NFT guide

NFTs and Cryptocurrencies: the Ultimate Guide to Understanding Crypto NFTs

NFTs appeared in 2012 (with the Colored Coins project, then later with other projects such as Counterparty, Etherbots, Age of Chains and Rare Pepes, Cryptokitties, Cryptopunks…), and have skyrocketed since the late 2020’s all over the world.

What are we really talking about?

What is it used for?

Is it a craze or a true revolution?

Do they have a real value or is it a trend that will fade away as fast as Gangnam style?

Understanding NFTs, the virtual tokens

Our lives are increasingly dominated by digital technology, and NFTs are seen as the latest trend in cryptocurrency (along with Defi or decentralized finance). Its success translates into record sales in early 2021. NFT which translates to “non-fungible token” is a new kind of technology suddenly thrust into the spotlight. It represents an appealing concept that can earn millions for some artists.

What is an NFT, definition (or Non-fungible token)?

High profile individuals are interested in NFTs. This is the case of Twitter’s CEO or Elon Musk, the founder of Tesla. NFTs have broken records in the first quarter of 2021. These tokens are tamper-proof and transit through the blockchain. They are revolutionizing the way we think about digital assets and online ownership.

The notion of fungibility

NFT is an acronym for “Non Fungible Token”. This digital token can be a piece of digital art, music, a collector’s item or even a tweet.

This technology creates rarity in the digital world, which has been driven by copying until now.

These digital files have a usage value and a historical value. This is how the founder of Twitter sold his first tweet.

The unique feature of the token is that it is non-fungible, meaning that it has a unique nature and characteristics.

It cannot be replaced by another token. A token is considered fungible when it can be replaced by another one of the same nature (1 Bitcoin can be replaced by another, there is no difference. Each NFT is different and unique).

For example, cryptocurrencies are considered fungible tokens, just like a dollar bill.

Blockchain’s role

An NFT token is made non-fungible by a certificate of authenticity assigned by the blockchain. It is a tamper-proof digital property. The blockchain serves as a vast platform for data storage and information exchange. The exchanged data is transparent and secured by a global and decentralized system, which prevents any manipulation or hacking.

This storage technology works without the need for a controlling body.

The creator of an NFT can then encode it on the blockchain to make its characteristics unique.

The blockchain stores all the information about contracts, transactions or property titles. The cryptographic processes used by this technology make NFTs unforgeable and unique.

This technology allows to make a digital object unique, for the first time in history.

The role of cryptocurrency in NFTs

NFTs are non-fungible tokens that can be purchased through well-known digital currencies such as ethereum or wax.

Using an exchange platform like Coinbase or Binance is required to buy cryptocurrencies before acquiring NFTs. On the other hand, there are specialized digital art platforms like Nifty Gateway where users can make transactions in dollars.

How does it work?

It may seem a bit confusing at first.

NFTs primarily rely on the Ethereum blockchain.

This allows for the safe verification of all transactions (buying, selling, trading).

There are many websites or platforms to find NFTs and buy them. We talk about it in this article 😉

What is the difference between NFTs?

Non-fungible tokens “NFTs” appeared in 2017. They were introduced in the midst of a speculative bubble on cryptocurrencies. At the time, cryptokitties were the center of attention while the value of bitcoin was still $20,000.

The first crypto kitty sold that year was valued at over $117,000. It works the same way as the Panini albums did in its time. The distinctive feature of the Kitty was the presence of an NFT crypto which allowed to prove that it was unique.

Piece of digital art

A new paradigm in art?

The hype around NFTs reflects a new way of consuming art through cryptography. In fact, this new paradigm allows us not only to consume it, but also to collect it.

Potential buyers are ready to pay high prices for their favorite digital works and thus show that they own them. A new art market is being created before our eyes.

When buyer acquire an NFT, they don’t get the original work, but a copy of it located on the blockchain. The buyer is not the owner of the work of art. He doesn’t own the economic rights and can’t exploit it for commercial purposes.

NFT’s impact on the art market

According to analysts, NFT’s growth is not just a fad. It’s a true revolution that is impacting the art and collecting markets. The emergence of NFTs demonstrates the importance of being able to prove ownership of an object, whether it is physical or digital.

