NFTs are the latest trend in cryptocurrency, with bands like Kings of Leon releasing their album as limited edition ''golden tickets'' and baseball cards being sold for millions of dollar as a digital token.
NFTs, or non-fungible tokens, are a type of cryptocurrency created on a smart contract platform such as Ethereum. They are unique digital objects that can be cool to own or even profitable to trade. Think of them as digital collectable cards. They typically start as something only enthusiasts care about, but if you get a rare one, it could be worth a lot one day.
Cryptocurrencies can be fungible, meaning all the currency's units (i.e., tokens) are the same and equal in value, like grains of rice, dollars or even bitcoin.
Non-fungible tokens are the opposite — every cryptocurrency unit, or token, is unique and cannot be replicated. This is the reason why this space has recently blossomed, encompassing thousands of projects involving artworks, gaming, and sports.
The given vast majority of NFTs are created and traded on Ethereum. NFTs are created on Ethereum's blockchain, which cannot be altered. No one can undo your ownership of an NFT or re-create that exact same one.
Also, anyone can create, buy, or sell an NFT without asking for permission. Finally, every NFT is unique and can be viewed by anyone.
So think about it as a unique collectable card in a forever-open store window that anyone can admire, but only one person (or cryptocurrency wallet, to be exact) can own it at any given time.
You should start by installing Metamask, a browser extension that lets you interact with various facets of Ethereum, such as exchanges and dApps (decentralized apps).
MetaMask is also a digital wallet for Ethereum that can hold both fungible and non-fungible tokens. After that, you click Add funds and you can use apple pay or a debit card to start buying some Ethereum because, without it, you cannot buy anything in this market.
You need to be careful to store your password and your wallet's private key safely because if you lose it you are f**cked. As an example, this is where I keep all my things safe, on an external drive or USB stick. Then when you visit a website that sells NFTs (such as opensea.io) you connect your Metamask wallet and you can start buying your first NFT.
Beeple is one of the most famous for his art on these platforms, and he sold about 20 art pieces in December and made $3M. So you can expect some high numbers in there.
Also, there is another blockchain game Cryptokitties that sell virtual cats for tens or even hundreds of thousands of pounds for one kittie!!!
Buying an NFT because you like it, or maybe even to earn (or lose) a bit of money is one thing. But investing in NFTs is another.
It is a bit of a waiting game. Even a Van Gogh painting or a rare Babe Ruth baseball card required some passage of time before becoming very valuable.
Given the digital nature of NFTs, it's hard to prize physical artworks, such as statues and paintings, their value mostly fluctuates based on how desirable they are. Even a painting like Mona Lisa can become a worthless piece of art if no one is interested in it anymore. On the other hand, we live in a world where one Bitcoin is worth more than $50,000, so things from the digital realm can certainly be very valuable and even sustain that value over longer periods of time.
In any case, if you plan to invest in NFTs, or plan to create your own, you'll need to dive deep into this complex world because each NFT market is slightly different. And yes you can create your own NFT's as well so if you're interested to find out how let me know in the comments below and I will do a video about it.
A thing to keep in mind is that is quite pricey — trading on Ethereum can be quite costly as the network's recent congestion is causing fees to rise. Finally, you'll need to think strategically and follow the often rapidly changing cryptocurrency trends.
In short, it's possible to earn money by investing in NFTs, but you'll have to do your homework :).