fbpx
Edit Content

NFT – All You Need To Know About Non-Fungible Tokens

NFTs - All You Need To Know About Non-Fungible Tokens

The Baba Onilu NFT “Miracle”.

Baba Onilu, an itinerant traditional talking drummer who frequents public places to “hustle for his daily bread”, recently got more than he bargained for – 500,000 naira from his photographs sold as NFTs online.

What? NFT what? I will return to how Baba pulled this “jackpot” off later, but for now, what are NFTs, and how do you benefit from the huge income potential they offer?

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

Get business lessons from our channel.

What Are NFTs?

NFT or Non-Fungible Tokens are forms of digital assets that you can use to represent collectables like artworks, music, games and even metaverse real estate with authentic, unique certificates created by blockchain technology – a technology that underlies cryptocurrency operations. Their use of blockchain technology makes it easy to verify and authenticate ownership at any given time.  

NFTs are non-fungible, meaning that they are unique and can’t be replaced with something else. They are digital forms of “physical collector’s items”. So instead of getting a pair of actual designer’s sneakers to rock on your next outing, the buyer receives a digital file (photograph) of the item instead.

NFTs can have only one owner at a time, and the owner has exclusive ownership rights over them. NFTs can also store specific information in their metadata file sectors as digital assets. This particularly comes in handy for NFT creators who can sign their artwork by including their signature in the file.

Features of NFTs.

Uniqueness.

Each NFT has a distinct attribute or digital signature, often recorded in the token, making it impossible for it to be forged or manipulated. In addition, NFTs have distinct personalities, and no two NFTs are alike.

Exchange Sites.

NFTs transaction exchanges can occur with cryptocurrencies such as Bitcoin on specialized NFT exchange sites.

Indivisibility.

You can’t break most NFTs into smaller parts, and you can’t buy or transfer a portion of them.

Transparency.

Non-fungible tokens are stored on decentralized and immutable public distributed ledgers, and as a result, records of token issuance, transfer, and activity can be publicly verified. This transparent architecture means buyers can trust and verify the authenticity of a specific NFT.

What Is The Difference Between NFTs And Cryptocurrencies?

The significant difference between NFTs and cryptocurrencies is fungibility. Both cryptocurrencies and fiat money are fungible, meaning you can trade or exchange them for equal value for one another. For instance, 1 Nigerian Naira is equal in value to another 1 Naira; one bitcoin is always equal to another.

NFTs, on the other hand, are different. Each has a unique digital signature that makes it impossible for it to be exchanged for or have an equal value to another token. Hence, it is not practicable to trade or exchange for equal value Baba Onilu’s digital asset (photograph) with another copy of that same photograph or any other digital asset because each asset or token has a unique identifier or digital signature from the rest.

Go from idea to starting your business in 30 days
Go from idea to starting your business in 30 days

Find out more about cryptocurrencies here.

How Do NFTs Work?

NFTs run on blockchain technology, which allows them to be authenticated, stored, and transacted transparently. For instance, if you create or transfer an NFT, the action is permanently recorded in real-time on the blockchain ledger and timestamped, meaning it’s possible to trace any single NFT right back to its very beginning.

Learn more about blockchain technology here.

How To Create NFTs.

The vast majority of NFTs available today are powered by Ethereum blockchain technology.

Here are steps to take to in creating your NFTs.

Pick Your Item.

First – you need to determine the unique digital asset you want to turn into an NFT. This unique asset could be an art painting, picture, video game, or even a tweet. Remember that the item’s rarity can influence and determine the value of the NFT.

Choose Your Blockchain.

Once you have sorted out what kind of unique digital asset to create, you now have to choose the blockchain technology it will run on. The most widely used blockchain among artists and creators is Ethereum, but other blockchain options exist – Polkadot, Binance Smart Chain, Cosmos, etc.

Set Up Your NFT Wallet.