According to popular opinion, art is considered as something “beautiful” and cultural. But it is also a financial product which attracts a lot of investors. This is also the case with NFT cryptocurrencies.

Anyone can access a CryptoKitty and save the file on their computer. However, only one person is the actual owner and can prove it.

The NFT market has grown up to 300% in 2020 despite the global pandemic. The trade volume reached $250 million. Numbers are still exploding in 2021.

Auction houses quickly understood the scale of the NFT craze. The prestigious auction house, Christie’s, sold 5000 digital illustrations by the artist Beeple. Records are being broken everyday with NFTs. One of the most popular artists in this new cryptographic art era, managed to sell one of his collections at a value of $777,000.

1 NFT creation by the artist Beeple

A promising market for artists

NFTs are currently enjoying a favorable, even exceptional context. As a matter of fact, the cryptocurrency market is riding on a positive momentum in the last few months. The biggest crypto-currency investors own the equivalent of more than a billion dollars. The profits made by these investors are partly channeled into digital art. While the old rich put their money on Picassos and Monets, the new digital rich are investing in NFTs.

This new concept benefits artists as well. The digitalization of art has removed the need for intermediaries. Physical sales are still crucial to the survival of art. In most cases, intermediaries take a share of the sold works. Digital artists no longer need intermediaries. All they need is an Ethereum wallet to sell their art on specialized platforms.

Protecting one’s artistic works with NFT’s

A platform allows you to protect your artworks through blockhain technology and cryptocurrencies.  HUP market is a marketplace that allows artists to certify their works, locate copies on the internet and sell licenses and copyrights.

HUP market, a marketplace for artworks

NFTs in the collectibles market

The world of collectors is full of NFT projects. You can now collect unique digital objects relating to Star Wars, Marvel, Disney, soccer, the NBA, and soon Pokemon or Formula 1.

The development of NFT will allow many enthusiasts to exchange digital products and create collections of things they feel passionate about. They will be able to exchange them, make them interact in a virtual world and in the real world, eventually.

The unique NFT soccer cards from Sorare

Veefriends by entrepreneur Gary Vaynerchuk.

Veefriends. This unique collection of 10255 cards gives access to a conference, meetings with the entrepreneur and his team, but also a number of other options depending on the purchased tokens.

The Veefriends token project

The Veve collectibles project

This platform, launched by former big brands, offers NFTs of brands such as Marvel, DC or Ghostbusters. It negotiates the rights with brands to offer digital products bearing their image. The project quickly became a worldwide success!

Find it here.

The 2 NFT Wikipedias for collectibles

I recently discovered 2 websites that share information and volume ratings on NFT collectibles. This allows you to know what’s “in” right now, which projects are blowing up, which ones are starting up or which ones offer Airdrops (some items are offered to the community).

Click here for Nonfugible.com.
Click here to go to Cryptoslam.

Cryptoslam, NFT’s wikipedia

NFTs in virtual real estate

You can now prove you own a house in a virtual game.

You can buy it, sell it, exchange it, etc…

This is the concept offered by Decentraland’s virtual world.

One can only imagine the huge opportunities to come!

NFTs in the music industry

The crisis affecting record sales has deeply changed the music industry. Artists have to fall back on live music to earn their living (not easy during a pandemic).

Streaming platforms still don’t pay artists properly for their music.

Artists have to find other sources of income.

Why not NFTs? It’s only logical, since they are instantly profitable; they are a classic sale but in a digital form, like selling a numbered vinyl directly to a buyer. Buying tokens requires going through an intermediary, such as OpenSea, which only receives a 2.5% commission on sales.

Snoop Dogg recently joined this market, and many other artists will follow.

How do NFTs work?

The way NFTs work depends on their original platform. Ethereum is the main cryptocurrency used to buy/sell NFTs.

There are no regulatory authorities on this market. Anyone can create or buy crypto NFTs. An NFT works like a trading card.

Trading and buying NFTs is similar to trading cryptocurrencies on Ethereum. However, transactions are carried out on its own platform. The user must then install a free extension like Metamask. The user can acquire NFTs once the extension is installed on the browser.

