If crypto investors or even dummies follow the latest events in the crypto world, you come across the topic N FT. Also the mainstream is already informed about cryptos and tokens as it is a big future potential. Thats why we created this article nft for dummies, to briefly explain how you can profit of this technology. For dummies explained, a “Non-fungible token“ is a specific type of crypto token.
What is a token?
As this shall be an article about NFT for dummies, we start from zero and explain you what’s a token. It is a digital object designed for a specific blockchain with different functions. Especially on the Ethereum blockchain developers create numerous to ken. The use case of these are various, like items of value or as a mean of payment for specific crypto projects.
NFT for dummies: What is a non-fungible token?
NFT for dummies: fungible items vs. non-fungible items
First we take a look at the term, to understand the function of “non-fungible” tokens. “Fungible” means “interchangeable” or “replaceable”. Therefore “non-fungible” means the opposite. A fungible object is one that can be exchanged at will for another object without decreasing in functionality or value.
A blue pen of brand A can be exchanged for a blue pen of brand B without any problems. It makes no difference to the user, as long as both pens can be used to write equally. The pens can be replaced – they are fungible.
In finance, the same is valid for banknotes. A 10-euro bill can be exchanged for another 10-euro bill at any time. They are also fungible. People who want to invest in digital assets are obviously more interested in finance than in pens.
Uniqueness is the key
However, a different situation exists with collectible coins. A 2-euro coin from a collector’s edition can increase in value due to its uniqueness. The unique coin is for example throughout an imprint, not fungible. The owner will not consider to exchange this coin for a regular 2-euro coin.
Now let’s see what this means for people who invest their wealth in digital assets.
An important attribute is the scarcity and the uniqueness of N FTs. Some of the attributes of a token are also captured on the blockchain, as it is stored there. They cannot be changed by third parties. This is important to know also for dummies.
NFT for dummies: Whats the difference to ‚normal‘ token?
A simple digital token can thus be provided with an imprint. Holders of such token investors call an unique digital object their own. The value of an N F T comes from the desire of investors to own this digital object. The motivation of investors in the field of non-fungible tokens comes from there. If you want to learn more about “non-fungible” tokens, join us in our Investment4Insider Telegram group.
Since the cryptocurrency and token space is primarily made up of people with a high interest in digital processes. For dummies it means, that also N F Ts have a strong connection to the digital world. They can be objects from the field of digital art, digitalized trading cards or objects from the gaming sector. Musicians already started to publish collector’s editions of their albums as N.F.Ts. For these reasons, there are also many different people and dummies who like to invest.
History of NF T s
Already in 2014, the first experiments were conducted by developers. The professionalization of the industry developed several years later.
In the first months of 2021, the demand for the digital objects increased rapidly. The sales figures increased by several hundred percent, as more and more investors decided to invest in NF T.
NFT for dummies: How to invest?
Today, NF Ts are traded mainly on special online exchanges. Platforms like OpenSea, Rarible, SuperRare or Foundation work like ordinary platforms in online trading. They offer products of different customers for sale or auction. The payment is made with cryptocurrencies such as Ethereum. If you want to invest in the most effective and easy way into N F T without a high risk of choosing the wrong assets, you can watch the video about the Peak DeFi NFT Fund, which is a decentralized Asset Fund where you can invest and get profits:
Investing in NFT: a new business
All users of the platforms are able to buy and sell the tokens, so investing in NF T developed into a new business. To invest in NFT for dummies, interested parties need to register on a platform like Binance or OpenSea.
They connect their crypto wallet to the platform. After that, they can buy and sell. If you need assistance getting started with N F Ts, then join us in our Investment4Insider Telegram group
N F T – Art sector
The digital art sector in particular has caused a hype recently. Thousands of offerings spread across numerous platforms, some of them with particular fame.
The art of Beeple for example found many enthusiasts. Beeple’s NFTs achieve prices for a total amount of over $70 million in Ethereum. Some of the works of other artists were sold for several hundred thousand USD. As the demand for NF Ts increased during 2021, more tokens also surpassed the one million USD mark.
