Introduction and Guide to NFTs
Introduction to NFTs (Non Fungible Tokens)
Whether you are new to the world of cryptocurrency and blockchain or a time-served veteran, there’s a good chance you are still a novice when it comes to the exciting new digital assets known as NFTs or non-fungible tokens. If you have been wondering what all the fuss is about or how you can get involved in this rapidly growing technology and the huge amounts of money being injected into the space. Then this is the guide for you.
Even if you consider yourself a leading expert in non-fungible tokens, you can still find value and interest within this comprehensive guide. Discover where NFTs all began, how far they’ve come, and what the future might have in store for this new asset class. We’ll also take a detailed look at the best projects and creative minds, the amazing content being produced, and the bullish collectors paying impressive sums of money to accumulate the hottest NFTs. As well as getting you up and running by showing you step-by-step how to set up your digital wallet right through to purchasing your first NFT.
As some of the biggest fans of non-fungible tokens, we have created this guide to help both newcomers and experts alike find their feet in this scene. Join us as we dive deep into the exciting world of digital collectables and the pioneers leading the charge.
What is a non-fungible Token?
NFTs or non-fungible tokens are a type of digital protocol that is cryptographically unique, making them immune to duplication, or forgeries. Because the owner is truly the only party with access to the token, they are also uncensorable and much more secure. They are therefore the perfect vessel to authenticate and provide proof of ownership of real-world items in the digital world we live in today. This is made possible by utilizing blockchain technology, more specifically the Ethereum Blockchain. NFTs are created by writing smart contracts (21stC Coding) The same type of technology that institutions have been piling millions into recently via Bitcoin. These digital tokens are being used right now to represent fine wine, trading cards, domain names, artwork, virtual real estate, and much more.
A Brief History of NFTs
Prior to the ERC721 token standard being established, NFTs as an idea were already around, in fact, several of these ideas were developed into working NFT’s, such as ‘Colored Coins’ a system that uses Bitcoin to represent a variety of assets, or ‘Counterparty’ a platform that allowed users to create assets on the Bitcoin blockchain and trade them using a built-in decentralized marketplace. However there was no universally adopted standard and the community was fragmented, so these projects and others like them, seem to grow to a certain point but then become stagnant or decline. Fast forward a couple of years and with the adoption of Ethereum and its ERC or ‘Ethereum Token Standard’, projects began to start developing digital collectables on its blockchain. This is where we see for the first time, recognizable names such as Cryptopunks, 10,000 uniquely generated avatars, and Cryptokitties, the collectable virtual pets that crashed Ethereum and made the news around the world.
As the communities of these projects began to grow, a number of decentralized marketplaces were created to give collectors a way to trade these digital collectables, but most failed to attract the numbers need to survive. OpenSea, was not one of them. By far the biggest marketplace for digital collectables, and our recommendation is if you want to Trade NFT.
With this new universally accepted and more efficient way of doing things, NFTs have been able to flourish in the past couple of years and no-fungible tokens now represent a wide variety of assets such as Art, Fine Wine, Virtual Land, and Trading Cards to name a few. With the current record for a non-fungible token-based art collection stands at $202,000 or 302 ETH. The collection of artwork on the legendary Batman was created and sold by DC comic artist José Delbo and Trevor Jones, a crypto artist. Genesis, the highest performing single piece achieved $113,000 worth of ETH. With thousands of dollars in ETH changing hands every day in smaller transactions, worldwide it is now believed that over $130 million in NFTs have been traded since 2017. NFTs still have a long way to go before they become mainstream but as you can see, they are already big business.
How do to get Involved in the world of NFTs?
In order to start buying and selling NFTs, you are going to need a couple of things, some Eth, Ethereum’s native currency, and an ERC721-compatible web wallet. You can easily buy Eth via ‘Coinbase’, one of the world’s biggest cryptocurrency marketplaces. As for the wallet, I highly recommend ‘MetaMask’, it’s probably the most established web-based Ethereum wallet, and is pretty much the default wallet for projects within the space. It’s safe and super easy to set up and use.
However, as with every cryptocurrency wallet, the most important thing to remember is to follow the tried and tested method of backing up your ‘Recovery Phrase’, store offline in a location accessible only to yourself, and never share it with anybody. This recovery phrase is the sole way to recover your funds should you lose your laptop or forget your password. Once you have your wallet set up and funded with Ethereum. You’re ready to start buying and selling NFTs. It’s now just a case of heading to your chosen marketplace and signing in with your Metamask wallet, you are now ready to make an offer on your favourite digital collectable.
Video: Introduction to NFTs by Gary Vee
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