Get to Know What is NFT and How It Works

What is NFT – Want to know what is NFT? In fact, non-fungible tokens (NFT) are an increasingly popular type of digital asset. From art, food to rare tweets. This one object is predicted to be the cause of the influence of a new phenomenon among young investors.

According to the Coindesk website, NFT revenue alone has reached $174 million since November 2017. This is pretty cool, right? Well, actually, what does NFT mean? Is it worth it’s popularity? Here’s the explanation for Sinaumed’s .

What are NFTs?

Before discussing how it works, you need to check what NFT has first. On the “Forbes Management” page, NFTs are referred to as digital assets that represent real-world objects such as paintings, music, game items , to short videos.

Digital assets are bought and sold online, usually paid for using cryptocurrency , which has been encoded using other crypto assets and underlying software. Since 2014, NFTs are now popular because they are considered a practical way to buy digital graphics.

NFTs are usually evaluated as one of the very limited trading processes and have their own identification code.

Through this NFT, you can see the digital jobs that everyone is selling. Please note that there are no brands in this NFT. This happens because the NFT is authorized by the purchaser to the original element. Not only NFTs, but also congenital certifications that serve as certifications for titles are also included.

 NFT Working Method

NFTs are part of the blockchain. Therefore, NFT buyers can prove that they are the sole owner of the assets they are purchasing. No one can revoke the NFT buyer’s ownership after it has been paid.

NFT is also a digital asset that cannot be duplicated again and again. The buyer’s NFT is unique and can be proven by proof of purchase on the cryptocurrency blockchain. For example, a tweet from Twitter CEO Jack Dorsey was auctioned off as NFT and sold for $2.9 million. Though, anyone can take a screenshot and own the tweet.

However, it can only be sold by Jack Dorsey and NFT buyers. To be tradable, NFTs must go through the NFT printing process.

Then, what is the NFT embossing process ? It is the process of converting digital files into crypto collections or assets on the blockchain , as expressed by Ethereum. This process requires a third-party marketplace or printing agency such as Open Sea, MakersPace, Mintable,  and The Drop.

The difference between NFT and Cryptocurrency

After reading the definition of what an NFT is, you might think it is an asset like cryptocurrency . Though, the two are not the same. Why?

According to the Asia One website, the main difference between NFTs and cryptocurrencies lies in the word “replaceable”. What are NFT “replaceable” objects? This term actually means exchangeable for goods of the same value.

For example, you can pay for a $10 asset with two $5 assets. Apart from that, you can also exchange 1 Bitcoin for 1 Bitcoin item. Not only that, the goals between the two are also different. When you buy cryptocurrency , you are basically exchanging currency like a money changer. For example, buy one Ethereum for $2,840, then later you can save it until one day the price of Ethereum goes up and sell it right away.

On the other hand, all non-fungible tokens like smartphones have certain IMEI, specifications and features that make them unique. It is these aspects that make NFTs to be called assets rather than cryptocurrencies.

Examples of Using NFTs

As previously explained, NFTs are blockchain- based digital assets that can represent certain objects such as paintings and other properties. This is considered to be one of the best ways to buy and sell digital assets, as NFTs provide certificates of ownership that only buyers and sellers can access.

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Based on this, NFT has been applied to many industries from business to arts. Here are some examples.

  • NFTs in Arts 

NFT is known as one of the latest technologies currently booming in the art world. This is true because its characteristics and uniqueness have re-evaluated the digital arts sector. NFT itself provides security for works published online. For foreigners, content distributed online is usually easy to claim and can harm the creator.

Thanks to blockchain technology, NFTs ensure that the artist owns the work. This is an opportunity for digital artists who suffer from the risks of plagiarism and creative plagiarism. The smart contract system built into the NFT technology also allows artists to view and record royalty percentages as their work is changed.

  • Corporate Sector NFTs 

The next sector that applies NFT is the business industry. Among other things, NFTs are often used as a link between tangible assets, such as proof of ownership of land and other assets.

