NFTs: Understanding the why and the how
Whether they become widely adopted or not — NFTs represent an exciting point of view on digital ownership that has shaken our ground.
Whether they become widely adopted or not — NFTs represent an exciting point of view on digital ownership that has shaken the ground we walk on.
Since the dawn of time, humanity has felt a certain allure to owning physical things. And it was always about real-life qualities these objects carried — be it emotional, societal, or financial.
The concept of digital ownership has seen new frontiers with the emergence of NFTs (non-fungible tokens). But with every innovation, there come early adopters and critics, so here are a few basic concepts about NFTs so you can make an informed decision and choose a standpoint.
What are NFTs?
NFTs represent unique digital assets, products or work created and (initially) owned by the person responsible for their formation.
NFTs leverage blockchain technology to provide proof of ownership and authenticity for these digital assets. Each NFT is easily traceable and verifiable, making it impossible to duplicate or counterfeit without leaving a trace. This starkly contrasts today’s web platforms, where ownership and control of digital content are often ambiguous.
Your NFTs can be yours alone, or you can share them, gift them, airdrop them, or sell them at an online marketplace. A myriad of options. As they can live permanently on the blockchain network, there are no due dates, renewals, cancellation policies, or other third-party interferences.
Ways to use NFTs
NFTs do not only embody current hypes of digital art that happened to be sold for insane amounts of money. But these are the use cases we hear most about. The possibilities of using NFTs are limitless, and to name just a few:
👉 Digital art
One of the most popular uses of NFTs is in the world of digital art. Artists can create and sell digital artworks as NFTs, providing buyers with proof of ownership and authenticity. This has opened up new opportunities for digital artists to monetize their work without intermediaries and reach a wider audience.
👉 Collectibles
NFTs have also become popular in the world of digital collectibles. From virtual trading cards to virtual real estate, NFTs allow collectors to own and trade unique digital items. This has led to the rise of digital marketplaces where users can buy, sell, and trade NFT collectibles.
👉 Music
From musicians and producers to event organizers — anyone can use NFT collections to monetize their work by directly selling or streaming songs, avoiding the need for a costly middleman. They can still earn royalties, offer unique bonuses to their fans, create valuable memorabilia or sell NFT tickets for concerts or events.
👉 Gaming
In the gaming industry, NFTs create unique in-game assets, such as rare items or special skins. Players can buy, sell, and trade these items, giving them ownership and control over their digital possessions. NFTs could revolutionize the gaming industry by providing players actual ownership of their in-game assets.
👉 Tokenizing real-world assets
Beyond the digital realm, NFTs can also be used to tokenize real-world assets such as tangible real estate, artwork, or intellectual property. The digital representation of these assets as NFTs on a blockchain allows ownership to be easily transferred and verified, opening up new possibilities for fractional ownership and investment.
What makes an NFT valuable?
Overall, the value of an NFT is determined by a combination of factors. The most contributing ones include scarcity, authenticity, demand, creator’s reputation, utility, and additional benefits such as licensing and royalties.
👉 Scarcity: The more limited copies or editions of a particular NFT are, the more valuable they are.
👉 Authenticity: Blockchain tech ensures the authenticity and traceable provenance that add to NFT’s value, especially in digital art and collectibles.
👉 Demand: The creator's popularity, the content's uniqueness, and current market trends can drive up demand and increase the value of an NFT.
👉 Creator’s reputation: The reputation and prominence of the creator can significantly impact its value. Established artists or well-known figures in the digital art world may command higher prices for their NFTs.
👉 Utility: If an NFT grants access to exclusive content, virtual experiences, or real-world perks, it adds value beyond mere ownership.
👉 Licensing and royalties: Licensing rights or royalties for the original creator can add value as they provide ongoing revenue streams beyond the initial sale.
Where to buy and sell NFTs?
Buying NFTs…
Your journey starts at a growing number of online NFT marketplaces, where there are infinite possibilities and offerings to buy NFTs. Each marketplace is designed to cater specifically to the needs of the most avid NFT fans as they offer neutral ground for NFT trading between two parties.
Most marketplaces possess similar mechanics: you can buy your NFTs on an auction sale or at a fixed price, just like every other good in every other peer-to-peer marketplace.
They mainly differ in the type of NFTs they hold, the fees they charge, compatibility with different blockchains, and, of course, the fine-tuning of the purchase process and user experience.
…and selling NFTs
One of the two main approaches to selling NFTs includes minting your brand-new NFT from scratch. Minting stands for transforming a digital item into a token on the blockchain. This scenario involves generating NFT artwork, so it should be easy with the help of all the AI-connected tools. You can also use your physical art pieces, provide them with a digital context, and voilà.
Out of ideas? Check out this perfection of a guide 👇
The other option is reselling an NFT you’ve already purchased, which currently sits in your digital wallet. If it no longer sparks joy, or you have decided you can earn money with it — no matter the inclination, you just list your NFTs on the marketplace and start selling the art.
However, making money through selling NFTs can be tied not only to earning a certain amount of cash for the sole purchase, but you can also get some passive income. Setting up royalties is a way to achieve continuous pay-flow for your work. Royalties are fees paid to the NFT creator as a token of appreciation for using their original property. It still means that NFT ownership will transfer to the next person buying it, but every time “your” NFT resells, you, as a creator, will get a commission. Not bad, right?
The three most popular NFT marketplaces are:
👉 OpenSea: One of the largest and most popular decentralized NFT marketplaces. It supports a wide range of digital assets: art, collectibles, domain names, and virtual worlds.
👉 Rarible: A decentralized NFT marketplace where users can create, buy, and sell digital assets. It also features a governance token (RARI) that allows users to participate in the platform’s decision-making process.
👉 Binance NFT marketplace: One of the world’s largest cryptocurrency exchanges with its own NFT marketplace. It prides itself on the seamless user experience, especially suitable for those just starting their NFT voyage.
You must further research and find a marketplace that will offer you the best features you feel you need.
NFT DIY
NFTs allow individuals to truly own and control their digital assets, paving the way for a more equitable and decentralized digital economy in the era of Web3. As the technology continues to evolve, we can expect to see even more creative and innovative uses for NFTs in the future.
And why should you create your own NFT? Because with Apillon, it’s not about the process, it’s about the outcome. Let’s be honest — the process is so quick and easy that it’s not even worth mentioning. 😉
Don’t get discouraged — making or owning a first NFT will soon feel like buying our first PC. It started out weird, scary, and sailing in uncharted territory, but we cannot live without it ever since.
⧓ About Apillon
The Apillon platform serves as a unified gateway to the Web3 services provided by linked Polkadot parachains. Following the multi-chain vision, Apillon powers the transition of developers to Web3, simplifying its adoption in the real economy, and expanding its versatility as the ecosystem grows. With Apillon, Web3 services are within reach for every developer, regardless of their background and experience with blockchain technology.