Some estimate that by January 2021, the average NFT was selling for $195, and by mid-February, that number had reached as high as $4000 dollars. While these numbers fluctuate, and there is no guarantee that anything you mint will reach such prices, it goes to show how valuable minting NFTs can be for artists. How Do NFTs Work?Īnything related to the blockchain can be a little confusing when it comes to the technical aspects, and NFTs are no exception. If you want to know how NFTs work, you may need to find a very knowledgeable computer programmer to explain all the intricacies, but we will do our best to boil down the main points. In broad terms, anything that is non-fungible, like an NFT, is inherently unique and can’t be replaced. That means traditional currency, on the other hand, is fungible. You can trade a dollar for a dollar because they are the same. Now imagine that an extremely rare trading card was printed, and there is only one real copy of that card in the entire world. Potentially, that card could have extremely high value if enough people desire it. NFTs work in the same way as that theoretical one-of-a-kind card. That said, in a digital world, where it is so easy to download and save a copy of a digital image, GIF, or video, you may be wondering how there could really be a single copy of a digital piece of art. Surely someone could just snap a screenshot, or right-click and hit copy, right? Well, not exactly. NFTs are stored on the blockchain as unique tokens, proof of ownership in this case, and linked to the same tech that powers cryptocurrency. This means that when an NFT is minted, it carries unique, non-transferable information, unlike say the iconic Dogecoin. This is what gives NFTs the potential of becoming valuable. There is only one original version of that NFT, which can be auctioned, sold, and traded. The artist can also choose to mint a set number of an NFT as well. There are a lot of reasons why you might be interested in NFTs. As an artist, minting your artwork into NFTs can be an excellent way to make money off your hard work and talent. Now, you don’t have to only push physical prints on online shops or at local farmer markets.Īs a buyer, purchasing NFTs can be a way to financially support your favorite brands or artists who are creating content you love. Entire communities have arisen around people who own NFTs from the same creators, for example. This could mean bragging rights, or just enjoying ownership of something cool.Īnd finally, there are collectors and investors. Many people see NFTs as an exciting speculative asset. Rather than investing in say a startup, stocks, or physical fine art, some affluent members of society are purchasing intriguing NFTs, some of which, like we mentioned earlier, for millions of dollars.
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