NFTs – non-fungible tokens – are unique digital assets that live on blockchain technology. They can be music clips, videos, animations, digitized artwork, photos, or even a ticket to an event, such as a movie, that took place at a specific time. What's notable about NFTs is that they prove ownership.
Blockchain technology was created as a system where document timestamps could exist and not be tampered with in any way. Bitcoin, for example, uses the blockchain as a public ledger for cryptocurrency transactions.
Bitcoin and Ethereum cryptocurrencies that live on a blockchain are fungible. Some amount of Bitcoin can be exchanged for some amount of fiat currency or another cryptocurrency. An NFT is non-fungible, meaning it's unique and cannot be replaced. There are other blockchains supporting different cryptocurrencies that can host NFTs.
A single ETH, as of this writing, is worth roughly $3,300 USD. As an artist, you will need to purchase at least a fractional amount of Ether for so-called 'gas fees'. This will enable you to cover the costs associated with minting your NFT, which places it on the Ethereum blockchain, and listing it for sale. Digital wallets such as MetaMask streamline this process. You're required to have a digital wallet in order to connect with NFT marketplaces and authenticate your identity.
Why Collect NFTs?
If NFTs are digital files, can't they be downloaded or copied many times over? What is the purpose of buying an individual NFT?
For a collector, the intrinsic value associated with the purchase of an NFT is supporting an artist whose work they admire. When you own an NFT on the blockchain, you have the ability to flip it, or sell it on the secondary market for profit. The collector won't be the only one benefitting from this transaction. Because it has a unique identifier, and there's a record of the work on the blockchain, it's easy to track.
Importantly, the artist benefits every single time their NFT changes hands. Photographer Trey Ratcliff told DPReview, 'I get 10% of every subsequent sale until the end of time, so that's pretty cool! It’s a simple process for the owner of the NFT really. They view the NFT, click sell, put in a price they’ll accept and wait for bids to arrive. If someone meets the price it sells/transfers instantly,' Ratcliff's latest collection, 'Beautiful Cities of the World' made $250,000 in the first three hours after launch.
How to Buy NFTs on OpenSea?
You need a wallet (such as MetaMask) and some Ethereum Ether (ETH). Metamask, which is a wallet, also workss almost like your password and gives you access to OpenSea. Simply follow the easy step by step video tutorial above.
