchain network supports NFT art. You are set and ready to start though if you have Ethereum, Solana and Polygon because these are the three big networks compatible with NFT.
Anyone new to Non-Fungible Tokens (NFTs) can be confused on how NFT work. Is it an artwork, another crypto, a trading card…? The short answer is NFTs (Non-Fungible Tokens) are non replaceable collectibles in the blockchain, most notably on Ethereum and Solana network, and may be associated with digital files such as photos, videos, and audio. In contrast, Bitcoin is fungible and tradeable with the same exact coin.
NFTs are also capped at a certain number of units, with each unit a unique and distinctive trait.. They’re like stocks, but they can’t be traded with each other, and they also have a clear value, preferably a monetary value if the creator or owner wishes to sell the NFT. Some NFTs can be given or transferred into your wallet free of charge also if the creator or owner initiate it. Thus simply put, if you own an NFT, then you are a collector.
This short article is going to show you how NFTs operates and gives you a general knowledge of its ecosytem. It will also explore some ways that developers can use them in games, staking, breeding and other functionalities of the project. Hopefully by the end of this article, NFT won’t be a confusing idea anymore and will interest you to learn more about them.
Non-Fungible Tokens in a nutshell
NFTs are crypto-assets that are capped at a certain number of units, with each unit a unique and distinctive trait. A character on an NFT could be an animal, a personified object, an alien, a mutant, a concrete object or an imaginary one, the possibilities are endless. One NFT is different from another, from background to the physical traits and personalites, each NFT has a sole identity of its own. Also when you buy an NFT, you become the full owner of it and can do anything with it that an owner could do, including changing the owner.
Some examples of NFTs are CryptoPunks, BAYC (Bored Ape Yatch Club), MAYC (Mutant Ape Yatch Club) and thousand others in the blockchain. NFTs can operate on Ethereum, Solana and Polygon network, just to name the most prominent ones.
NFTs in Games, Staking and Breeding
One of the main utilities of NFTs is that it can be integrated in a game. In fact, many developers have a game in mind already when they are creating the NFTs, and vise versa, there are also NFTs who originated from a video game. In fact, many branded products are creating their own NFT collection nowadays, just look at Adidas.
While collecting NFT for its art is just one facet of owning, an NFT could also be used for staking, Each NFT project with token feature has its own specialized token. When you stake your NFT, it earns tokens which can be use for a variety of purpose i.e. for buying merchandise, acquiring internal gaming or character feature, breeding function and more.
Minting, Buying and Selling
So now you are ready to buy your first NFT, how do you do it? DYOR (Do Your Own Research), after doing this step, head over to the NFT project website and “mint” your NFT. Mint is basically purchasing an NFT from the original NFT collection on the website. In order to mint, buy or sell, you would need a digital wallet and load it with crypto, particularly Ethereum or Solana. Examples of $ETH wallet are Metamask and Coinbase, and Phantom and Solflare for $SOL.
For those who are not able to mint, don’t worry because you can still buy an NFT on a secondary marketplace like Opensea for Ethereum and Polygon projects and Magic Eden for Solana NFT projects. NFTs can also be sold on these marketplaces.
New minters, buyers and sellers should also know that these transactions involve gas fees. Gas fees are measured by “gwei” and can vary depending on many factors, but can be primarily rooted on the supply and demand between network’s miners. Gas fees can be a deciding factor in the NFT space; low gas fees will encourage a minter, buyer and seller to go ahead with the transaction, conversely, high gas fees is an obvious deterrent.
NFT collecting is more than just admiring the artwork. A collector has to look at it on an investment perspective too, just like he or she would check and research his or her stocks and cypto holdings. Choosing the right and succesful NFT project can be profitable in the long run, or in the short run in case of NFT flippers. At any case, one should treat their NFT as an investable asset.
Thanks for reading.