The latest innovative trend that is changing how we see things is the NFT industry. So what is the big deal with these NFTs, and why are they so groundbreaking in terms of having people talk and think differently?
NFT Facts Myths & Truths
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1. What Exactly Are NFTs?
NFT stands for “non-fungible token,” which is a piece of data that is one of a kind. That essentially means that this particular data piece cannot be exchanged for an equivalent data piece because no such entity exists. This unit of data exists on the blockchain, a type of digital ledger used by those conducting digital currency transactions.
An easy example to look at is NFT art, which is basically buying digital artwork on the internet, but not just the standard variety. This digital artwork is marked with an entirely unique digital token certifying it as being “non-fungible” or in other words, an NFT. By purchasing this piece, the owner receives this digital token, certifying their authority of ownership.
NFTs are taking digital art and collectibles by storm. If Bitcoin is to be regarded as the world’s answer to a new type of currency, NFTs are the world’s digital equivalent of collectibles. Digital artists are seeing massive profitability from being able to sell their digital art to a whole new global audience through cryptocurrency.
2. NFT History
The first NFT was created in New York. It was crafted by Anil Dash and Kevin McCoy in May 2014 and was called Quantum. The NFT market quickly evolved and developed after that point of origin. These days, NFTs are generally used with and linked to certain media types. They can be used with video, audio, images, or other digital files.
The future of NFTs shows a potentially revolutionary manner in which people think about ownership of digital assets, securing and authenticating ownership of the purchasing party through its unique digital marker. That makes future digital sales secure and entirely legitimate. Digital artists are salivating for what NFT’s future holds, seeing it as a key to financial freedom and an opportunity to invest in their creativity.
3. NFTs Are One-Of-A-Kind Entities
When people talk about something being one-of-a-kind, few things exemplify this more than NFTs. But commonly adhering to the Ethereum token standard of ERC-721, every NFT that is minted can be verified as fully unique. Many people, including art collectors, are eager to pay big money for an acquisition that they can claim is the only one in the world of its kind.
Non-fungible tokens and digital items existed long before Dogecoin and NFTs became a modern crypto-craze. Several marketplaces already dealt with selling them. But NFTs have introduced a unique set of attributes that makes NFTs inarguably one of a kind. NFTs can therefore be used to mark the unique nature of any authenticated ownership of digital assets, virtual real estate, literature, recordings, and even pets.
4. NFTs Are Not Quite Like Cryptocurrencies, But In That, They Are More Special
NFTs are often compared to cryptocurrencies, but that is not quite an accurate comparison. Unlike Bitcoin, for instance, NFTs are individualized, and therefore, uniquely special. One Bitcoin will be equivalent to another Bitcoin. If the value goes up, it goes up for both coins, so if one was to trade one for another the value would remain unchanged. But that is not the case with NFTs.
An NFT is tagged with a digital signature, one that no other NFT could have. So if two NFTs were exchanged for each other, it is highly unlikely that the value of worth exchanged would be comparable. To use traditional art for comparison, imagine trading Leonardo Da Vinci’s original Mona Lisa for another painting. The Mona Lisa would hilariously dwarf the value of the exchange.
5. NFTs Are Highly Beneficial To Creatives In The Music And Film Industry
Many artists struggle to establish connections to parties interested in their art by themselves, but NFTs bring a unique benefit to creatives across many industries since their inception. Artists have a lot more reach and investment power with NFTs than they ever had. Take for instance American rock band Interpol. They released a limited series of 8 NFTs that they developed with filmmaker David Lynch. These were done as animated films accompanied by their music.
The art market can be very hard to penetrate. An artist often cannot get their art in front of enough eyes to win over potential buyers. But NFTs boost the power that has been dominated by only the artists that have many connections and widely established name recognition. NFTs make it easier for artists to reach a bigger platform of people.
6. NFTs Offer Profitable Investment Opportunities
NFTs have come to be regarded as moneymaking investments. Some have even compared the to a type of digital “gold rush”. For instance, NFT creations like Cryptopunk have wildly grown in value, blowing up by a stunning 71,000%, jumping from $1,646 to $11.8 million in just a handful of years.
Since most investors tend to jump on the investment bandwagon while the trends are hot, the potential to grow profits through investments in the NFT markets is enormous. Not only do the values of NFTs grow through cryptocurrency which increases in value regularly, but they also comprise a market that is outpacing many other industries in terms of growth.
In a year, NFT market growth expands by a shocking annual 18,000% growth, with the market and the NFT industry having generated a mind-bending $2.5 billion in sales during that time. Such massive growth translated into economic terms is representative of a healthy and thriving economic state. The industry reached $3.4 billion in sales just in early 2021. That means that NFT has not only bolstered the digital economy, but they have also put a much higher value on creativity than ever before.
