NFT – The New Hype of Blockchain –

Whether it’s an animated cat or dog, or even the twisted face of a celebrity, there’s something about NFTs that keeps people from taking it seriously until they start seeing the amount of money involved in these supposedly pointless caricature exchanges. This trend is truly baffling to those who still wonder why sane people would spend so much money on assets that only exist in digital form and that anyone can view or download for free. It won’t be long before you know why, come with me.

What is NFT (Non-Fungible Token)

An NFT is just a digital asset that represents a real-world object such as music, art, video and even text. Markets are online and transactions are mostly facilitated through cryptocurrencies as they all utilize the same technology – blockchain. NFTs have been around since 2014, however, as it evolved into a way to exchange digital artwork, its popularity has recently skyrocketed, with around $22b spent on NFTs in 2021 alone.

Unlike tangible works of art like Guernica and Ginevra de’ Benci, or even landed property, buyers of NFTs have a non-physical certificate of authenticity in tamper-proof code. You bet anyone can go online, view the image, and even use it as their showcase picture. However, only one person actually owns the NFT. It is this uniqueness that gives NFTs irreplaceable properties. While it is possible to exchange one ether for another, leaving the exact same value (fungibility) for the user, NFTs are a unique digital asset (eg, Kevin Rose’s New York Times PNG), It is a work of art in this context. Anyone can make and view a copy at any time, but only one original. It is this scarcity that proves the value of NFT collectors, who can also prove ownership of their digital assets.

unique identity of the owner NFT Verification is usually done through the immutable ledger of the blockchain. NFTs were originally launched on the Ethereum blockchain, but are now appearing on other blockchains, including Solana and Flow.

Let NFTs add any value.

NFTs help content creators easily monetize their work. Rather than transferring your artwork or text to a gallery or auction, they can be sold directly as an NFT, which is often more lucrative because the processing commission is relatively low. However, that doesn’t stop the artist from earning royalties every time they sell their work to another person. This is achieved by encoding automatic payments into the NFT’s smart contracts, ensuring creators receive their fair share of realized profits without relying on intermediaries. However, due to the unregulated nature of the ecosystem, sometimes people steal the artwork and make it into an NFT, depriving the original creator of the rights they deserve.

NFTs also create jobs, albeit through gaming. Axie Infinity is an NFT-based game that uses a “pay-per-game” model. This mod enables players to breed and feed reels (one NFT per reel), which can then be used to fight other players or sell them for profit. Axie Infinity gives many people the opportunity to earn life-changing money. However, as the game became more popular, the entry fee kept skyrocketing.

It’s definitely not all smooth sailing

There are many rugs that are also popular in cryptocurrencies. These scammers take advantage of people’s greed and the highly speculative nature of digital assets. This has led many to believe that NFTs are a bubble, synonymous with tulip mania in the 17th century.

The adverse effects of NFTs affecting everyone, no matter how active they are in the ecosystem, are the effects on the environment. NFTs rely almost entirely on cryptocurrency mining using enormous computing power and high power consumption. In my previous article, it was pointed out that a single Bitcoin transaction uses about 2,000 kilowatts of electricity, which is roughly the same amount of electricity that the average American household consumes in 70 days. Now add the minting of NFTs (currently on the rise) to that equation and we have a recipe for disaster.

NFT market

The first step to buying an NFT is to have a cryptocurrency wallet that holds the NFT you intend to buy. The next step is to buy the underlying cryptocurrency from the NFT provider.You can buy from exchanges by using a credit card such as Coinbase and Binance, then transfer funds to your preferred wallet.

There are several NFT platforms like OpenSea, Foundation, BakerySwap, Axie market and rare. Your role is to understand each NFT type before creating an account. You also need to be careful, as some of these platforms don’t require user verification, meaning fraudsters can list artwork that doesn’t belong to them, giving zero buyer protection.

At the time of writing, NFTs are still struggling to find any use other than as a speculative tool, bought for the sole purpose of making a profit. Then it would be logical for anyone eager to take some action.