Non-Fungible Tokens Guide. How do nfts work?

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If you’ve read anything about cryptocurrency or Bitcoin, you may have heard of Non-Fungible Tokens (NFT). NFTs are tokens built on a blockchain such as Ethereum that verify guaranteed ownership of unique digital assets.

A copyright is a legal right that lets you create original work and profit from it. It’s related to owning creative rights for physical products, but in this case, the creative work is digital.

For instance, if you were to buy an original painting created by an acclaimed artist, you would receive a certificate of authenticity to prove that it is real and likely a receipt for the purchase.

If any copies are made of the original, they’ll be mere copies and lesser in value. Non-fungible tokens work almost identical to physical items, with the only difference being that they are digital.

One of the most popular examples of a Non-Fungible Token (NFT) is the very first tweet that was made on Twitter. CEO Jack Dorsey sold that tweet for $2.9 million dollars through an NFT transaction. That’s pretty crazy, right?

This may sound unbelievable, but digital assets are actually becoming more popular. You can make the most of this trend by buying or selling them.

The top NFT sold in November 2021 was CryptoPunks. These are 24×24 8-bit-style pixel art images of misfit guys and girls, with each one being different.

Example:

It’s not every day that an 8-bit digital artwork generates sales, but there are actually buyers out there who will purchase the entire CryptoPunk collection.

Some NFTs are popular because they’re in limited supply. That means the creators only decide to sell one copy of it (or a really limited amount) making them rare and desirable items.

There are 10k CryptoPunks currently available and collectors are purchasing them as fast as they can.

Non-Fungible Tokens (NFTs) can also offer a lot more than just artwork. NBA Top Shot is an NFT marketplace with licensed NBA and WNBA videos of some of basketball’s greatest moments.

For example, you can buy up-close footage of Lebron James making a shot when the LA Lakers played against the Toronto Raptors on August 1, 2020. Or if you wanted to see how Derrick Rose of the Detroit Pistons executed a game-winning shot against New Orleans this past year?

One other example of an NFT is William Shatner’s personal memorabilia. The actor was selling unique pieces from his 60- year career span to raise money for charity.

He sold 120,000 units of NFTs from this particular group of photographs within 10 minutes of releasing them for sale. Wouldn’t you love to have a copy?

Some musicians and bands are using blockchain-based applications to sell tickets to concerts, merchandise, etc.

As you can see, NFTs can be used to represent a wide variety of different things. For example, they can be used to represent art, music, trading cards, photographs, domain names, and collectibles. They have so many applications that it is difficult to list them all here.

NFTs are bought using crypto which you can purchase in the same way you buy other cryptocurrencies. MetaMask, for example, is a wallet program that can be used to store, send and swap tokens. It connects you to blockchain-based applications where you can then purchase NFTs

So far we’ve talked about NFTs and how they work and now we’ll talk about the types of things you can create to sell as an NFT.

You may be an artist, graphic designer, musician, marketer, etc. who makes digital products. And if you are, here’s some good news – you can now monetize it! In addition to the original content you create, startups and companies pay royalties for copies of your work.

As we mentioned above, scarcity is all about choosing to sell the digital asset or a limited edition of that digital asset.

For any NFT you want to create and sell, the steps remain the same. They are outlined below:

Learn how to create & sell an NFT:

  1. Create the product you want to sell an NFT for. For example, if you have something digital, it could be a digital photo or piece of art. If you have something physical, it could be a collectible or audio/video recording. If you have something virtual, it might be an item that exists in VR
  2. You’ll need some crypto acquisition before proceeding with your work. For the purposes of this piece, we’ll be using Ethereum’s blockchain to mint (generate) an NFT of your own. While there are several methods to follow suit, for our implementation in this writing, we’ve chosen to store it on Ethereum’s blockchain. Ether is a cryptocurrency, which means it’s value fluctuates. So to buy Ether, you’ll need to have a digital wallet. Step 2 tells you how to set that up.
  3. To make any other transactions on the Ethereum network, you’ll also need a digital wallet. MetaMask is recommended by us and others because it can both be installed as a browser extension or mobile app depending on your preference. Personally, we find the browser extension easier. It’s really up to youYou have been asked to create a new wallet. Confirm by clicking yes and proceeding with the agreement to the terms. Next, create a password and go through the security measures. Now your account has been set upTo add some ETH to your wallet, simply click “Buy” and select “Buy ETH with Wyre”. On this page, you’ll see the option to purchase ETH with either a debit card or Apple Pay.
  4. Connecting to a marketplace for minting & selling NFTs is the next step. There are lots of places to choose from but the one we’ve selected is OpenSea following it’s reputation among NFT communities.Once you have your wallet, select the OpenSea icon and go to My Profile. Sign in and follow the instructions in your walletFollow these steps: click Create > My Collections > Create New Collection. Name, describe and upload an image for your collection.

Now, you can hit New Item. Here are step-by-step instructions to take when creating an account. We’ve also put together a walk-through sheet on how to do everything when creating an account.

When you post your first offering, you will need to pay the gas fee we mentioned earlier. This creates a private smart contract in your wallet so that you can receive funds.

There’s only one small gas fee to pay for this gas no matter how many items you sell. The only exception to the rule is if we need to convert your payment into a different currency. In that case, we might need to re-pay a transaction fee again the first time.

That’s the basics of selling digital assets as Non-Fungible Tokens

Buying Non-Fungible Tokens

To buy NTFs, you first need a wallet and then funds added to it. You would then connect to different marketplaces, search for the NTFs that you want to buy, and purchase them.

Non-fungible tokens can be obtained for free, be priced fairly cheaply, or cost thousands of dollars. Some are sold through auctions while others have a set price with a buy now button

Regardless of whether or not the item is free, you may still be charged a gas fee for the transaction. These fees are variable and depend on how busy the marketplace network is at that moment

To ensure you have the ETH or funds to buy something, make sure you already have them in your wallet so it’s quick and easy.

Once you purchase the NFT, it will reside in your wallet until you sell it. You can access it like any other crypto asset.

Final Thoughts NFTs

Now that you know what Non-Fungible Tokens are and how they work, you’ll be able to purchase/sell them more easily. We’ve also provided tools and resources for planning, creating, and exchanging Non-Fungible Tokens

Many people don’t realize that once you set up your NFT, you still need to market it. Even though the marketplace is a good place for potential customers to find your product, there are many more viewers elsewhere.

it’s important to promote your NFTs elsewhere. We’ve included a list of ideas to promote your NFTs in this packet.


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