Non-Fungible Tokens or NFTs are blockchain-based digital assets that are unique, cannot be duplicated without permission and have different values because they cannot be exchanged or replaced by others. What are the benefits of NFT, how does it work, including buying and selling and why has the price gone up lately?
Recently, NFT has stolen the attention of many crypto players in the world, along with the soaring price of NFT.
Many people think that NFT is a digital art that is expensive because of its popularity in recent years.
However, in fact, NFT itself is a unique verification token that is used as a certificate that protects digital works from unauthorized duplication on the internet you know!
In this article, we’ll cover everything you need to know about it. Starting from the definition of NFT, how it works, popular terms, and the most expensive work ever sold.
Let’s just get started with the article!
NFT is a token of ownership of digital assets stored and traded on a blockchain network. Basically, NFT stands for “Non-Fungible Token” which can be translated as “non-exchangeable virtual unique token”.
NFT is the latest cryptocurrency phenomenon that has become very popular after someone sold the first NFT artwork for $ 69 million .
The artwork, entitled “The first 5000 days” contains 5,000 image collages created by digital artist Mike Winkelmann (Beeple).
If you look at the artwork, you may at first glance wonder what makes this collection of image collages so special.
Well, actually what makes the “The first 500 days” picture collage so valuable is the NFT token that is in the artwork, you know.
The meaning of non-fungible is something that cannot be exchanged or replaced by another because it has a different value. More simply, unique items.
One example of something non-fungible is living things and works of art. Surely you will not be able to replace Picasso’s work with another painter’s work, right?
NFT transforms digital artwork and other collectibles into unique robot tranding binance, verifiable and easily tradable super assets via blockchain tokens.
Using blockchain technology tokens, NFT certifies the authenticity and ownership of the original certificate of a specific and unique digital object.
It was this unique token that made the digital artwork “The first 5000 days” sell for an unreasonable price. There is only one person who has it.
Thus, each NFT item has only one certified owner, even if the file can be copied and distributed to the internet.
The blockchain used in NFT itself is the basic technology and programming that underpins various cryptocurrencies, including bitcoin.
Although built on the same blockchain programming basis, Non-fungible tokens and Cryptocurrencies are actually very different, you know!
NFTs have a very different purpose, form, and use when compared to cryptocurrency blockchains such as Bitcoin and Ethereum.
Each NFT token has a unique distinction and is only generated once for each item.
This token is Non-fungible which means it cannot be exchanged or traded with other NFTs because their value is not comparable
While cryptocurrencies, like money in general, are fungible. This means that crypto can be exchanged or traded with other types of crypto.
In addition, Cyrpto also has the same value — although the number of crypto coins can change when exchanged for other types of crypto.
For example, one Ethereum is worth one Ethereum (about 3 thousand dollars). However, when exchanged for Bitcoin, one Ethereum is only 0.083 bitcoin of the same value.
Each NFT token has a digital signature which makes it very unique from one another. So you won’t find NFT with the same value.
This unique characteristic of the NFT token works like a fingerprint that makes it easy for systems and software to verify the original ownership of the work.
In addition, the owner of the NFT work can also store certain information such as signatures or others in the NFT token’s meta data, you know!
Benefits of NFT
NFT digital assets have a number of advantages:
1. Copyright Protection
NFT provides a unique proof of ownership. Cannot be plagiarized or duplicated because tokens are stored on the blockchain.
As a result, NFT minimizes people from abusing copyright because they can no longer arbitrarily steal other people’s work. This makes protection of copyrighted works very good.
People can’t just claim that they own a digital asset. Because there is a single unique NFT that is proof of ownership of digital assets.
NFT can only be owned by 1 owner at a time.
2. Monetization of Artists
With the NFT, an artist’s work can be more easily traded and make money. This is especially true for digital assets.
Artists only need to sell their work on the NFT marketplace. No need to worry that his work will be damaged, stolen or plagiarized.
The process in a marketplace that is open to the public, across countries and without borders, makes the artist’s work more recognizable by anyone. The market is wide open.
In addition, the existence of NFT opens up wide opportunities for artists and musicians to add new income opportunities. For example, a musician who has just released an album, can create a special NFT for the exclusive new single on the album.
3. Stored Safe
NFTs are stored in the blockchain network. This makes NFT super secure, impossible to hack or break into.
Blockchain is built in a decentralized manner and uses cryptography, so the security aspect is very guaranteed. If news emerges about people conceding in crypto, then it is not blockchain technology but due to negligence of use.
4. Adoption of NFT in Other Fields
The NFT function, which provides unique certification or proof of ownership of digital assets, is very likely to be applied to other fields. For example, to make a house certificate, birth certificate, agreement certificate.
By using NFT, certification becomes more secure. Because everything is stored securely on the blockchain.
Imagine, the problem of land or vehicle certification that has been prone to fakes, can be solved by using NFT solutions on Blockchain. It is no longer possible to have duplicate or fake land certificates if they have been recorded using NFT.
How to Trade NFT
Because NFTs are stored on the blockchain, buying and selling NFTs must go through the blockchain network. In today’s crypto world, the well-known blockchain networks providing NFT are Ethereum, Cardano and Solana.
The biggest buying and selling of NFT right now is on Ethereum through the NFT marketplace OpenSea.io. We will see how to buy and sell on OpenSea.
The process of buying and selling NFT on OpenSea.io is:
1. Create a Metamask Wallet
We have to create a wallet that can later be connected to OpenSea. This wallet is different in each Blockchain.
Ethereum uses a Metamask wallet which is later linked to OpenSea.
2. Connect Metamask to OpenSea
Because blockchain is a permissionless network, consumers do not need to carry out KYC processes, such as identity checks, photo submissions and others. It is enough to connect the Metamask wallet to Opensea.io as an NFT platform.
