A quick crash course on how to use NFTs from start to finish.
NFTs have taken the world by storm. And while celebrities like Snoop Dog, Paris Hilton, Eminem and Emily Ratajkowski have embraced the NFT marketplace with open arms, you may still be asking yourself what the heck is a NFT?
Don’t worry — we are right there with you.
NFTs have exploded in popularity, but there’s a lot of confusion around what they actually are.
We thought we’d give a breakdown of what NFTs are, so our community can get in on the craze.
So, what in the world is a NFT?
NFTs, which stands for non-fungible tokens, are stored and secured on the public blockchain. They are unique tokens that cannot be changed, modified or destroyed.
This means it’s a unique transaction that can’t be replaced with something else. Whereas fungible transactions are interchangeable, meaning you are trading money for the value of something.
A prime example of a fungible transaction is when you purchase coffee. You pay a barista $4, and you get your latte.
Non-fungible transactions are like sport trades. The Toronto Raptors traded DeMar DeRozan for Kawhi Leonard in 2018, which led to Toronto’s first-ever NBA title. The trade was a one-of-a-kind transaction.
Where to start.
In order to do anything in the NFT realm, you’ll need to set up a few things:
- Crypto wallet: A crypto wallet will allow you to interact with the Ethereum blockchain. There are a ton of Ethereum wallets to choose from, but MetaMask is one of the most widely used wallets.
- Cryptocurrency: There are a variety of different currencies that exist, and you’ll need to buy them to make transactions. For example, you can easily buy Ethereum directly within MetaMask, or through crypto-exchanges such as Coinbase.
- Marketplace: An NFT marketplace is the only place where you can store, buy and sell your NFTs. The most popular marketplace today is OpenSea. OpenSea also offers an easy process to create your own NFT, which is called “minting”.
Once you’re set up with a crypto wallet, you’ll need to connect it to your marketplace. Think of this as setting up a credit card on your Uber Eats account.
What kind of NFTs should you buy?
That is completely up to you! NFTs are unique digital assets that you own, so think of it the same way you would a physical collectors item like art or a trading card — just in the digital economy.
Types of NFTs you can buy include art, GIFs, sports highlights, video game skins and more.
What do you do with a NFT after you buy it?
Again, that is entirely up to you! Just like you would collect art throughout your lifetime, you can collect NFTs to support creatives.
Some people will hold onto NFTs for potential long-term growth to turn a profit, whereas others actively trade NFTs to take advantage of price fluctuations.
There’s no right or wrong answer here.
How much can NFTs go for?
In 2021 the NFT market grew exponentially, with trade volume at nearly $25 billion — up from $95 million in 2020.
To put it into perspective, a popular NFT collection called the Bored Ape Yacht Club costs about 100 Etherum or over $400,000 CAD today.
However, just a few short months ago you’d only be paying around 1 Ethereum for the NFT. Of course this is one of the space’s fastest-growing NFT collectibles, but nonetheless gives you an idea into just how much a NFT could be worth.
The future of NFTs
While many believe it’s only a matter of time before the NFT bubble pops, they’re certainly here to stay. Use cases for NFTs go far beyond just digital art and video games, and can translate to legal contracts, proof of ownership, licensing, certifying authenticity and much more.
For example, NFTS can be used for music royalties. Artists could generate royalties whenever their NFTs are traded, sold or bought and regain control over the value of their music. It’s safe to say that as our world becomes increasingly digitized, the need for digital ownership will be a growing need — a growing need NFTs can support.
Ready to dive into NFTs?
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