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Know What NFT is and How It Works

Timesofummah.comWant to know what NFT is? In fact, non-fungible tokens (NFTs) are an increasingly popular type of digital asset. From art, to food to rare tweets. This 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?

What is NFT?

Know What NFT is and How It Works

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, musical arts, game items, to short videos.

Those digital assets are bought and sold online, usually to be paid for using cryptocurrencies, which have been coded using other crypto assets and basic software. Since 2014, NFT is now famous for being considered a practical way to buy digital graphics.

NFT is usually evaluated as one of the very limited trading processes and has its own identification code.

Through this NFT, you can see the digital jobs that everyone is selling. Please note that the brand in this NFT does not exist. This happens because the NFT is authorized by the buyer to the original element. Not only NFT, but also congenital certifications that serve as certifications for titles are also included.

NFT Working Method

NFT is part of a blockchain. Therefore, NFT buyers can prove that they are the sole owner of the asset they are buying. No one can revoke the NFT buyer’s ownership once paid.

NFT is also a digital asset that cannot be duplicated over and over 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 an NFT and sold for $2.9 million. In fact, anyone can take a screenshot and own the tweet.

However, it can only be sold by Jack Dorsey and NFT buyers. In order to be traded, NFTs must go through the NFT printing process.

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

Difference between NFT and Cryptocurrency

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

According to the Asia One website, the main difference between NFT and cryptocurrency lies in the word “replaceable”. What is an NFT “replaceable” object? This term actually means that it can be exchanged for goods of the same value.

For example, you can pay a $10 asset for two $5 assets. In addition, 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 essentially exchanging currency like a money changer. For example, buy one Ethereum for $2,840, then later you can keep it until one day the price of Ethereum goes up and sell it immediately.

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

Examples of Using NFT

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

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

NFT in Art

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

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

Corporate Sector NFT

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

Physical certificates of ownership that can be stored are considered more secure on the blockchain with a short verification process. Buyers don’t have to worry if their valuable certificates are lost or stolen by others. This is because the ownership data is already stored on the blockchain.

NFT in Entertainment

Recent examples of applications for NFT 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 are top-shot NBA game footage, virtual cats Crypto Kitties, and the quirky CryptoPunks avatar. Estimates for the three collections can run into the millions of dollars. The NFT and blockchain based “gambling” market is also one of the most promising cryptocurrency sectors in the world.

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, the game Axis Infinity requires players to collect NFT-based digital pets called Axis to fight other players. Most NFT games use a pay-to-earning system that allows players to earn tokens by actively playing the game.

Reasons to Buy NFT in 2022

Based on the foregoing, 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 speculative and there may be significant changes in price, according to the experience of other digital assets in recent years.

That said, here are some reasons why you should buy NFT in 2022.

1. Unique and no exchange rate

Quoted from Kompas, one of the interesting things to invest in NFT is that there is no exchange rate. The purchased NFT asset value in 1 billion IDR cannot be exchanged for USD69,400 or coins and 36.38 Ethereum. In other words, an NFT is a digital asset that a buyer can enter at an altered value.

2. Currently Popular

Selling NFT assets through auction 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 work and auctioned it for Rp. 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 NFT:

  • Go to the following link, you can use the browser on your laptop or mobile, depending on where you installed the digital wallet. For example, Open Sea is opened via the Google Chrome browser on a laptop
  • To start the Open Sea account registration, click on the wallet icon or profile picture icon then select the “Connect wallet” option
  • Select the digital wallet you are using, for example MetaMask
  • Next, open the MetaMask extension that you have installed in 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 the 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. Well, you now have an OpenSea account and are ready to sell and buy NFT in this marketplace.

How to Create and Sell NFT on OpenSea

How to Create NFT in OpenSea

  • First on the Open Sea homepage, click on the “Create” option.
  • Import or upload the file you want to make NFT. It can be in the form of images, photos, videos, and more.
  • Enter the NFT name and some other parameters, such as the content-aware parameter and the blockchain parameter that you will use.
  • When you are done with the settings, click the “Create” option at the bottom of the OpenSea page.
  • Well, your NFT is up for sale.

How to Sell NFT on OpenSea

  • Open the “My Collection” option by tapping the profile picture icon in the upper right corner of the Open Sea page
  • Select your NFT and then click the “Sell” option
  • Select 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 NFT price 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 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%

Along with its growth, NFT sales continued to set new records. One of NFT’s most popular works is Beeple, which sells for 69.3 million US dollars or the equivalent of around 995.1 billion Rupiah. Besides Beeple’s work, there are other, more expensive NFT works.

List of 10 Most Expensive NFTs in the World

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. It is the only NFT on the list that has multiple owners.

Everyday’s: the First 5000 Days US$69.3 million (Rp995.1 billion)

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

Clock US$52.7 million (Rp756.7 billion)

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

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

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

CryptoPunk #5822 US$23 million (Rp330.2 billion)

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

CryptoPunk #7523 US$11.75 million (Rp168.72 billion)

Beating all its CryptoPunk counterparts, the #7523 is a rare third collectible, backed by a good price tag.

CryptoPunk #3100 US$7.67 million (Rp110.1 billion)

On March 11, 2021, just one day after the #7804 ran out of stock, the #3100 was more expensive than its brethren. CryptoPunk #3100 is one of those weird puns, but this time he’s wearing a headband. #3100 is the seventh most expensive Crypto Punk on the market.

CryptoPunk #7804 US$7.6 million (Rp109.1 billion)

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

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 insulting writing on it. This Beeple product is much appreciated because it offers something a little different from the regular NFTs you see.

A Coin for the Ferryman US$6,034 million (Rp86.64 billion)

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

We have finished our discussion about NFT which is currently popular, to get deeper into investment, there are several book recommendations that are worth reading and can be found easily at Gramedia.

About robert fernandez

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