1. What Are NFTs And How Do They Work?
2. What Exactly Are NFTs Used For?
3. What Are Some Examples Of NFTs?
4. How Does An NFT Make Money?
5. How Much Does It Cost To Create An NFT?
6. What Is The Downside Of NFTs?
7. Is It Worth Investing In NFT?
The domination of innovative and revolutionary technology never ceases to amaze us. And the introduction of NFTs has emerged as the latest craze in the digital space.
Even celebrities have jumped the NFT bandwagon, releasing special memories, artwork, and moments as securitized NFTs. The corporate adoption of NFTs, like Starbucks' NFT loyalty program, the New York Knicks offering NFTs to ticket holders, etc., is expected to increase in the year to come.
People who know little about Cryptocurrency need useful insights to wrap their heads around NFTs. Only 4% of the US Population owns NFTs because the majority of the population still needs to learn about NFTs.
So, what will be the trends influencing the market in 2023? Let us delve deeper and find out more about the fabled world of NFTs.
The NFT full form is a Non-Fungible Token, a token on the blockchain. An NFT can prove the ownership and authenticity of digital art, collectibles, and other virtual assets. In simple words, the NFT meaning is that it cannot be exchanged for other assets on a 1:1 basis.
Each NFT is unique and has its value and characteristics, which cannot be changed. "Silks" is the most popular NFT for beginners to start the NFT journey. NFTs exist on blockchain technology. The working of an NFT is based on the Ethereum blockchain, although other blockchains also support them.
Key Takeaways of an NFT:
NFTs are used as proof of ownership of digital assets, such as art, music, video, and other files. For instance, artists no longer depend on galleries or auctions to sell their art. Instead, they can sell their art directly to the consumers as an NFT.
The new use cases of NFT technology will pop up all over by 2023, including:
NFTs are digital tokens on a blockchain bought or sold to transfer ownership of a digital file. Some NFT examples include NFT art, collectibles, music, video, virtual event tickets, domain names, etc. NFTs can also represent physical items, such as real estate or luxury cars, that can be tokenized.
Numerous investors are getting into the NFT market to profit from NFTs. If you have been watching from the sidelines, wondering where to start, do not worry. Here are some ways you can make money with NFTs.
One of the popular ways to make money is by selling an NFT on an NFT marketplace. The best NFT marketplace is OpenSea which rose in prominence as the industry grew and now handles more than 50% of all NFT trading volume. There are also many other marketplaces to sell and trade NFTs.
Today, there is an opportunity in the market where you can play to earn. Blockchain-based games allow you to purchase in-game items as NFTs and trade them. More games are recently launching with more affordable NFTs.
One of the most exciting upcoming NFT projects in 2023 is Metacade. It seeks blockchain technology to create the metaverse's largest play-to-earn (P2E) video arcade game.
You can also stake your NFTs for rewards and incentives on various sites. NFT staking comes in various forms, although the primary mechanism is to 'lock up' the digital asset on a DeFi platform and receive rewards in return.
Almost anyone can create NFTs, including musicians, entrepreneurs, artists, brands, platforms, content creators, etc. The critical thing to consider is the value an NFT brings to the table.
So, how are NFTs made? NFTs are created using a process known as Minting. The process of NFT minting requires conversion of digital data into crypto collections or digital assets that are recorded on the blockchain. The digital are then stored in a decentralized or distributed ledger. Hence, they can’t be modified, edited or deleted from the blockchain.
The assets tokenized into NFTs are available for purchase through the NFT marketplace such as OpenSea. Once created, the NFT can be sold, destroyed, or kept as a record indicating ownership.
Creating an NFT depends on the person's ability to handle the most expensive work. If the approximate values from all the costs involved are taken into consideration, making an NFT costs somewhere in between $0.01- $7000.
Another critical question to consider is how to sell NFTs. Below are the steps to sell an NFT the first time:
Step 1: Select an NFT marketplace.
Step 2: Get a crypto wallet.
Step 3: Price your NFT.
Step 4: Create a listing.
Step 5: Accept a suitable offer to sell your NFT.
Generally, NFTs are not widely understood, and the number of potential buyers and sellers is small. Be mindful when hopping on board the NFT train, as there are also disadvantages to owning NFTs.
Here are a few disadvantages of NFTs:
Is investing in NFTs in 2023 the Right Move? NFTs have exploded in popularity after some investors made millions from NFTs. For instance, Twitter CEO Jack Dorsey sold his first tweet in the form of NFT for more than $2.9 million.
Proof of ownership is the primary reason for investing in NFTs, as you can link the ownership of any asset to a particular account on the blockchain network. The ownership privileges of NFTs also minimize the risk of buying counterfeit NFTs.
There is also a high chance that the NFTs will become more valuable as the industry grows. NFTs can be traded on various exchanges, making it easier to sell them for cash when needed.
In recent years, NFT cards have become famous for collecting digital items in gaming, art, and sports. A new trend emerged in 2022, which will also be in 2023. It is the integration of Artificial Intelligence into NFT. It will provide users with a distinct and dynamic experience that is impossible to replicate with other forms of technology.
So, why are NFTs bad? NFTs are new and exciting, but they also present some risks. There are high chances of damage to digital assets and investors buying and selling NFTs. To understand the worth of an NFT, look at something other than the current value. Understand its use cases and the possibility of growth in the long run.
The utility of Non-Fungible Tokens lies in their use of blockchain technology, which is impossible to hack. NFTs are even an attractive revenue stream for many brands.
Many businesses are now using NFT trading cards to promote their products or services by offering them as rewards or incentives to customers. By 2026, the NFT market is expected to reach 100 billion dollars. The versatility of the Blockchain technology is also leading to innovative solutions like tokenization of real estate and much more.