What are NFTs? A Beginner’s Guide

Before the concept of Non-Fungible Tokens existed, owners of viral photos made little money from them, if not at all. But with the current explosion of NFTs, creators have been coming out here and there with their artworks sitting in the market with heavy price tags. What are NFTs? How do they work? Are they even worth investing so much money in? How is it different from bitcoin? Is it safe to invest in?

We’ll answer these questions and many more but first, let’s take a closer look at the world of Non-Fungible Tokens.

Meme-turned-NFTs

If spending hours on the internet—liking and sharing memes—is your daily cup of tea, you should be familiar with “Side-eyeing Chloe.” As of September 25, 2021, at 5:02 am, this meme was sold as an NFT for 25 Ether. At that time, it was converted to a whopping $108,982.50! Unbelievable, right? That’s just the latest meme-turned-NFT that was sold this year. Owners of many other viral memes have been making bank since the onset of the NFT frenzy.

You probably even heard of the “Doge” meme, an image of an excited Shiba Inu named Kabosu. As of October 2021, it is still officially the most expensive meme NFT—sold at a jaw-dropping $4 million! And just recently, its value surged 55x after being split into 17 billion pieces. That makes its total market price equivalent to $220 million.

Memes aside, what about the “most valuable NFT” itself? Ever heard of “Everydays: The First 5000 Days”? If not, well, here’s the catch: it was sold for $69.3 Million at a Christie’s digital art auction. The owner of this NFT is the digital artist Mike “Beeple” Winkelmann, who pieced together a collage of more than 5000 artworks he created for 13 years. It’s the famous auction house’s very first digital art sale.

What about Twitter CEO Jack Dorsey’s first published tweet? Sounds absurd, but it was sold for $3.8 million.

Short clips of big sports moments, too, that could sell for up to $200,000. And so many others.

So, what are NFTs?

NFTs or Non-Fungible Tokens represent any type of virtual files or collectibles that are “non-fungible.” This means that you cannot replace nor trade them for any other item. This is because each NFT has a unique code that is recorded in the blockchain. This publicly shared ledger tracks every transaction that occurs.

In other words, two different NFTs cannot be interchanged, even if they look identical. You can trade Bitcoin with other currencies, but that’s impossible with NFTs. They’re like the elite’s fine art pieces, except they don’t have a tangible form and are more accessible to common folks.

Speaking of art pieces, since they’re entirely digital, you can’t put them up in your living room like a Van Gogh painting. All you get is the so-called “bragging rights” for being the rightful owner of the artwork itself.

There are some cool projects being developed that allow you to display digital artwork, kind of like a digital picture frame, but in a more nuance fashion. These projects allow you to physically represent your digital artwork. Also, there is the ability to put on digital art shows within virtual reality or augmented reality, but that’s a whole other subject we won’t be diving into on this article.

According to GMoney, the new owner of $170,000 CryptoPunk NFT: NFTs is “a flex utility.” “It has the same effect as wearing that Rolex in real life, but digitally,” he added. This flex is especially significant in the crypto community where “recognition, respect, and status” is determined by the value of your virtual assets, whether NFTs, Bitcoin, Dogecoins, or others.

How is that even possible?

The code—or in metaphorical terms, the essence—of the NFT you purchase is passed on to you by the creator. The blockchain verifies and records this “transfer of rights” into part of the code itself. After which, the NFT is all yours. You can create copies or reproduce any virtual item yourself, but its NFT will always be the original, definitive version.

A more apparent reason people invest in NFTs is the assumption that these will appreciate over time or become more valuable in the future. In short, their growth potential. This is why droves of people, from rich businessmen and Hollywood A-Listers to ordinary people are currently investing in NFTs.

As of the third quarter of 2021, the NFT trading volume has reached $10.67 billion, an increase of 704% from the previous quarter. Crazy, right? And it’s only snowballing so far.

How do you trade NFTs?

These digital assets mostly sit in the Ethereum blockchain, and you can purchase them with ETH. You can visit crypto marketplaces such as Coinbase to buy ETH. After purchasing ETH, you’ll need a wallet to store it in. We suggest a non-custodial wallet such as Metamask. Still, it always depends on what type of cryptocurrency or NFT you’re opting for. You can then transfer your ETH coins to your wallet from Coinbase (or other). Now, you’re in full control of your Ethereum.