You will need some cryptocurrency to fund your initial NFT investment, and a digital wallet is where you will store your cryptocurrency. Ensure your digital wallet supports the blockchain protocol running your NFTs and the cryptocurrency you’ll buy the NFTs with, such as Ether.

And if you already have some cryptocurrency elsewhere, you may want to connect it to your digital wallet so you can use it to create and sell your NFTs.

Top Popular NFT Wallets.

This list is by no means exhaustive.

  • Matamask
  • Math Wallet
  • AlphaWallet
  • Trust Wallet
  • Coinbase Wallet.

Select Your NFT Marketplace.

There are many NFT marketplaces in existence, and some of them have a specific focus or niche target. Therefore, it would be best to find out more about these marketplaces to know which one is a good fit for you before settling on it.

Tips for choosing NFTs marketplace.

Define Your Digital Assets.

Firstly, you need to decide the kind of digital assets (NFTs) you are interested in creating, selling, or buying. For example, will it be videos, art crafts, sports memorabilia, or other collector’s items?

Cryptocurrency Support.

Secondly, you need to consider the type of cryptocurrencies supported in the marketplace. For example, some NFT marketplaces support a wide variety of cryptocurrencies, while others utilize a specific proprietary currency.

When opening an NFT marketplace account, remember to fund your blockchain wallet with the right cryptocurrency or token required to participate in the site’s activity.

Upload Your File.

Congratulations, as you are now a step closer to creating your first NFT asset. To create your first NFT, kindly follow the step-by-step guide provided by your preferred marketplace to upload your digital files to their platform. That process will enable you to turn your digital files (a Jpeg, GIF, MP3, or other file types) into a marketable NFT.

Set Up The Sales Process.

How do you want to monetize your NFT assets? This is the final stage in the process of creating your NFTs. Depending on the platform, different sales options are possible:

  • Sell it at a fixed price: When you sell at a fixed price, you’ll allow the first person willing to meet that price to buy your NFT. 
  • Set a timed auction: A timed auction will give those interested in your NFT a time limit to submit their final bid. And remember to determine and set your minimum sales price.
  • Start an unlimited time auction: An unlimited time auction doesn’t set a time limit. Instead, you have control to end the auction whenever you want.

Examples Of NFT Marketplaces.

1. OpenSea.

OpenSea is a leading marketplace in NFT sales and has various digital assets available on its platform. And it’s free to sign up and browse its extensive offerings. It also supports artists and creators and has an easy-to-use process if you want to create (mint) your NFT.

The OpenSea marketplace supports more than 150 different payment tokens. For a beginner in the NFT business, OpenSea is a great place to start.

2. Axie Marketplace.

This marketplace is the online niche shop for the video game Axie Infinity. Axie Infinity is currently one of the most popular NFT games, and the Axie marketplace is where you can buy land, decorations, Axies, and other in-game items.

3. NBA Top Shot Marketplace.

NBA Top Shot is the National Basketball Association and Women’s National Basketball Association’s NFT marketplace that allows the purchase and sale of video clips, player cards and other sports collectables in the form of NFTs.

4. Rarible.

Rarible is a large marketplace for all sorts of NFTs, similar to OpenSea. It offers easy-to-use minting and trading features for NFTs. In addition, it boasts a dynamic ecosystem that houses a variety of digital items, including artworks, collectables, in-game assets, and much more.

5. SuperRare.

SuperRare is an exclusive NFT marketplace that deals only with a selected number of NFT artists. This marketplace is a leader in the exclusive NFT artworks niche with the mission to curate and preserves NFTs for posterity.

This marketplace platform has a careful vetting and approval mechanism before any new digital arts can be listed for sale and a transaction fee of around 15% on each primary sale.

6. Nifty Gateway.

Nifty Gateway is an Ethereum-based marketplace that makes it easy to buy, sell, and store digital art and collectables. Transactions on the Nifty Gateway platform can be carried out with fiat currency (e.g., US dollars) without making a cryptocurrency purchase first.