Stored physical certificates of ownership are considered more secure on the blockchain with a short verification process. Buyers do not need to worry if their valuable certificates are lost or stolen by others. This is because ownership data is already stored on  the blockchain .

  • NFTs in Entertainment 

Recent examples of applications for NFTs are in the entertainment sector such as games , sports and collectibles. NFT is currently developing a market for collectibles, which it says has great potential.

Some of the most popular collectibles include top-shot NBA game trailers , virtual cats Crypto Kitties, and quirky CryptoPunks avatars. Estimates for all three collections can be in the millions of dollars. The NFT and blockchain- based “gambling” market is also one of the most promising cryptocurrency sectors in the world.

The famous NFT games are Crypto Kitties and Axis Infinity . In the game Crypto Kitties, you need to collect, raise and breed unique digital cats. Meanwhile, Axis Infinity requires players to collect NFT-based digital pets called Axis to fight against other players. Most NFT games use a pay-to-earning system that allows players to earn tokens by actively playing games.

Reasons to Buy NFT In 2022

Based on the previous explanation, NFT is the most popular type of digital asset on the market today. However, citing the Forbes website, because the market is always new, investing, buying and selling NFTs is still quite risky. In fact, most of the NFT market is still speculated and there may be significant price changes, according to the experience of other digital assets in recent years.

Nonetheless, here are some reasons why you should buy an NFT in 2022.

 1. Unique and no exchange rate 

Quoted from Kompas, one of the interesting things about NFT investing is that there is no exchange rate. The value of purchased NFT assets in 1 billion IDR cannot be exchanged for USD 69,400 or coins and 36.38 Ethereum. In other words, NFTs are digital assets that buyers can invest in with a modified value.

 2. Currently Popular

Selling NFT assets through auctions is a great strategy for making money in this modern era. Why so? Because this digital asset is trending in the market. For example, the artist known as “Beeple” once sold a collage of his works and was auctioned for IDR 82.9 billion.

 

How to Create an Open Sea Account for NFT Trading

Before you start trading, you must first create an account with Open Sea . Here’s how to create an Open Sea account to buy and sell NFTs:

  • Open the following link https://opensea.io, you can use a browser on a laptop or cellphone, depending on where you installed your digital wallet. For example, Open Sea is opened via the Google Chrome browser on a laptop
  • To start registration for an Open Sea account, click on the wallet icon or profile picture icon and select the “ Connect wallet ” option.
  • Choose the digital wallet that you are using, for example MetaMask
  • Next, open the MetaMask extension that you have installed on Google Chrome, by clicking on the quiz icon which is usually next to the site’s search box. Next, click on the “ Connect Wallet ” option. Then your MetaMask digital wallet will be connected to OpenSea
  • Next, click on the “ Account ” option and then on the “ Profile ” option to configure a profile in OpenSea
  • Enter your username, email address and more, then click the “ Save ” option
  • OpenSea will send a message to your email address. Open the message to verify the Open Sea account creation request. So, you now have an OpenSea account and are ready to buy and sell NFTs in this marketplace.
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How to Create and Sell NFTs on OpenSea

How to Create an NFT in OpenSea

  • First on the Open Sea homepage, click on the “ Create ” option.
  • Import or upload the file you want to create an NFT for. It can be images, photos, videos, and more.
  • Enter the name of the NFT and several other parameters, such as content-aware parameters and parameters of the blockchain you will use.
  • When finished with the settings, click on the “ Create ” option at the bottom of the OpenSea page.
  • Well, your NFT is ready to be sold.