7. Individual NFTs Have Sole For As Much As $70 Million
NFTs have created an investment goldmine. You have to look no further than the prices of today’s NFTs. The most prominent example of this is the NFT called Beeple’s “Everydays: The First 500 Days.” This is the most expensive piece of NFT art that has ever been sold for a gargantuan price of $69.3 million. The creator of this NFT was active from May 2007 to February 2021. With a lot of artwork to the artist’s name over time, it was decided to combine it all into one NFT.
The value of his original artwork grew immensely and rapidly, boosting its price to nearly 10 times the price of any single NFT that preceded it. Needless to say, the appeal of NFTs is robust, assuring that they are heading toward being extremely profitable as an immensely valuable art form.
8. NFTs Make You Money For Your Digital Artwork
Artists often struggle to make money. Part of it is the hardship of getting your work in front of a wide enough audience to capture interest, the other is that there is a limitation in terms of how much can be charged for the work to reasonably expect a purchase. But NFTs have turned this hardship around into opportunity and possibility, transforming the art sales market.
Selling digital art opens a lot of doors in terms of art sales. This is especially true when including the potential of selling digital art through NFTs which tag digital ownership more readily. This digital art will not only reach prospective buyers all over the world, but it can also garner higher sales through confidence, privacy, and security.
Through publishing their work through NFT forums, artists have found a much bigger market with lots more choices of potential buyers. All over the internet, bidding wars for NFT works are ongoing. Some of the artwork sold is surprising, especially in terms of how much it collected through NFT markets.
9. NFTs Can Be Expensive, But Are Quite Affordable In Reality
While it is true that some NFTs are worth exuberant amounts of money, many are quite reasonably priced. It is mostly that the NFTs that get talked about generally are expensive, but many are economically grounded and quite affordable. In fact, most NFTs can be purchased for under $200. The median price can be anywhere from $1 to $900. Some NFTs are one-of-a-kind pieces (not just due to their digital marker), and that is what makes them particularly expensive. Some artists generate a number of NFTs of the same sort, making them limited edition pieces. These are somewhat less expensive. Others are widely available for more limited pricing. So the overall cost depends on how rare the NFT is.
10. NFTs Have A Less Than Ideal Impact On The Environment
NFTs predominantly utilize the Ethereum network. Since Ethereum leverages thousands of distributed computing machines to perform the energy-intensive riddles needed to securely verify every transaction, it can obviously consume vast amounts of electricity. That means NFT development requires a high level of energy usage, making NFTs a challenge in terms of energy conservation. If standard art is a gas-efficient vehicle, NFTs are gas-guzzling beasts with insatiable appetites.
How much energy an average NFT consumes can vary in the NFT market. For instance, a printed art piece can produce an average of 2.5 kg of additional CO2 emissions, but the digital footprint in those same terms for minting and NFT is at times more than 100-fold. All of the energy usages is certainly anything but environmentally friendly.
11. NFTs Cannot Be Destroyed
Every piece of NFT data is stored in the blockchain, a secure ledger that prevents the tokens from being copied, removed, or destroyed once they are created. Once ownership of the NFT token is generated, it is permanent and individualized, meaning that owners or buyers of the NFT claim their rights, not the creators. Unlike music that you may buy from the iTunes store, the NFTs belong exclusively to you once the purchase transaction has been completed.
12. NFTs Are Very Popular In The Gaming Industry
NFT coins are widely accepted and utilized in the gaming industry due to their ability to solve particular problems in it. Game companies, for instance, often make use of NFTs to support development game enhancement, and production. Many popular game companies make frequent use of them. The investment potential of NFTs is fitting here because the characteristics can be easily and quickly transferred to be utilized in different games.
NFT Facts Myths & Truths, Conclusion:
In conclusion, NFTs have generated a lot of buzz in the art world, with many myths and truths surrounding them. Understanding these facts is important in order to fully grasp the potential and limitations of NFTs. We hope that this article has shed some light on the topic and helped you separate fact from fiction.
Now that you have a better understanding of NFTs, we invite you to continue exploring the world of cryptocurrency by reading our next article, “TOP 10 Shocking Bitcoin Myths and Truths.” In this article, we delve into the world of Bitcoin and explore some of the most common misconceptions about this popular cryptocurrency. Don’t miss out on the opportunity to expand your knowledge and stay ahead of the curve!
Frequently asked questions:
Where To Purchase Your First NFT?
The world’s largest and original NFT digital marketplace is OpenSea. Their library is ever-growing and stocked with exclusive digital items for purchase or sale.
What Does An NFT Look Like?
NFTs, or non-fungible tokens, are typically generated by the same type of programming as cryptocurrencies or by producing cryptographic assets through leveraging blockchain technology.
How Much Can NFT Artists Earn?
Most platforms allow the NFT seller to select the royalty tier that they would like to receive for every subsequent purchase of their work. In most situations, the royalties range from 5 to 10%. Once a purchase is made, the royalties are automatically paid out to the seller.
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