NFTs have been in the limelight for quite some time now. With daily increasing knowledge about blockchain technology and growing popularity for virtual assets, we get introduced to new terms such as NFTs and Metaverse.
So first let us know what’s the term NFT (Non-Fungible Token)
Let’s split the term “Non-Fungible Token” and try to understand what basically it is.
“Non-Fungible” means it’s a unique, non-interchangeable unit hence they are not fungible. This makes them a different type of asset. It basically reflects ownership and no copyright issues due to blockchain.
The term “Token” is the term used in cryptocurrencies besides Bitcoin, Ethereum, etc even though they are technically token. These digital items that can be bought and sold using the blockchain technology. Anyone can create or mint it. It can be traded on any of the blockchain of Ethereum, Solana, Flow, etc. Let’s take a view on blockchain technology.
Blockchain- Technology of Future
A unique unit of data employing technology that allows digital content to become logged and authenticated on blockchain. It unites the openness of the internet and the security of cryptography. Blockchain are typically managed by a peer-to-peer network to store information and It’s virtually impossible to add, modify or delete the data in the transaction. While world is getting used to the technology, people get quickly embraced in it. India’s first blockchain wedding “Pune couples tie knot with NFT vows in the presence of a digital priest.” As its stated by finance minister Nirmala Sitharaman in the budget 2022 that “digital rupee will be issued using blockchain & other technologies by RBI starting 2022-23.”
Types of NFT’S
There are different categories for NFT’S
· Art NFT
· Music NFT
· Memes NFT
· Sports NFT
· Fashion NFT
· Video games NFT
As new technological advancements and developments emerge, leading to fresh application and utility, the list of NFT’s will surely grow.
How to buy/sell NFT’S?
First you have to purchase some cryptocurrency like Ethereum, Solana, Polygon, depending on which blockchain you have to trade. Cryptos can be bought on platforms like Kuber, CoinDCX, CoinSwitch. To store NFT’S you should have a digital wallet. There are different types of wallets if one is interested only in Ethereum, one can use MetaMask (interacts only with Ethereum blockchain). Create an account on the NFT market like Opensea. After login to Opensea, using metamask or another digital wallet you can start buying/selling NFT. It’s upon you which blockchain (Ethereum, Polygon) and platform (Opensea is the most popular platform and Rarible is an option) you have to trade NFT. While selling, fill in the details, description price, image etc.
You can use lazy minting on Opensea to mint free NFT’s without paying gas.
What is gas fees?
Users have to pay for the use of resources to execute transactions on the blockchain. Fee that you have to pay for the transaction is known as the gas fee.
Factors to look at before buying NFT’s?
Find your needs, you can’t buy everything. You can but it’s of no use. Start analyzing how and why NFT is rare. Lesser is better, find NFT’s which have less collection. As community matters, projects with an active community would mean higher trading volumes and interest. Verify the background of the team and what they have built previously. For news related to NFT’S you can use Techcrunch, Cointelegraph, and Mashable. We have different types of tools to find NFT’s like Rarity.tools, Opensea, Coinmarketcap, Icy tools, Nft bank, etc.
How can we find free NFT’s?
To get free NFT’s, you have to join different discord groups to get an airdrop.
The main aim of these groups is to communicate with the users instantly. As it creates a differentiation from other social apps, users can create different channels depending on the topic they wish to talk about. It can be private and users may invite whoever they want, or they can be public so any user can join. While some servers and channels in the discord have been dedicated to NFT and Cryptocurrencies. NFT communities discord servers have different attributes; some are perfect for investors, others are great for developers and artists, some are nft project specific. An airdrop is a promotional activity typically performed for marketing and project promotion. You can join any group, claim the airdrop and withdraw it. Some airdrops are not safe so be sure to you avoid scams.
Most expensive, company & Indian NFT’s?
As NFT’s continue to become more widespread, let’s explore the most expensive NFT’s that have ever sold. The most expensive artwork sold till date is “The Merge: US$91.8 million”. The merger is a unique digital artwork in the world of the NFT’s because, instead of being a single piece of work, the merge is what can be called fragmented art. Bollywood superstar Amitabh Bachchan has sold his collection of NFTs for USD 9,66,000 (RS 7.18 crore approx.) in an auction hosted by Beyondlife club. As Sunny Leone has become the first Indian actress to sell and mint NFT’s. Not just this, all the companies across the world are lining up for NFTs. Nike and Adidas both have announced their entrances in NFT’s space as of December 2021. Adidas has partnered with Gmoney, Punks Comic & BAYC, while Nike has acquired RTFKT. Many companies are focusing on the products for the metaverse.
What is metaverse?
Metaverse is a virtual reality space with different types of elements related to technology, including video and augmented reality where users “live” within a digital universe. It creates a “virtual world” experience by imitation of human emotions & gestures. Where currency can be used to buy and sell land, buildings, avatars, identities, etc. individuals can walk around with friends, travel and also attend events in such environments. Metaverses, on other hand, aren’t just for gamers. It allows us to meet up, collaborate, shop for goods and services, and participate in activities like live events, live concerts and among others. We will deep dive on “metaverse” in our upcoming article.
Plagiarized or Fake NFT’s
As mentioned above about Opensea tool lazy minting, it is to encourage more artists to mint NFT’s. However, more than 80% of NFT’s created with the tool were found to be fake or plagiarised NFT’s. The platform which sold NFT of Jack Dorsey’s first tweet for $2.9 million has stopped most of the transactions, because people were selling tokens of the content that did not belong to them. Also, users have started minting and minting, unauthorized copies of other NFTs and sets of NFTs which resemble a security. Its “fundamental problem” in the fastest growing digital assets market.
As above, we got to know about NFT’s. While reading this article we have gone through different terms related to NFT’s. As recent announcement made by finance minister Nirmala Sitharaman in the budget 2022 that “All digital assets will be charged 30% tax”. It created impact on users who trade in Cryptocurrency or NFT’s. You should start considering the tax applied on the digital assets. Before adding NFT’s or any digital assets you should consider professionals. Investing without knowledge is dumb investment. This article is only for learning perspective, do your own research and invest.
Happy learning & earning!
I am a third year finance student curious to know more about financial market. I love to read, write and learn new things. With learning and experience the blogs and newsletter we write tend to spread good insights among the readers.
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