NFTs meaning, and why are they so important?
With every new digital breakthrough comes limitless possibilities.
Jack Dorsey, the former CEO of Twitter, put up the very first tweet made in March 2006, “Just setting up my twttr,” as an NFT in 2021. The highest bid on that tweet was a whopping $2.5M by the CEO of Bridge Oracle.
Think that’s insane and wonder why anyone would do that for something everyone has access to?
Let’s give you an insight into what NFTs are and why it’s justifiable insanity to spend that much on something as little as a tweet.
NFTs: What does this mean?
NFTs are shortened for “Non-Fungible Tokens.” The phrase “non-fungible” means something that’s unique and cannot be replaced with something else.
For instance, a bitcoin can be traded for another bitcoin, but a piece of NFT art cannot be replaced with another piece of NFT art because each is unique and completely different.
One NFT has a completely different and unique identifier from the next.
How do NFTs work?
Imagine the CEO of Meta, Mark Zuckerberg, decides to sell the company. He lists it as an NFT, and everyone in the world starts bidding on it. The highest bidder gets the company, of course.
In real life, the highest bidder would have all the rights to this newly acquired company, and unless you had prior knowledge of who the former CEO was, there’s really no way of keeping track of the company’s ownership change of hands.
However, as an NFT, Mark gets to maintain recognition as the original CEO of the company, and the digital footprint of everyone who will own the company after him can be seen by the entire world.
This is one of the graces the NFT market has to offer. NFTs are built on the Ethereum blockchain, where assets can be sold and bought in cryptocurrency. Getting paid in cryptocurrency also gives digital asset owners the ability to reinvest their tokens and multiply them (how cryptocurrency works).
Depending on the value placed on an asset, its price can increase over time. Every time the asset’s ownership changes, everyone who has owned it will be listed on the blockchain for recognition, and they can also get a cut every time the asset sells to a new owner.
Yup, an investment everyone would like to be a part of.
Who are NFTs meant for?
Anybody can own an NFT. From the little child in your area who makes handprint art to your favorite musician to the CEOs of companies. However, the people who have tapped into this digital economy the most over time are creators, buyers (people like you and me who like to support creators we love), and collectors.
Benefits for Digital Creators
In our last piece, we talked about how the future of content creation has changed and how content creators are yearning to move away from the chokehold that Web 2.0 social media platforms have on them to a more promising one, Web 3.0.
Content creators can sell their rare digital art, music, sounds, videos, writings, etc. as NFTs to as many people interested in purchasing them, while they generate passive income from the platform as their assets touch the hands of multiple owners. NFTs have unlocked a whole new level of digital investment, and creators are ready for it.
Benefits for Buyers
Millions of fans across different niches always want to feel connected and have a personal touch with their icons. NFTs have given them a great avenue to do that.
Not only do they get to show how much they love their icon by purchasing their works, but they also get to be recognized for their patronage.
Imagine Rihanna or Jay-Z giving you a special dinner invite because you purchased one or more albums as an NFT.
Benefits as a Collector
Of course, we can’t leave out the fact that there are people who are always on the lookout for how to monetize things, especially when new ventures hit the block.
We have them as well for NFTs, and they’re called Collectors. A digital asset looks interesting and has been projected to give massive returns in the future? They purchase and keep them until the value spikes, and they can gain a huge profit from them.
Types of NFT Assets
There are a wide variety of things that can be sold as NFTs. However, these things have been classified into groups for easier understanding. They are:
- Gaming Items
- Domain Names
- Digital Content
- Investments and Collaterals
- Physical Items
Okay, but why does everyone want an NFT (Uniqueness)
NFTs are unique for three main reasons:
Digital asset owners can place features that cannot be duplicated on their assets. These unique assets also have traceable proof of ownership on the blockchain to prove their rite of passage amongst their different owners.
Currently, there’s an overabundance of content across the internet. Content whose owners cannot be traced, hence preventing them from gaining the recognition they deserve. NFTs allow content creators to determine how much of their creation goes into circulation and if it can be replicated by other people.
A number of NFTs offer royalties to creators on their assets. As the assets pass on from one person to another, the creator is rewarded with a percentage of each sale made.
Creators are finally getting the compensation they deserve, and this is the best part of the NFTs!
Where can I sell my stuff as an NFT (Marketplaces)
There are a couple of marketplaces where digital asset owners can put their assets up as NFTs. Each of these platforms, just like every other industry, has its own uniqueness. Some of them are:
- Theta Drop
- Axie Marketplace
- Larva Labs/CrptoPunks
- Nifty Gateway
- NBA Top Shot Marketplace
Make sure to research each of them to find out if they’re the perfect match for you and your assets.
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