3. Set Up Collection Page
After connecting the wallet to OpenSea, the next step is to set up the collection page. On this page, we place the items we want to sell.
On this page, we can also set the commission fee that will be obtained if another user buys our collection and then sells it again to another user. We can get a fee from the transaction.
4. Upload Collection
Upload our digital assets to the collection page that we have setup. Some information needs to be completed here.
5. Sell Collections
We are now able to sell the digital assets that we have. Opensea provides various types of prices.
We set our own price or the highest bidder. We choose the type of price that best suits your needs.
6. Listing Fee
When listing a collection of assets on OpenSea for sale, we are charged a listing fee. These fees are in the form of blockchain coins used. Because it uses Ethereum, the fee is in Eth,
This fee is known as the Gas Fee.
7. Wait for the Buyer
All digital asset listing processes are complete, so we are waiting for a buyer.
Popular Terms in NFT World
Now, after knowing the meaning of NFT and the difference between it and crypto, surely you are interested in starting to enter the world of non-fungible tokens, right?
Unfortunately, as a newcomer to the world of NFT, you will come across a lot of unfamiliar terms that you need to learn.
The good news is, we’ll cover some of the most popular NFT terms to help you out. Here are some of them!
NFA (Not Financial Advice) — used when the advice given by others is neither useful nor beneficial to you.
DYOR (Do Your Own Research) — if someone has said this to you, it means that person wants you to think and make your own choices.
LFG (Let’s F***ing Go) — used when you are excited to do something related to NFT; sell, buy, or otherwise.
Mint — the term used when issuing NFT artwork on the blockchain. “I I want my digital work”, for example.
Moon — Another common financial term that is often used in the NFT community and refers to the value of an asset that has increased a lot.
Hodl — used when the original owner will not trade the purchased NFT work when the price rises in the market.
Floor Price — lowest auction price available on OpenSea / Larvalabs/ for either the whole collection or just a part.
GMI (Gonna make it) — meaning in Indonesian is “will succeed” which means that if you buy NFT’s work, you will be successful and rich in the future.
WAGMI (We’re all Gonna Make it) — the same as GMI, but the context is for more than one person.
NGMI (Not Going to Make it) — the opposite of GMI and WAGMI.
Rows of the Most Expensive NFT Works
Prior to the arrival of NFT, digital art did not have the same value and price as the masterpieces of famous painters such as Monet, Picasso and Vincent Van Gogh.
The reason is because digital artwork can be easily duplicated, so it is not easy to distinguish fake and original artwork.
The issue of ownership or ownership of works on the internet and digital media has always been a sensitive and complicated topic.
Well, NFT allows NFT digital asset owners to give unique tokens to each of their works and of course make the value of the work increase.
There are various kinds of NFT digital assets. Most represent real-world objects such as artwork, music, limited edition in-game items, and music videos.
NFT digital items themselves are indeed becoming more and more popular throughout 2021. More and more digital artworks, even tweets, are selling for millions of dollars.
The following is a list of NFT works that have sold at very tempting prices in recent years!
1. CryptoPunk Collection
CryptoPunks was first created in 2017 and is now one of the most expensive NFT collections available on the market.
This collection of pixel images called CryptoPunk was created by Larva Labs Studio and was one of the first NFT projects on the Ethereum blockchain.
Four items from the CryptoPunks collection have sold for millions of dollars — one of which is this image of a masked alien punk that earned 11.75 million dollars.
2. Ocean Front — Beeple
Surely you remember Beeple’s picture collage that sold for $69 million? It turns out that this digital artist has many other NFT works.
Today, Beeple is indeed one of the most famous and respected digital artists in the world. The price tag on all digital works proves this.
In addition to Everydays, Beeple has the work of NFT Ocean Front which aims to be a warning about the dangers of climate change in the world.
This work sold for 6 million US dollars.
3. Stay Free
This Edward Snowden Stay Free NFT artwork sold for $5.4 million.
This work features court documents that ruled that the US National Security Agency’s mass surveillance practices violated existing law.
The proceeds from the sale of this NFT work go entirely to the Freedom of the Press Foundation, of which Snowden is president.
4. Save Thousand of Lives
NFT’s work “Save Thousand of Lives” was created by NooraHealth as a medium to collect donations for new mothers in South Asia.
On May 8, 2021, this collection of photos was sold for $5.2 million to a programmer named Paul Graham at a charity auction program.
5. Twitter CEO’s First Tweet
As previously discussed, NFT’s work is not limited to digital works. Even the CEO’s first tweet can be sold!
In mid-2021, Jack Dorsey, CEO of one of the most popular social media platforms, tries to sell his first tweet as an NFT creation.
The Twitter tweet posted by Dorsey as his first tweet on March 21, 2006 only contained the words “just setting up my twttr”.
After two weeks of auction, Jack Dorsey finally managed to sell his first tweet for 2.9 million dollars to Sina Estavi, CEO of Bridge Oracle.
Proceeds from the sale of NFT’s tweets were turned into bitcoin and donated to the GiveDirectly organization which provides aid to the poor in Africa.
6. DESTINATION HEXAGIONA
Apart from digital images and Twitter tweets, it turns out that audio-visual and music experiences can also be NFT, you know. One of them is DESTINATION HEXAGIONA.
Sold at a price of 1.24 million dollars, this audio visual created by SuperRare has a duration of one hour and was made for 12 months.
This NFT also has a physical product in the form of a hard drive containing the only copy of the work’s files with the best quality.
So, What is NFT?
In short, NFT is a new solution to the problem of proprietary and unauthorized duplication of online digital information and works that is rife on the internet.
NFT allows work owners to assign a unique token to each work. This unique token will become the original certificate of the work.
So, that was a complete explanation of the meaning of NFT!