When users find an interesting offer on a website or find a potential buyer, they can connect directly to their Metamask wallet to complete the transactions.

Where to buy NFTs?

The art market is a very codified universe. It’s also a subjective market where individual taste prevails. There are two types of markets today.

The primary market is where a work is sold for the first time. A subsequent resale is done on the secondary market. Superrare dominates the primary market with respect to volume.

Opensea
Rarible

How to create and sell NFTs?

You can also create and sell your own NFT creations (music, art, collections, etc…)

To do so, go to rarible.com and click on “create” in the top right.

Then follow the instructions and get started 😉

NFT projects to follow

Here are some of the most promising NFT projects today:

Cryptopunks

Cryptopunks combines several concepts together. First, it is a non-fungible token or NFT. Cryptopunks offer collectors over 10,000 unique characters on the Ethereum blockchain. This 24X24 pixel digital file is also known as “crypto art”. Each picture represents a human being with a punk look. Earlier this year, a collector bought a cryptopunk for $750,000 or 605 Ethereum.

OpenSea

This platform is dedicated to NFT digital art. It is one of the major players in this market. NFT collectors and artists can add their catalog on the platform, creating their own online store for free.

The platform allows you to buy NFTs directly or to participate in auctions with other buyers. Before buying a token, the buyer can see all the information related to the NFT, such as the seller, the work’s characteristics and history, etc.

The success of the platform is such that it is now considered as the Amazon or eBay of non-fungible tokens. Sales were estimated at 95 million at the beginning of the year.

Sorare, the soccer NFT (new generation Panini)

Sorare combines several concepts, including blockchain, cryptocurrencies and soccer.

This online soccer game was created in 2019 by a French company. Their pioneering service attracts not only the biggest investors, but also soccer enthusiasts. The concept is similar to the Panini albums of our childhood.

Sorare NFT soccer cards

This game allows you to create a virtual team by buying/exchanging player cards. Your team’s performance depends on the performance of the players in reality.

You can earn points and invest in more cards.

Many players sell their cards and make very nice deals too.

A small gift for you if you sign up for free using this link 😉

Candy, Baseball’s NFT

More and more sports are getting involved with Non fungible tokens in order to appeal to their fans.

The American National Baseball League is also joining in by partnering with Candy.

Baseball fans can collect unique digital baseball objects.

Candy Baseball NFT

Candy Baseball, digital baseball collectibles

Official Capcom Street Fighter NFT cards collection

Capcom, the famous creator of the mythical game Street fighter, released beautiful NFT digital trading cards to collect.

You can get Chun-li or Blanka and later use them in Capcom video games!

Check out licensed content by Capcom here!

I collect Chun-li cards, my favorite character. Check it out here.

Gaming: Video games and NFTs

Many video games work with or through NFTs.

Some examples:

My Defi Pet

Decentraland

Axie Infinity

Etherbots

How to store your NFTs?

If you want to store your NFTs, whether it’s art, music or a collectible, you can do so on the Trust Wallet App or on Metamask. Your NFT will safely be stored at an address, just like other blockchain tokens.

Of course, you should always be careful to keep your public and private addresses safe.

Binance launches its NFT exchange platform

In June 2021, Binance, one of the world’s leading cryptocurrency exchange platform, launched its NFT buying/selling/exchanging platform.

The platform is designed for artists (music, art…) and centralizes the economy around non-fungible tokens.

Available here.

How to easily share all your NFT on social media?

Mark Cuban, the famous American billionaire and entrepreneur owns an increasing number of NFTs.

As the owner of an NBA franchise, he is a big believer in this concept.

With his team, he launched the website https://lazy.com.

This website allows you to easily display all your NFT’s and creates a link that you can share on your social media (Twitter, Instagram, Facebook…)

Which NFT should you invest in?

The question is often asked from an investment perspective.

What to invest in?

Here are my tips: Content protected

Conclusion

NFTs are bringing something never seen before: scarcity in the digital world.

It will definitely allow great things to happen.

However, there will also be profiteers, as in any market.

Some NFTs will eventually be worth nothing at all.

If you invest or get things that people will want to own, you will have something that matters.

For artists, this technology offers new ways to earn money without the need for a middleman!

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