What are NFTs and how do they work? | Part 10

What is an NFT? 
A non-fungible token (or NFT) is a unique and non-interchangeable unit of data that is stored on a blockchain. NFTs can be made from digital files like photos, videos, and audio. 

Unlike a physical item, NFTs are indestructible because all of the NFT data is stored on the blockchain through smart contracts. Because NFTs have historical ownership data on the blockchain, they can be traced back to the original owner. The digital assets can be authenticated without the need for third party verification. 

You have likely heard of people talking about “minting NFTs.” To mint is the process of turning a digital file into a digital asset on a blockchain. 

So why are people going crazy over NFTs and why are they so important? 

NFT sales hit 2.5 billion in the first half of 2021.

Many people value direct ownership whether it be ownership of an item, moment, or highlight in history. Owning an NFT can be a status symbol for collectors. If you’re a basketball fan, you can buy an NFT of the best shots of 2021 and you will be the sole owner of this NFT for as long as you choose to keep it. 

NFTs have also revolutionized the gaming and collectibles space. They have allowed gamers and collectors to become the owners of in-game items and other unique assets like costumes and avatars. The owners can make money from the NFTs by selling them. In some cases, people can make money from creations like casinos and theme parks in virtual worlds. 

As of January 2022, these are among the most expensive NFTs sold: 

Beeple is an artist that sold his piece “Everydays: The first 5000 Days” for $69.3 million at an online auction. The piece was a collage of 5,000 digital artworks he’s crafted since 2007. 

“CryptoPunk 7523” by Larva Labs sold for $11.75 million. Larva Labs launched tens of thousands of pixel art collectible characters. 

“Save Thousands of Lives” sold for $4.5 Million and it was created by Noora Health, an educational platform that provides training and information for caregivers and patients.

How to create NFTs

Once you have your digital piece, whether it’s an image, audio, or video, you need to decide which blockchain you want to issue your NFTs. While Ethereum is currently the most popular blockchain to issue NFTs, a growing number of blockchains allow people to mint NFTs including Polkadot, Cosmos, Binance Smart Chain, and EOS.

To mint NFTs on the Ethereum chain, you will need an Ethereum wallet that supports ERC-721, the Ethereum-based NFT token standard, like MetaMask or Trust Wallet. You will also need enough Ethereum assets in the wallet to pay for the gas fee to do the minting process. Popular Ethereum NFT marketplaces include OpenSea, Rarible, and Mintable. 

With these marketplaces you will first connect your wallet to the website, upload your digital assets, and fill the required information to add the assets on the Ethereum blockchain. 

Depending on the platform you use, you have a choice on which payment tokens you want to use to buy and sell the NFTs. 

If you want to buy NFTs, these are the most popular NFT marketplaces. 

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