NFT for dummies: Who can produce it?
Anyone who invests should also find out how and where a “non-fungible” token is produced. Its basic knowledge, how a traditional art object such as a painting or sculpture is created.
But how is digital art created on the blockchain? And who can make and offer this art?
Basically any person who can operate a computer, get on the Internet with it, and knows a little about cryptocurrencies can make a piece of art and transform it into an N FT and offer it for sale to the public.
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Perhaps the true art of commercial artists, of course, is the ability to find one or more buyers. If there would be a suitable API probably it will be possible for machines to invest or produce N FTs as well. That’s not yet the reality. By the way, in our Investment4Insider Telegram group You will find many topics like NFTs for dummies and people who also invest. Check it out!
The increasing demand for digital currencies and the interest to invest in N FT also created a variety of providers who adapted all the procedures in a customer-friendly way. As a positive result, the crypto world went through a simplification process, which is reflected in the field of N F Ts.
Just a few years ago, anyone who wanted to trade cryptocurrencies or tokens had to learn the exact details. Almost all operations involving cryptocurrencies were accessible only for people with special knowledge. Now this situation is different.
Creating NF T
Anyone who wants to create a N.F.T needs a creative idea, a crypto wallet, an account with a platform, some Ethereum. The goal is to artistically appeal to people who want to invest in NF T. The artist chooses the wallet and the platform, not every wallet is compatible with every platform.
However, they have to fit each other. Usually, the platforms inform about the compatible wallets. Many artists use well-known wallets like MetaMask to get started. NFT for dummies and investors also need a wallet.
Which blockchain can be used for NF Ts?
Here we are talking about tok en on the Ethereum blockchain. That is where most NF Ts are made and where many investors are located. From a technical point of view, some other blockchains can also work with N FTs. This is hardly the case so far, but one of the few exceptions is the EOS blockchain.
What all blockchains need to produce or trade NFTs is an appropriate platform. There are several types of N FT platforms. All of them primarily target people who invest in N FTs. Each platform has its own offerings and user rules for investing in NFT. Some platforms are open to different types.
Others specialize in thematic tok ens. For example, there are organizations that only offer to ken from the sports sector. Others focus on digital art or objects from the world of computer games.
How does digitalart becomes a non-fungible asset ?
At a general dig ital art marketplace are the most users. To make a di gital art object as an N.F.T, for dummies its important to choose this type of market. After opening an account on the platform, the user needs to connect a wallet to the platform.
The connected wallet must be backed by Ethereum (ETH) to cover the production costs. These vary depending on the situation. Usually, they consist of the amount of ETH needed to send the token on the blockchain. Though this does not make a difference for the users.
Now the artist is ready to upload the art. That’s what it’s all about: an N.F.T is created by a person uploading a file (for example a picture) to the platform. After that, other users can buy and sell. For this and all other questions, you are welcome to join our Investment4Insider Telegram group There you will meet many like-minded people who also build up their financial future.
NFT for dummies: Who can profit?
There are several ways to make money with N F Ts. Below is a brief introduction to the three main players. These are artists, investors and marketplaces.
Anyone who wants to inv est automatically becomes a merchant. The transactions get paid with the cryptocurrency of the corresponding blockchain. However, there are other ways to in vest in N F T. In addition to the direct investment on marketplaces, N.F.T index funds have now also been set up.
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When creating an NFT, an artist can specify the percentage he wishes to receive as a creator on any resale in the future. Every time a person wants to invest in his asset and buys it, the profits is transferred onto his wallet automatically.
The buyers are users or dummies who in vest in N FT. People who inv est thus support the continued existence of digitalized art.
The third player in the business are the trading platforms. They earn a share as they provide the marketplace. Unlike the two previously mentioned players, developers of these platforms must possess a high level of technical know-how. In NFT for dummies it is more worthwhile to invest for these reasons, or even to produce themselves.
So if you are inspired now and want to be a part of the hype 2021, or if you need more information about this technology or the blockchain, just get into our Investment4Insider Telegram group and join our huge community of crypto enthusiasts and dummies 🙂
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