It seems like everybody’s talking about NFTs these days. Celebrities are coming up with their tokens, and millions of dollars are being spent on these digital assets. Even so, many people are still confused – what exactly are NFTs and why are they so popular?
The definition of an NFT per Wikipedia is: “a unit of data stored on a blockchain that can be sold and traded.“ However, that doesn’t make this any clearer for the average reader.
In this guide, we’ll teach you the basics – what NFTs are, and how you can become a part of the trend. We’ll go through topics like which digital wallets you should use, and what are the best NFT platforms on the market.
What is an NFT?
NFT stands for non-fungible token. As the name suggests, the core idea behind these tokens is that they are unique, and cannot be replaced. Let’s paint a picture.
For example, let’s say you have a dollar bill. If that dollar bill rips, you can go to the bank and get a new one. The value of that bill is the same as the one you lost – they are fungible and interchangeable. In simple terms, one dollar will always be worth exactly the same as another dollar.
However, let’s say you have a favorite dollar bill, taken from your first paycheck that has emotional value. If that bill gets lost or damaged, it cannot be replaced with another dollar bill – they are not the same. Similarly, no two NFTs are the same.
What are NFTs used for?
When you buy these tokens, you get a receipt of some sort that confirms your ownership of the token. Since they’re stored on a blockchain, NFTs are almost impossible to tamper with. Much like cryptocurrencies, they are secure and tied to that specific address, making them resistant to hacking.
There are several uses for NFTs, however, the most popular form is digital art. They also have the potential to revolutionize copyrights, licensing, and even personal identification and real estate transactions.
At the time of writing, digital artwork is the most sought-after form of these tokens. NFTs can be released in collections, in gif, video, or music form, or they can be a ticket to exclusive content provided by the creator.
Why Should You Invest?
Now that we’ve cleared the definition of an NFT, you may be wondering – what’s the big deal? Are NFTs a good financial opportunity? Why should I invest in this trend?
Saying that these tokens have taken the world by storm is an understatement. NFTs have reached a market cap of $25 billion in 2021. By comparison, the cap for 2020 was just over $80 million.
Jeffries, a financial services company, predicts the market will reach a whopping $80 billion in value by 2025, saying that digital assets are an emerging technology. If you want to be a part of the revolution, now is the time to get in.
Which Wallet Should You Use?
Depending on your choice of marketplaces, you’ll need a digital wallet to purchase NFTs. With notable exceptions, most NFTs are stored on the Ethereum blockchain. To purchase them, you’ll need a compatible eWallet.
It is our top choice for the best wallet to purchase NFTs. It’s available as a browser extension, but also as a mobile app, so you can easily trade and buy on the go. As a popular choice, it is compatible with most marketplaces. An intuitive user interface and dedicated customer support make MetaMask an ideal choice for both beginners and experienced buyers.
It is an open-source wallet, and it shows. It’s highly user-oriented, it has a sleek interface and it’s very easy to use. It only supports Ethereum, making it a slight downgrade from other wallets that are compatible with several blockchains. However, the wallet has native support for NFTs. It’s the best choice for beginners who are still dipping their tows in the world of digital assets.
It is owned by Binance, a popular and renowned trading platform. As a result, you can only expect their apps to be sleek and useful, and TrustWallet doesn’t disappoint. You can convert crypto directly in the app, and the wallet supports several blockchains. The only downside to this wallet is that you can expect to see a few promotions for Binance. However, it’s a small price to pay for a functional digital wallet.
Best NFT Marketplaces 2023
Now that you have decided on a digital wallet, you need to find an NFT marketplace. Although you can purchase tokens directly from the creator, most of them end up on these platforms to be sold for a profit. Here are our favorites:
It is the best overall choice. As one of the oldest and largest NFT marketplaces, it features over 80 million NFTs. The tokens can be auctioned or bought instantly for a higher price. You don’t even have to create an account – all you need to do is to connect a wallet and start trading. OpenSea supports 14 different eWallets, including MetaMask, WalletConnect, and Portis.
It is slightly different and it’s reserved for exclusive artwork. Their goal is to preserve art collections, and there’s a strict vetting process if you want to post an NFT on their platform. Since the art is so highly-valued, these pieces can be worth a lot of money. However, you can expect to pay a bit more for inclusivity.
It supports three different blockchains, including Ethereum. It is a highly trustworthy platform that currently has over 1.6 million users. Most importantly, it’s one of the few marketplaces that allow you to buy NFTs using fiat currency. As a result, it’s a decent option for beginners.
Once you’ve learned the definition of an NFT, you certainly want to hop on the trend. There’s a lot of money to be made in this form of digital assets, and if you’re looking for a great investment in 2022 – NFTs are the way to go.
Experts predict that NFTs are just getting started and that the market is only going to rise in value. It’s not too late to get your hands on your favorite NFTs. With our quick guide, you know how to get started.