Digital assets and cryptocurrency are the next trending thing everyone is talking about. Among these, non-fungible tokens, or NFT, have become increasingly popular. While their longevity is still debated, they are selling faster than anyone expected.
Some people are convinced that with the launch of Metaverse, NFTs will become the next big thing, whereas others aren’t so sure. In this article, we’ve taken a deep dive into NFTs and what role they play in the digital world.
Non-fungible tokens (NFT) are a new type of digital asset. These are 100% unique, non-interchangeable units of data stored on a ledger that uses blockchain technology. Blockchain technology is also used to provide proof of ownership of the NFTs. In simpler terms, NFTs are digital assets that hold value.
Most NFTs, at a higher level, are part of the Ethereum blockchain. Ethereum is a cryptocurrency, but its blockchain also enables these NFTs, which store additional information that allows them to function differently from, say, an ETH coin.
Since NFTs are unique and dependent on blockchain technology, they cannot be duplicated. The only person who can supply another copy of the NFT is its creator. While others can own images of the same NFT, they can’t duplicate it because the blockchain is so complex.
Almost all NFTs are treated as “collector’s items”. So, while it is possible to own their images, users have to pay to get proof of ownership and a file that depicts they own the original copy of the item. NFTs have grown in popularity because of this quality. The idea of owning something unique and being able to sell it later at a higher price has appealed to many users.
Any kind of digital file can be stored as an NFT like digital artworks, tweets, memes, videos, images, etc. There is no restriction on the kind of NFTs that can be bought or sold online. The current minting technology enables users to create and sell any kind of NFT online.
However, not all NFTs may be sold. The sale depends on the interest generated in the marketplace.
The blockchain ledger verifies the identity and originality of an NFT. As a result, the Ethereum blockchain technology was the first to introduce NFTs on its platform in 2015. Now other NFT marketplaces have also emerged, including Bitcoin Cash, Flow, OpenSea, etc. NFTs can be sold on these platforms.
On these NFT marketplaces, the seller or creator can list the NFTs. They also need to add additional information like the type of content, file, description of the content, etc., to ensure interested users have information regarding the NFT. Interested parties can bid on the NFT or buy it outright. The seller will then transfer the original blockchain ledger to the buyer.
The seller can choose to sell multiple copies of the NFT instead of just one. Only the creator can do NFT minting. While many parts of the blockchain can be copied and recreated, they will not hold the same value as the original.
Therefore, blockchain verification will identify which NFT is original and which is fake. The original ones are also called smart contract NFTs.
Most buyers and sellers complete transactions in Ethereum because that was the first platform to introduce the tokens. They are charged transaction fees, depending on the type of NFT, transaction time, and platform used. Ethereum, as one of the most popular platforms, charges the highest gas fees.
Here are some reasons why you should consider NFT marketing:
Maintain control over intellectual rights:
One reason that NFTs appeal to artists is the supply chain transparency. All artists are worried that their artwork will be plagiarized or sold illegally without their consent. With the Ethereum smart contract, artists can control who receives copies of their artwork.
They can easily track owners who resell them. Furthermore, artists can keep a track of how many copies were sold originally, allowing them to track down duplicates and ensure intellectual rights easily.
Financial support
Content like video games, music files, etc., are in demand and can be sold and resold multiple times. However, when created as an NFT, the item is considered a “collectible item”. This means there are a limited number of copies.
Selling these can provide financial support to artists and creators who want to continue benefiting from each sale. This may not always be possible through traditional routes. The NFT smart contract ensures they retain control over who has the original copy.
Digital scarcity
NFTs have countless applications: first edition books, limited-run comics, original photographs, old TV series, etc. Many of these are not available digitally. This is especially true for content created in the pre-digital world.
Owners of these copies can take advantage of the digital scarcity and decentralized finance (DeFi) platforms to sell these copies as NFTs. These can be sold in various NFT crypto marketplaces.
An NFT can look like anything. As mentioned before, there is no limit on which type or kind of NFT can be created. Any digital work that is in limited circulation can be made into an NFT. Digital artworks, video games, audio files, JPEG images, etc., can all be converted into NFTs. An NFT is built using the same kind of programming as cryptocurrency.
What are NFT Levels of Scarcity?
The level of scarcity of the digital asset determines its value and transaction cost. For example, Jack Dorsey sold his first tweet on Twitter as an NFT for 2.9 million USD. This does not mean the tweet is transferred into the seller’s Twitter.
Instead, the 2006 tweet from the American philanthropist will remain on his Twitter account. Instead, the copyrights of the tweet will be transferred in the name of the buyer. However, the tweet was sold for high value because of its uniqueness.
Matching NFTs to Physical Products
As mentioned earlier, it is possible to make NFTs for physical products. When an NFT is sold on the NFT marketplace, the proof of stake or ownership is transferred as a token. In the physical world, the presence of the product in itself is proof of ownership.
In contrast, for an NFT, the blockchain ledger or token is required to provide proof of ownership. However, this opens new avenues for digital assets. With the introduction of NFTs, digital assets can now be sold as “limited edition items” like physical products.
In the physical world, duplicates can be verified using tests and techniques; similarly, an NFT can be verified for its authenticity by understanding the token. This unlocks a new avenue of digital markets allowing more services and products to be monetized.
However, a targeted business model is required for the sale of such services.
Business model for NFT Marketing
The business model of an NFT business depends on various factors:
NFT marketplace
To sell an NFT, a marketplace is required. Tokenomics and gas fees make a significant difference in the overall sale. Therefore, they should be considered first.
The uniqueness of NFT
The creator can make an unlimited number of copies. However, its scarcity makes the model attractive.
Divisibility
Some NFTs, like artworks, cannot be divided. For example, the Mona Lisa painting would be meaningless if it wasn’t 100% complete. Therefore, the creator also needs to define whether the NFT can be sold in parts or not.
Synergies between NFT and eCommerce
NFTs pose an interesting opportunity in eCommerce. E-commerce practices to sell NFT are yet to be defined; however, the predictions of NFT show that it will likely be sold widely in the future. Many eCommerce platforms have started selling NFTs as part of their product offerings.
Users can buy a physical copy of a product and a NFT relating to the same. For example, some eCommerce platforms have introduced gaming based NFTs wherein buyers gain access to special tokens that can be either used in a game or are a token of their level and ranking. Predictions show that NFT acceptance is likely to increase and this is a clear indication that investing in NFT is an excellent idea.
If you’re looking for minted NFTs, Waypoint has an extensive collection of collector’s items. Look at our ongoing projects to learn more.
Where to buy NFT safely?
NFTs can be bought on any blockchain marketplaces, including Ethereum, Opensea, Polygon, etc.
How much does it cost to sell NFT? How expensive is it to sell NFT?
The cost of selling NFT depends upon the type of digital asset, its digital scarcity, and the platform. Platforms like WazirX charge 5% gas fees, while those like NFT OpenSea charge 2.5% gas fees.
How to sell NFT on OpenSea?
You can sell the blockchain contract to anyone meeting contractual conditions. The procedure to sell NFT on OpenSea is as follows:
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