We have been hearing a ton about NFT these past few months especially. But what is an NFT? That is the million dollar question. Recently, the highest NFT sold, also known as CryptoPunk, which is the original NFT collection that started back in 2017 when much of the world was just beginning its infatuation with Bitcoin. The sale transacted for a whooping USD$532 million, but what’s even more insane is that the buyer and seller are the same person. How does that even work? Lets not get into that yet. For a better overview, the largest legitimate sale for CryptoPunk was at a high of USD$11.7 million. Ah, to be rich, am I right?
So what is NFT? In short, NFT is a Non-fungible token. Essentially, it is a digital asset that is mostly bought and sold online, frequently with cryptocurrency and are generally encoded with the same underlying software as many cryptocurrencies. The most widely used cryptocurrency is Ethereum (ETH) and the common platform used worldwide is called OpenSea.io. So, instead of buying and selling a physical product using cash or contactless payment, NFT is similar in that sense, just that it is intangible, and transacted via crypto mostly ETH.
Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. This also means they have an equal value, meaning one dollar is always worth another dollar, and one Bitcoin is always equal to another Bitcoin. NFTs on the other hand, are different. Each NFT has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another, therefore non-fungible. It is one of a kind, also a digital scarcity. The rarer the NFT, the more valuable it is. So, what is NFT actually used for?
What is the purpose of a NFT?
NFTs have been around since 2014, but gaining traction now because they are becoming an increasingly popular way to buy and sell digital artwork. The purpose of a NFT is to provide a mean or opportunity for content creators to make money. For instance, the artists do not have to solely rely on galleries or auctions to sell their art or gain exposure. They can alternatively leverage on the NFT hype, and sell it to buyers interested, with way more profits. Of course, art is not the only way to make money with NFTs. There are many various NFTs, which can be tangible and non-tangible such as but not limited to GIFs, videos and sports highlights, collectibles, virtual avatars and video game skins, designer sneakers and music.
In an overview, NFTs are like collectors items, only in a digital format. Instead of physically owning it, it is reflected as a digital file. Some may then ask, what is the difference between simply saving a picture of that NFT vs actually owning it? Well indeed, it is a question frequently asked, so let us walk through this together.
Basically, the NFT purchased is solely owned by the buyer – meaning he or she will have the ownership rights to that NFT. NFTs can have only one owner at a time. NFTs’ unique data makes it easy to verify their ownership and transfer tokens between owners. So, if you are not the owner, sorry, you’re simply just a fan! Plus, collectors value those “digital bragging rights” almost more than the item itself. We are living in the flex culture after all, “if you have it, flaunt it kind of thing”
Can anyone purchase an NFT?
Well, safe to say, yes. Anyone can purchase an NFT, as long as they have the money for that particular NFT. NFT after all, are not cheap at all. You might find something within the lower range, but also, if you purchase it, the next thing on your mind will be: will it be valuable in the future? NFT involves a ton of speculation hence why it is very high risk. It is always important to remember that, anything with potential high rewards involves high risks. We all know that. Thus, proceed with cautious when buying, and understand comprehensively first before jumping into it. Also keep in mind that an NFT’s value is based entirely on what someone else is willing to pay for it. Economics right? As long as there is demand, it will drive up the value of something. So, the scarcer your NFT, the more value it holds.
There are also many platforms to explore and purchase the NFTs. Unfortunately, some artists have fallen victim to impersonators who have listed and sold their work without their permission. Due diligence is imperative in this area. We live in a digital world where a lot of people are able to easily scam others. Of course, we have also noted on the success of artists who already made millions in this market, such as the stories below:
- 12 year old Benyamin Ahmed, a coder set to make $400,000 from selling NFTs just after 2 months! Whilst most of us are hustling and committed to our 9-5 jobs, this 12 year old is living our dream. Jokes aside, NFTs can be a make it or break it deal for people. We have seen success stories, we have heard of people getting scammed. But if you would like to see the positivity and opportunity from this, keep reading!
- 14-year-old Abigail learned about cryptocurrency when she was just 9 years old. At 14, she managed to transfer her Solana collections of NFTs to raise $100,000 for a mission she holds onto dearly, which is for Beluga Whale Conservation.
So many young talents with bright future awaits us. Of course, it is also scary to think that adults like us are falling behind Generation Z! Of course, these are really promising talents, and it is definitely and inspiration for us all. I am totally pumped to explore NFTs even further now, more than ever. Life is after all, a constant evolution of change. We must adapt and learn to constantly be ahead of the game.
Should I get started on owning an NFT then?
The main question to ask yourself is, what does owning an NFT provide you with? Whatever your reasons, as long as you proceed with caution and due diligence, go ahead! Owning an NFT can value add to your investment portfolio. There is no harm getting started, as long as you understand the risks involved! It may be worth investing in small amounts, and grow your portfolio after getting the hang of it!
In other words, investing in NFTs is a largely personal decision. If you have money to spare, it may be worth considering, especially if a piece holds meaning for you. As mentioned previously, the value of the NFT is based entirely on what someone else is willing to pay for it. Of course, it also depends on the demand, the scarcity of the NFT, which will drive the price further.
On the other hand, an NFT may be sold for less than what you purchased as well. Worst case scenario, it may not even be able to resell it at all if no one wants it. It is vital that you understand that you may even lose everything. Hence, if you are able to part ways with that money, then you are good to go! Life is all about taking chances anyway, right? But if you doubt the investment will be worth anything, maybe do more research first before taking the plunge. Do not simply jump just because others are doing so too.
Conclusion
It is not a stretch to say that just like blockchain and crypto, NFTs will be very much integrated in our daily lives in the next few decades. It took crypto nearly a decade to really penetrate the mainstream, but NFTs only needed a couple of years to capture people’s attention. As brands like Budweiser, Visa, and Adidas have purchased NFTs and entered the space, it’s clear that NFTs are more than just another hot new trend. Many celebrities are also jumping into this space such as DJ Khalid, Professor from popular TV series Money Heist, and many more.
There is definitely much more to learn about NFTs and how it will evolve in the future. Digital is the way ahead!
Learn more about NFTs & Crypto
For as long as we can remember, the stock market has been one of the greatest wealth creators globally. That is, until NFTs and blockchain came along. Eye-popping returns are making it difficult for even hardened NFTs sceptics not to consider putting money into it.
This 3 hour power workshop: Understanding the Craze behind Non-Fungible Tokens (NFTs) & Cryptocurrencies (Virtual) conducted by EXPERT Shaun Sung, will help answer your burning questions on what’s next for NFTs and blockchain! We’ll start with the basics like the history of NFTs, what exactly is an NFT, how it benefits the public in various ways, and possible future applications of the technology. He will then briefly run through how to Purchase NFTs, what does the technology mean for creators, artists, brands and collectors today. Lastly, we’ll then address the elephants in the room by discussing if these duo will ever reach critical mass and end off with why institutions are getting involved and whether this ground will ever get regulated and how.
If you are psyched to get started on the NFT journey, you can get in touch with us at (65) 6720 3333 or training.aventis@gmail.com
References
What You Need To Know About Non-Fungible Tokens (NFTs)
What are NFTs? Mapping the NFT Ecosystem
The CryptoPunk NFT that sold for $532 million. Sort of
