NFTs have a number of advantages for artists, but due to their ties to cryptocurrency, many people have trouble breaking into the industry.
What are non-fungible tokens?
A non-fungible token is a unique token attached to an asset. The term “non-fungible” means that NFTs can’t be exchanged with other NFTs. You can exchange cryptocurrency without changing the value, but you can’t exchange one NFT for another. Each NFT is a unique piece with its own distinct value. This makes NFTs particularly valuable because they’re one-of-a-kind.
Creators can make just about anything an NFT, including artwork, GIFs, video clips, memes, music and digital trading cards. Buyers purchase NFTs from marketplaces like Open Sea and resell them later or display them in their public galleries. Many NFTs come with extra features — some that don’t unlock until the NFT has been bought a second time. Artists can also collect royalties every time someone buys the NFT.
You can copy a digital file as many times as you want, including the art that’s included with an NFT.
But NFTs are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). To put it in terms of physical art collecting: anyone can buy a Monet print. But only one person can own the original.
One of the obvious benefits of buying art is it lets you financially support artists you like, and that’s true with NFTs (which are way trendier than, like, Telegram stickers). Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.
When you buy an NFT, you don’t just buy the file. You buy the right to sell the NFT, display it online and take advantage of other features that might come with the asset. This makes NFTs an investment because you can potentially sell them later for a profit. Once you make a profit, you can use the Etherum to buy new NFTs or make other investments.
How do you buy NFTs?
To buy NFTs with crypto, you’ll start by opening a digital wallet. A digital wallet holds a record of your balance and transactions. Most wallets automatically create an Ethereum account for you, which stores your information. This means that the wallet doesn’t hold your cryptocurrency — it just makes it easy to access your data. Unlike bank accounts, you can easily switch to another provider without having to transfer your Ethereum.
NFT marketplaces have public galleries so you can display your collection on your profile. If you’re a collector, you might be content with simply buying NFTs. You could also use NFTs as an investment by purchasing them now and reselling them with the value increases. Other options include giving NFTs as gifts or using the assets in a virtual game.