Image Source: Black Jack 3D
Image Source: Black Jack 3D

Non-Fungible Tokens (NFTs): All You Need To Know
Article by: Hannah Parker

Bitcoin and Ethereum are the most popular and dominating digital coins in the metaverse. However, they are not the only digital currencies with value. Non-fungible tokens, commonly referred to as NFTs, profoundly impact different markets and industries. These tokens also play a significant role in the digital economy as they have economic and non-economic value.

Image Source: Black Jack 3D
Image Source: Black Jack 3D

What are NFTs?

Non-fungible tokens are blockchain-based tokens or individual tokens with valuable information and unique assets like pieces of art, digital content, or media. In simpler terms, NFTs are essentially physical collector items that are digital. So, through an NFT, instead of an individual purchasing a physical piece of art, they would attain an original but digital version of the artwork along with exclusive ownership rights. NFTs also serve as a network of assets that can be presented and traded. The artists behind these digital assets can then sell their creations on crypto exchange platforms such as Ethereum, where they can convert their art into digital tokens and receive royalties automatically every time the art is re-sold. The tokens could also be used to take out a loan. 

Why are NFTs important?

Non-Fungible Tokens are among the most incredible creations of the century, as selling these tokens led to the emergence of various digital platforms that did not exist before. These platforms opened new avenues for artists, creators, and developers to sell and trade their creative assets in digital and physical formats. NFTs create vast and steady economic opportunities for artists, content creators, collectors, and publishers across the globe. More digital assets are sold or traded through these new and emerging platforms.

NFT technology has also enabled the collection of other digital objects and physical assets, including sports collectables, plots of land, and clothing. The emergence of NFTs has helped artists, creators, developers, and collectors to easily tokenise and monetise their works. How? NFTs are based on blockchains, a digital ledger of transactions duplicated and distributed across the entire network of computer systems on the blockchain. Blockchains are also a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. These digital blockchains mean that NFTs can connect artists with audiences or for identity management by removing intermediaries and having creators deal directly with customers, suppliers, or potential investors. The removal of intermediaries is cost-effective, leading to NFT sellers being able to enjoy the full benefits of their work. Moreover, NFT technology allows for swift and simplified transactions, the emergence of new markets, and enables artists and collectors to attain more profits from the sales of their works.

NFTs block the selling of counterfeit goods

Fraud is an ongoing crisis in our world due to large quantities of counterfeit goods, including clothing and art, being sold and passed off as legitimate. This has negatively affected numerous high-value brand names’ finances, reputations, and legitimacy. 

As mentioned, NFTs are created on a blockchain — a permanent digital ledger. Each token is uniquely designed and irreplaceable; no token is the same. Every NFT serves as a digital representation of a digital asset or collectable being sold. Each token contains a unique, non-transferable identity to distinguish it from others. The blockchain technology used by NFTs thus enables accurate and irrefutable records of the origin, authenticity, and owner of every digital asset sold, further allowing creators to benefit more from their works and blocking the selling of counterfeit goods.

The value of NFTs

In the first half of 2020, NFT sales generated an estimated $13.7 million; a year later, over $2.5 billion was generated within the same period. In 2021 again, a group of NFTs by digital artist Beeple sold for over $69 million. The sale set a precedent, and a record for the most expensive pieces of digital art sold thus far. The artwork was a collage comprised of Beeple’s first 5,000 days of work. To show just how marketable NFTs are, Jack Dorsey, the founder of Twitter, posted his first tweet where he wrote, “just setting up my twttr.” This became the first-ever NFT version of a tweet, as it sold for $2.9 million.

It is clear that NFTs have created platforms and more emerging markets to create income. NFTs are not limited to digital art or real estate but clothing too. The market also supports NFT fashion products, such as the recently sold digital jacket by RTFKT for $125,000. An NFT version of the New York Times column also recently sold for $560,000. According to a report by PwC, it was mentioned that blockchain technology is expected to add $1.76 trillion to the global economy, and NFTs will account for a larger share of that capital. NFTs are expanding the markets rigidly rooted around digital art pieces, sports cards, and rarities and creating room for more platforms that can accommodate different creations, provided they are valuable. It is thus evident that this rapidly growing market for NFTs is beneficial to artists and creates room for more opportunities for income across different industries, inherently leading to economic growth. Bitcoin 360 AI, a credible trading platform and news site, shares more information on how to sell NFTs, including in-depth guides on where to buy NFTs.

How to buy NFTs

Most NFT collectables are Ethereum-based. To buy the tokens, one would need to purchase Ethereum. To buy ETH, individuals need to have an account with a cryptocurrency exchange, where they’ll then send and store their crypto in a digital wallet. From thereon, one can connect their digital wallet to popular NFT marketplace platforms such as Opensea, Nifty Gateway, and and proceed to buy and process their NFT. 

Over the years, many creators, especially those still up and coming within their fields, have struggled to sell their artworks or bring their ideas to life as agents and intermediaries were needed to access and reach specific platforms. However, the narrative has changed, thanks to ever-evolving technology and innovations. Through NFTs and blockchain technology, artists and creators at large now have the platform to sell their creations directly to a vast audience. Moreover, there is inclusive economic growth due to the massive influx of income from the digital and creative industries. Cryptocurrency is changing the narrative for global economies and industries, especially for the underprivileged who previously had limited opportunities.