7. Mintable.

Another Ethereum-based NFT platform is Mintable. This offers various categories of NFTs that include art, game items, collectables, and music.

As an upcoming NFT collector or creator, you will need to purchase Ethereum cryptocurrency from any crypto exchange first. And after that, connect your wallet to Mintable to facilitate bidding and buying on the platform.

Benefits Of NFTs.

  1. NFTs provide a digital signature of authenticity and ownership held and verifiable on the blockchain ledger. This advantage makes it difficult for NFTs to be counterfeited.
  2. A new market and an opportunity to create wealth for virtually everyone has blossomed courtesy of NFT operations.
  3. NFT transactions generate significant efficiency with the application of smart contracts by streamlining processes and eliminating intermediaries together with their attendant costs.
  4. NFTs provide a vast potential for your financial investment portfolio diversification in a post-pandemic world like ours. And this is if you have the risk tolerance and liquid cash to invest.

FAQs On NFTs.

What Makes An NFT Valuable?

The property or item an NFT represents determines its value, which is generally something that exists in a digital format like digital art or memorabilia. Also, the rarity of the NFT itself means an increase in value in the marketplace.

Can I Invest In NFTs?

Yes, NFTs can be used as an investment instrument, as you can purchase an NFT and resell it with a higher profit margin. Certain NFT marketplaces even allow NFT sellers to gain royalties from their sold assets. However, a word of caution is in order here… Just like cryptocurrency investments, NFTs investments can experience high volatility. Therefore, you need to have a significant risk appetite to invest in them.

You can also read more on how to make money with NFTs here.

Where Can I Buy NFTs?

You can buy NFTs online through various marketplaces like OpenSea.

On a final note, do you still remember Baba Onilu, that got 500,000 from his NFT digital assets? So it happened that a serving National Youth Corps (NYSC) member in one of the western states in Nigeria, Adisa Olushile, took pictures of Baba drumming, sold them online as NFTs and gave the elderly drummer half the proceeds he made from the sales.

NFTs, like many other forms of blockchain technology applications and systems, impact lives and improve people’s social conditions worldwide. It is never too late to take advantage of the possibilities that non-fungible tokens offer you and your business. Take that step today! If you need any help positioning your business on the path of growth and profitability, sign-up for our upcoming Business Clinic Session here.

Share:

Facebook
Twitter
LinkedIn

2 thoughts on “NFT – All You Need To Know About Non-Fungible Tokens”

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Business Registration

Most Popular

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Related Posts

Cheapest Business Ideas To Start

10 Cheapest Business Ideas To Start In Nigeria

Nigeria’s heartbeat is its entrepreneurial spirit. In a country with endless opportunities, the concept of entrepreneurship is not just a path to personal success; it’s a necessity for national progress. We will be exploring the 10 cheapest business ideas you can start to contribute to the national growth of Nigeria.

Small Business Insurance

Small Business Insurance- Everything You Need To Know

Why does a small business need insurance? Imagine small business insurance as a safety net for your business. It is designed to catch you when unexpected events threaten to tumble your hard work into chaos. This form of insurance comprises various policies designed to provide a financial cushion against the

Power of Trading Signals

The Power of Trading Signals for Financial Market Success

Trading has long captured the hearts and minds of many entrepreneurs worldwide. It offers the opportunity to master the financial markets and capitalize on market movements within its hallowed walls. In today’s article, we will explore the modern tools that assist traders in making potential profits, delving deeper into the

Types of small business insurance

Types of Small Business Insurance Every Business Should Know

Starting a new business is a big deal. It’s exciting and full of possibilities. To move forward confidently, it’s crucial to know about the types of small business insurance that protect your work from costs that unexpected events, like legal issues, damage, or business interruptions, might cause. This article will

Scroll to Top

Join Entrepreneurs Family!

Get access to FREE business insights and funding opportunities daily.

Entrepreneurs Sign Up