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What Is an NFT?

NFTs have transformed the world of digital art and digital collectibles ๐Ÿค—. As an influencer or a digital artist, you’ve probably noted the significant increase in secondary sales ๐Ÿ“ˆ from the new audience (crypto-audience) created by NFTs.ย  Apart from connecting with new fans ๐Ÿ‘Œ, you can also claim ownership of various assets using NFTs.

But wait, what is an NFT anyway? This article explains what an NFT is, how they work, and how you can make actual money with NFTs ๐Ÿ˜‰. The next time someone asks “What is an NFT” with a confused look on their face, you’ll be happy to know the answer!

What Is an NFT?

“NFT” is an acronym for “non-fungible tokens.” “Fungible” is just a fancy word for interchangeable, identical assets. A quarter is fungible because all quarters are the same. Houses are not fungible because all houses are not the same. Simple, right?

Fungible, interchangeable digital assets, as well as NFTs, are traded over blockchain platforms like:

  • Axie Marketplace
  • Ethereum
  • NBA Top Shot Marketplace
  • OpenSea

The creation of NFTs is likewise a fairly simple process to understand. NFTs are created and traded in the form of a cryptocurrency (digital cash that has an encrypted key with a random string of numbers ๐Ÿ”ข).ย  NFTs gives users the freedom to safely store, protect, and control data that pertains to their identity, and they are the perfect way to trade digital assets and digital tokens. This has motivated many content creators and organizations to create their own NFTs ๐Ÿ˜‡ as a form of investment.

How Do NFTs Work?

An NFT transforms a digital piece of art into a verifiable digital asset used for trading in the NFT marketplace ๐Ÿ‘Š. Each NFT has unique information inscribed on it about the artwork, including ownership data and storage information. During NFT transactions ๐ŸŽฏ, the creators can add details including secure links to their specific NFT files and creator identity ๐Ÿ˜Ž.

For someone to collect or invest in a given NFT, they need to have an NFT digital wallet. Through this cryptocurrency wallet, you can access to the blockchain protocol that NFTs are built on ๐Ÿ’ช. The cryptocurrencies used as the medium of the transaction include Bitcoin or Ethereum as well as more unusual currencies like Dogecoin.

Whatโ€™s the Relationship between NFT and Cryptocurrency?

Cryptocurrency represents a digital version of real money. A private cryptographic key with a random number string controls the cryptocurrency during blockchain transactions. To own a given cryptocurrency ๐Ÿ’Ž, you must have this private key ๐Ÿ—. Digital currencies have similar value as physical money ๐Ÿ’ต and serve as a currency for the digital economy.ย 

With regards to NFTs, cryptocurrencies help transform a digital item into a non-fungible token through a technique known as “minting.” Just like cryptocurrency transactions, nonfungible tokens make use of blockchain transactions. Also, similar to the private keys on cryptographic tokens, NFTs comes with a unique digital signatureย  ๐Ÿ–Š. This helps you to claim proof of ownership ๐Ÿคต for a given NFT and prove its authenticity in the digital realm.

What Can You Convert into an NFT? What Is an NFT? 

An NFT can be made from different forms of digital content and digital creations, including the following.

Music. You can create music NFTs on marketplaces like Ethereum blockchain, Raribble, Axie Infinity Market, and so on ๐Ÿค™.

Digital artwork. You can transform your digital collectibles (digital images or digital objects) into formats like PNGs, JPGs, or MP4s and sell them as NFTs through art auctions.

Games. You can sell any game item, including video game skins ๐ŸŽฎ or virtual avatars, through NFTs.

Videos. You can also sell recorded video clips ๐Ÿ“น, video arts, or classic movie scenes ๐Ÿ“ผ as NFTs through platforms like OpenSea.

Physical artwork. You can make a digital copy of your physical artwork like paintings ๐Ÿ–Œ or a collage of images and keep them for future sales on NFT marketplaces.

Collectibles. You can convert real-world items like game collectibles and celebrity memorabilia into NFTs and sell ๐Ÿ’ฐ them on platforms like Cryptopunks4 or CryptoKittie3.

Tweets and memes. Yes! As an influencer, you can also sell tweets and memes as NFTs and make some good money from it. Jack Dorsey (Twitter co-founder) sold the first-ever tweet at $3 million!

Do You Need Help with What Is an NFT?

We live in a new world where you can get rich selling your old tweets or charging rent on virtual plots of land in an online game. In your journey towards making thousands of dollars (or maybe even more!) through cryptocurrency โš–, you might need some help ๐Ÿค as you enter the market for NFTs. You need to understand all the legal aspects that pertain to different types of NFTs ๐Ÿคž, which include sales and taxes on your gains for every blockchain transaction.ย 

To get started with creating and understanding the legal issues with NFTs, you can book ๐Ÿ“ a consultation with us here. And don’t forget to join the Ian Corzine email list for more weekly Web3 opportunities!