The digital market has opened new horizons to different forms of income and investment.
Among all of the new digital possibilities, we can only mention NFTs, digital objects certified by authenticity and originality that are sold on the web through blockchain networks. These have achieved considerable success in a short time, enhanced by the recent pandemic.
The specific nature of any NFT store may not be entirely clear to those approaching this world for the first time. For this reason, we at Sandmilk decided to create this article to explain clearly and simply the functioning of an NFT store.
What is NFT?
NFT stands for non-fungible tokens. It is difficult to understand the concept of NFT and the concept behind their functioning, but Sandmilk stays up to date, and to do so it could be useful to start from the definition of fungible and non-fungible.
We speak of a fungible object, whether this is an element of the digital world or even something material when we consider something that can be exchanged because it is not unique. To give a classic example, it is useful to think of a $10 banknote that we can find very easily. It can be exchanged for another $10 banknote or even exchanged for two $5 banknotes. The serial number will have changed, but its value is the same since we will always have the equivalent of $10 in our wallet.
By non-fungible, we, at Sandmilk, mean instead something original and unique, something that cannot be exchanged. Here, to give a practical example, it is possible to use a painting. In fact, it is no coincidence that the art section is the most flourishing in the NFT store. A picture is a unique and original piece of art, something that the artist has created and which will remain his property until it is sold. It will also be possible to make pictures in series, which can be apparently identical to each other. In reality, each one will have a particularity that distinguishes it, even if it is a small brushstroke. In the world of NFTs, the originality we are talking about is given by a string code that is digitally inserted into the object, which can be graphic or text.
How Did NFTs Become Famous?
In 2021, Christie’s auction house sold the first-ever NFT artwork. It was a collage of images by digital artist Beeple, which sold for a whopping $ 69.3 million.
From that point forward, NFTs have suddenly caught the world’s attention. The growth in the turnover of this market reflects the exaltation of the last few months. And already now NFT platforms have become quite popular and attract more and more fans of crypto payments.
How Do NFTs Work?
NFTs are used to uniquely link a real property to a cryptographic asset. In this way, with the sale of the token, the real owner of the object is sold. The aim is to remove any middlemen from transactions as anyone can safely buy and sell a digital item.
NFT technology considerably reduces the chances of fraud and increases market effectiveness as conversion times are reduced. All these characteristics allow the creation of new markets and new forms of investment.
Why Invest in NFTs
Investing in NFT is now the very evolution of the concept of investment. Those who choose NFTs are often not new to this world and have probably only chosen to move from the offline to the online world.
In fact, with digitalization, common thinking has been revolutionized and it is not difficult to find the online transfer of various products and services, including NFTs.
The purpose that drives investment in NFT is personal, many do so aware of the ever-higher increase of this new project. It is not rare that some choose to enter this world to make room for new artists. Investing in NFTs can in fact open up a new marketplace and the scouting of new artists.
Where to Find NFTs for Sale and How to Buy Them?
Unlike traditional e-commerce sites on which Internet users buy goods and receive them at home, any NFT store makes it possible to buy a property right on a work or a unique virtual object. This certificate is recorded in a blockchain and kept in a dematerialized way. In other words, do not expect the delivery of an object or a work of art to exhibit at home. Everything is virtual.
Many of these marketplaces operate on the Ethereum network. Thus, the same NFT can be offered for sale on several platforms, a little as if the works exhibited in a single art gallery were visible from several showcases.
Sales are made at a fixed price or through auctions that often last several days. Each NFT is presented in the form of a “product sheet”, similar to any catalog. Its title is accompanied by the visual, a description, its main characteristics, and its price. Payment is made using cryptocurrencies.
What are the Features of an NFT Marketplace?
After creating an account on an NFT marketplace, you have the possibility to:
- Create NFTs: NFT marketplaces are not designed to perform graphic design. But it is possible to download creation in many formats (PNG, MP4, MP3, GIF, SVG, or even WEBP).
- Selling NFTs: You can sell digital works through auctions, bids from buyers, or buy-it-now. To sell NFTs, you will first need to integrate your NFTs into your Ethereum wallet.
- Buy NFTs: You can invest in NFTs if you own Ether, the native cryptocurrency of the Ethereum network, which you can acquire through your cryptocurrency wallet. Go to the page of the desired work to bid or buy it. Each work has its dedicated page to list its characteristics, but also its history.
- Customize your profile: On an NFT marketplace, you can add your location, and social networks, create and exhibit collections, and list creations. You can follow artists and be followed by other users.