What is an NFT?
An NFT (Non-Fungible Token) is a unique and non-interchangeable asset stored on a blockchain (digital ledger). It uses this blockchain technology to show proof of ownership. They can be in the form of art, music, games, videos and even memes. They are so versatile that they can even represent other forms of creative work such as virtual land, video games, fashion and much more. You can buy NFT's using cryptocurrencies like Etheruem ( the most popular one), Solana, Cardano and more. NFT's are usually sold in a collection like the Bored Ape Yacht Club NFT collection or CryptoPunks. Also, for your information, a Bored Ape Yacht Club NFT was sold today for 51 ETH ($220,000), so you may want to give NFTs a shot.
Why do some NFTs sell at such high prices?
Well, there are many reasons why NFTs can sell at such high prices. We'll take the example of the Bored Ape Yacht Club NFT. When you buy this NFT there is a lot of utility that you receive other than just the artwork. By holding this NFT you are provided with remarkable perks, exclusive access to some of the most exclusive events across the world and so you are in a community of high net-worth individuals. It's no surprise when you see celebrities like DJ Khaled, Jimmy Fallon, Post Malone and Stephen Curry buying these NFTs. Other reasons why people pay so much for NFTs could include appreciation for the art or some other utility that they get which may increase its value in the future. Also, remember that the price at which an NFT is sold depends on how much the buyer would be willing to pay for it and so it's different from trading cryptocurrencies that you can instantly buy or sell.
How do I get into NFT's?
Firstly, you will need a digital wallet to store whichever cryptocurrency you want to buy your NFT with. MetaMask is popularly used to store your NFTs and your cryptocurrencies like Ethereum. You can buy cryptocurrencies from exchanges like Binance, Coinbase, CoinDCX, WazirX and send them to your MetaMask wallet. There are typically two ways to buy NFT's. The first way is through 'minting' where you buy the NFT directly from the artists who create it. The second way is through the secondary markets like OpenSea or Rarible where you buy it from other users who have already minted the NFT or bought it from someone else. Other ways to get NFT's are through giveaways, airdrops, etc.
Tune in to our next post where we will show you how to find valuable NFTs and potentially sell them for a profit.