Have you heard about the latest craze to hit the digital currency world yet? Known as non-fungible tokens or NFTs, these digital assets are taking the internet by storm for many different reasons.
Unlike tokens such as Bitcoin (BTC) and Ethereum (ETH), NFTs are verifiably unique and indivisible. In other words, their value is related to their scarcity. What's more, NFTs can be used to represent both tangible and intangible things.
Are you intrigued yet? If so, keep reading as we break down how to buy an NFT, where you can buy an NFT, and why you should consider adding them to your crypto assets.
There are countless exciting benefits of owning non-fungible tokens. But before we dive into ownership benefits, let's take a closer look at what these digital assets are and why they matter. Also known as Crypto Collectibles and Niftys, NFTs have risen in recent years to a place of prominence as eclectic, inspired, and dynamic digital assets.
They get traded on a variety of different blockchains. Nevertheless, the WAX Blockchain remains the most active for Nifty transactions today. NFTs may represent many different things, including digital collectibles such as in-game tokens, artwork, and music.
Among the first non-fungible tokens were the CryptoKitties collectibles. These blockchain-based digital kitten collectibles are each unique. That means if you send a CryptoKitty to an individual, and they send you one in return, the "kitties" will be completely different.
What's the point of collecting CryptoKitties? The chance to amass different digital kittens.
The unique information on a non-fungible token such as a CryptoKitty is stored in its smart contract. This smart contract gets immutably recorded on that token's blockchain.
How did CryptoKitties originally launch? As ERC-721 tokens on the Ethereum blockchain on platforms such as Decentraland and CryptoKitties.
That said, these NFTs have since migrated to their own blockchain, known as Flow. Since the transition, Flow has proven more intuitive and streamlined, especially for beginning NFT investors.
Of course, NFTs are also created on other smart contract-enabled blockchains using NFT tools and support. Although Ethereum remains widely used for NFTs, others such as EOS, NEO, and TRON now have standards.
What are some of the most popular examples of Crypto Collectibles out there today? Here's what's trending on Nifty marketplaces at the moment:
You can see that besides CryptoKitties, a variety of vibrant Crypto Collectibles awaits you on NFT marketplaces today. For example, Topp's "Garbage Pail Kids" trading cards are the reimagined 1980s version of the iconic cult classic.
Legendary actor, William Shatner, is also a favorite of the Niftys. Shatner-inspired NFTs came with the actor's release of personal memorabilia to the public. These collectibles were then remastered as digital trading cards.
An original trading card series, Blockchain Heroes showcases the likenesses of personalities in the blockchain and crypto spaces. These digital collectibles offer parodies of the Reddit vs Wall Street Gamestop incident on the blockchain.
As for Prospectors? This popular blockchain-based game permits players to earn Crypto Collectibles based on their performance in the game. Last August, Prospectors enjoyed its first anniversary with a giveaway of 15 Golden Anniversary NFT card packs.
Winners of the giveaway received one pack of each of these Golden Anniversary cards. The pack included three mint limited edition NFTs on the EOS network, representing the first set of its kind for the dapp game.
NFT digital assets contain identifying information recorded via smart contracts. This identifying information makes each NFT one-of-a-kind. As a result, NFTs can't be exchanged on a one-to-one ratio.
Why can't they be swapped like for like? Because no two NFTs are the same. In contrast, everything from cryptocurrencies to banknotes can be exchanged one for another. For example, two one-dollar bills are considered the same, with no difference between holders.
The same goes for cryptos. Sure, you can send someone one Ethereum token, and they can send you another Ethereum coin. But you'll still end up with one unit of Ethereum at the end of the day.
The Ethereum coin's value may have changed slightly along the way, but both tokens will always retain an equivalent value. In other words, these coins are fungible. For this reason, they may also be divided into smaller units, as you might see with a Bitcoin split into satoshis.
But NFTs are more than unique. They're also non-divisible.
In other words, like a movie ticket, NFTs can't be divided into smaller valuable parts. After all, if you cut up a movie theater ticket, its composite parts have no value and are not redeemable.
Why do people buy NFTs? For a wide variety of reasons.
Some see them as collectible investments, while others appreciate the rarity and creativity that goes into each one. NFTs and the smart contracts accompanying them permit the addition of detailed attributes.
These attributes include:
Each of these features lets you prove the digital ownership of an NFT. This tech marks an essential evolution in an increasingly electronic-dominated age.
How did this concept come into being? The creators of the first NFTs recognized the promise of trustless security applied to the exchange or ownership of almost any asset.
What's the challenge of NFTs, smart contracts, their protocols, and blockchain? The tech supporting them remains in development.
As a result, designing decentralized platforms and applications to create and manage NFTs proves relatively complicated. What's more, creators continue to struggle with establishing a standard.
After all, blockchain development remains fragmented, with countless developers working independently on projects. While this ecosystem has cultivated immense innovation and freedom, it makes developing interoperability and unified protocols tricky.
Where can you buy an NFT? You can purchase them via many different NFT marketplaces, including Enjin Marketplace, OpenSea, and Rarible.
How do you buy an NFT? Let's take a closer look at how to purchase NFTs through Rarible, one of the most popular NFT marketplaces in the industry today.
To get started, visit the Rarible platform, and click on the "Connect" button located in the top right-hand corner. Choose the wallet you'd like to connect to the website and accept the terms of service.
Once you've completed these steps, log into the platform and begin exploring available NFTs.
Which wallet should you choose to use? That will depend on your personal preferences. That said, you'll have a variety of options with Rarible, including:
With a wallet selected and connected, find an NFT you'd like to purchase. (Make sure that any NFTs you're considering are available for outright purchase.) Once you find an NFT you've got to have, click the "Buy Now" button.
At this point, a confirmation window should appear, permitting you to review the order details. Once you've double-checked the order, hit the "Proceed to Payment" option.
From there, you'll be prompted to confirm the transaction so that it processes. After confirmation, the NFT you've purchased will get deposited into your Ethereum address. Voilà, you now own this asset!
For the best buying experience, we recommend making purchases during off-peak hours. That way, you can avoid unnecessarily high gas fees.
What can you ultimately do with Crypto Collectibles? Because they're on a blockchain, you'll enjoy plenty of flexibility and possibilities. Choices include:
As you can see, NFTs offer exciting monetization opportunities for collectors and brands. They're provably authentic, encompass many types of artwork and branding opportunities, and are safe to trade. Best of all, they're a fun way to dip your toes into crypto collecting.
As you can see, getting started with an NFT marketplace is easier than you think. What's more, the number of Nifty marketplaces continues to grow, which means it's never been easier to start your own crypto collection.
Besides purchasing NFTs outright through a marketplace, you can also acquire them by interacting with a dApp or playing specific games. Or you can have them traded to you by someone else. Keep your eyes open for these opportunities, which will continue to grow with these digital assets' popularity.