What Exactly are NFTs, and How Can You Trade Them?
If you don’t live under a rock, you probably have heard of NFTs and how various artists have made millions of dollars trading digital art and collectibles. You likely have asked yourself how to create your own NFTs and sell them to make money. If you want to know how to do just that, this article is for you. But first, what exactly are NFTs?
What are NFTs?
NFT stands for Non-fungible token. A non-fungible token is an item that is unique and cannot be perfectly substituted by another token or item. Fungible assets, on the other hand, can be replaced easily.
To bring this definition to life, consider these contrasting examples. A twenty-dollar note can be removed from a safe and replaced with another twenty-dollar note. While this occurs, the value is unchanged. The twenty dollars remains twenty dollars. This means money is a fungible asset.
However, a signed jersey from Cristiano Ronaldo cannot be substituted with another random jersey while maintaining the same value even if both look exactly alike. The uniqueness of the signed jersey makes it non-fungible. In the same way, NFTs are non-fungible assets on the blockchain.
Contrary to popular opinion, NFTs do not represent art alone. It could be anything digital; art, music, tickets, tweets, and so forth. NFTs can be created from scratch and exhibited on NFT marketplaces.
NFT Marketplaces for Trading Digital Tokens
Anything that can be bought or sold usually has a marketplace. Since NFTs are digital tokens on the blockchain, marketplaces to mint and trade these tokens are only digital, not physical. Some of the most popular NFT marketplaces are Opensea, Rarible, Mintable, and Nifty Gateway. Users can create or mint and sell their NFTs on these platforms. Each of these platforms has its unique features.
Opensea is known for its vast volume. A lot of creators exhibit their digital art on the platform. However, the exchange has come under severe criticism for accepting just any user in recent times. Many scammers have taken advantage of the open nature of this marketplace to list fake items or imitation copies of digital art.
Rarible, on the other hand, is liked by many digital art lovers because the platform is decentralized. Rarible also uses its native token RARI to incentivize loyal users. Compared to Opensea, Rarible is more secure for minting and selling NFTs.
Mintable is great for starters and enables individuals to mint NFTs without paying a fee. However, the platform deducts a nominal fee when the NFT has been sold successfully.
Finally, Nifty Gateway is unique for its emphasis on NFT quality. To avoid fraudsters from stealing and reselling an image or digital token they do not have rights to, the platform strictly filters art exhibitors and only partners with top artists and curators who own the original art.
How to Mint and Trade a Non-fungible Token
Minting and selling NFTs are simpler than creating physical art for sale. The steps required in minting and trading digital tokens are highlighted below:
· Fund the wallet with Ethereum. You can easily purchase ETH from an exchange or an individual.
· Connect your crypto wallet to the NFT marketplace.
· Upload your digital art or token to the marketplace. This could be a picture, music, tweet, video, or any other digital item.
· Pay the gas fees required to mint the digital token and create your listing on the marketplace. Not all marketplaces require gas fees. However, most marketplaces accept Ethereum as their native token.
After the item has been listed on the marketplace, your crypto wallet will be credited once someone purchases your item.
To avoid scams, users should never share their private keys or passwords. Also, avoid clicking links from sources you do not trust. Some of these links are phishing links cybercriminals use to harvest personal data from traders of digital tokens.
The uniqueness of non-fungible tokens gives them their value. Additionally, since NFTs are represented on the blockchain, the original copy of a digital token can always be differentiated from imitation copies. It is the responsibility of users to select the right NFT marketplace for trading digital tokens.