How to Sell NFTs on OpenSea 

  • Go to the “ My Collection ” option by tapping on the profile picture icon in the upper right corner of the Open Sea page
  • Choose your NFT and then click the “ Sell ” option
  • Choose the sales program that you will use. If you want to sell directly, click the “ Fixed price ” option, while for the auction system, click the “ Hourly bid ” option.
  • Enter the price of the NFT with the desired Ethereum cryptocurrency
  • You can also set the duration of the NFT sale in the “ Duration ” column

When the configuration is complete, click on the “ Complete List ” option. Next, Open Sea will open your MetaMask extension to confirm your NFT sales subscription.

Please note that in order to confirm an NFT sale, you must have at least 0.05 Ethereum balance on MetaMask. Then, for every transaction on OpenSea, a fee of 2.5% of the NFT sales will be charged. You can also earn royalties by selling NFT up to 10%

As it grows, NFT sales continue to set new records. One of the most popular NFT works is Beeple which sells for 69.3 million US dollars or the equivalent of around 995.1 billion Rupiah. Besides Beeple’s works, there are other, more expensive NFT works.

List of 10 Most Expensive NFTs in the World

  1. The Merge $91.8 million (Rp1.318 trillion)

The Merge officially became the most expensive NFT ever sold on December 2, 2021, with nearly 30,000 collectors participating and a total of US$91.8 million. This is the only NFT on the list that has multiple owners.

  1. Everyday’s: the First 5000 Days US$69.3 million (Rp 995.1 billion)

Mike Winkelmann’s most expensive NFT work aka Beeple sold to a single buyer on March 11, 2021. Beeple works are highly respected and premium works of art. This work is actually a collage of his 5,000 works. Since 2007, Beeple has pledged to create one piece of art once a day.

  1. Clock US$52.7 million (Rp756.7 billion)

Clock is the work of Sir and Julian Assange, and literally moves like a clock, counting down the days when WikiLeaks founder Julian Assange was imprisoned. The purpose of this NFT was to raise money for Assange’s legal defense, and it was eventually acquired by the Assange DAO, a group of over 10,000 people who donated their money to buy the NFT and support Assange.

  1. HUMAN ONE US$28.895 million (Rp414.91 billion)

HUMAN ONE is one of Beeple’s NFTs that has been sold for a very high price. HUMAN ONE goes on sale November 9, 2021 for nearly $30 million. According to an interview with Christie’s, this work is closely related to ‘Everyday’s’

  1. CryptoPunk #5822 US$23 million (Rp 330.2 billion)

CryptoPunks NFT dominates the ranks of the most expensive NFTs in the world, with code 5822 selling for more than US$23 million.

  1. CryptoPunk #7523 US$11.75 million (Rp 168.72 billion)

Outshining all its CryptoPunk counterparts, #7523 is a rarer third collection, backed by a hefty price tag.

  1. CryptoPunk #3100 US$7.67 million (Rp 110.1 billion)

As of March 11th 2021, just one day after the #7804 went out of stock, the #3100 is more expensive than its brethren. CryptoPunk #3100 is one more odd pun, but this time he’s wearing a headband. #3100 is the seventh most expensive Crypto Punk on the market.

  1. CryptoPunk #7804 US$7.6 million (Rp 109.1 billion)

CryptoPunk #7804 has the form of an alien punk. This alien is one of nine “Alien” Crypto Punks, wearing a hat and pipe.

  1. Crossroad US$6.6 million (Rp94.77 billion)

Beeple’s Crossroad is just a 10 second clip showing people walking past a huge corpse with slurs written all over it. This Beeple product is highly appreciated because it offers something a little different from the usual NFTs you see.

  1. A Coin for the Ferryman US$6,034 million (Rp 86.64 billion)

One of XCopy’s earliest works , ‘A Coin for the Ferryman ‘, premiered in 2018 and sold for over US$6 million on November 4, 2021. This work has the shape of a combination of squares on a multi-colored background, accompanied by a GIF image making it unique and something the owner can be proud of.

We have finished our discussion of the currently popular NFTs. To learn more about investing, there are several recommended books that are worth reading and can be found easily at sinaumedia.