It’s worth noting here that there are other blockchains that are forging ahead with NFTs in addition to Ethereum. We’re only going to talk about ETH in this article, but Cardano, Tezos, WAX, and many other blockchains are spearheading vibrant NFT marketplaces and economies. The process for investing on those other chains is largely the same.

Marketplaces

You need to join an NFT marketplace to find digital assets you’ll want to invest in. The most popular ones are OpenSea, Nifty Gateway, SuperRare, and Rarible. If you’re an artist looking to profit from your masterpieces, you can also mint them there as NFTs.

NFT Games

If you prefer games, you can head straight to your chosen NFT game after transferring your ETH coins to your wallet. The most popular ones include CryptoKitties, Axie Infinity, Sorare, and F1 Delta Time. And don’t forget to sync your digital wallet to any of these platforms.

What are NFT Games?

As mentioned earlier, NFTs are not only for the affluent but also for the masses, especially in the Global South. Considering the nature of NFTs and their typical price tags, it would be hard to imagine how that’s possible. But it’s true, and it has even helped a community create a new revenue stream and thrive amid the ongoing pandemic. In the Philippines, particularly, a growing number of Filipinos have been earning income through one of the currently booming NFT games in the market—Axie Infinity. There’s even a short documentary created about this NFT frenzy in that small locale.

Though most of the first players of this game in that community started out by investing a small sum, many successful ones started out with zero. How? Scholarships!

This makes some of the biggest NFT games free to play and earn cash from. Besides Axie Infinity, there are also other NFT Games that don’t require upfront costs. All you need to do is sign up and do the grind. Players don’t only profit from these games; they’re also having fun.

How do NFT Games work?

It depends on the mechanics of the game, as each of them has different systems. Many of the NFT games you can find require you to battle with other players. Through that, you earn character items that are actual NFTs that sit in a blockchain. You have the option to store those NFTs or put them up for sale in the marketplace.

‘Trading cards’ is another type of NFT game that’s been around for a while now. One of the popular ones is Sorare, a fantasy soccer game where famous real-life players are available as NFTs cards. The game holds tournaments where you use these special cards to compete and win new cards, ETH, and other prizes. These cards can also be traded among players on a transfer market. The most expensive unique card sold is Cristiano Ronaldo, bought for $289,920 on March 13.

Of course, anyone can start investing in NFT through these games. So, if auctioning is not something you enjoy doing, you can opt for NFT games instead, at least for a start. You can then see where your crypto venture goes from there. There are so many fun and awesome NFT Games to choose from, and we’re here to guide you with that.

NFT games are such a great way to invest in NFTs.

How can I be sure that my money is safe?

First of all, there is not one place in the world, whether online or offline, where you can be sure that your money is a hundred percent safe. The tight security of your trusted banks doesn’t necessarily guarantee safety. In fact, it attracts them. The same thing happens in the crypto space. There have already been a few cases of crypto theft. But compared to physical banks where individual transactions are privately recorded, the blockchain—a shared digital ledger—keeps track of them publicly for everyone to see. This makes cryptocurrencies more difficult to steal than physical objects such as fiat money and museum art pieces. In other words, the blockchain is your strong and dependable ally.

Is investing in NFTs really worth it?

Some say that NFTs are not for everyone. In a way, that’s true because investing in them always depends on your purpose. But whether you’re only up to profit from them or mean to join the crypto community and flex your social status, you can find all kinds of NFTs suited for you. After all, the crypto world is simply a virtual representation of our society. You just have to be on the right platform.

As with any other type of investment, never skip the research about NFTs or NFT games and understand all the risks.

Non Fungible Tokens, especially NFT games, are a game-changer. It’s been growing rapidly from the onset and is still growing with more and more investors taking the plunge. It’s also created a new avenue for artists to monetize their works. NFTs don’t deteriorate over time compared to physical pieces, and their ownership rights are more securely protected, thanks to blockchain technology. It’s clear how it’s marking the future of fine art collecting and gaming.

Want to stay up-to-date on the latest news about NFT games? Any topic about NFT Games you like us to write about? Leave your answers in the comments down below, and we’ll keep you updated about the newest NFT Game info.