He must have heard NFT. The buzz on the non-expendable tokens it has become bigger and bigger: the topic is constantly appearing in the news and draws the attention of celebrities like Neymar and Justin Bieber, who have already launched their own projects and NFT collectibles.
Always very high values also increase curiosity about the subject. After all, what are these valuable digital assets and what is their functionality in everyday life?
This text clarifies the main questions about NFTs and shows how you can get involved.
What is NFT?
NFT is the acronym for non-fungible witness. It is a unique digital asset, registered in blockchainwith unique identification codes and data that set it apart from all others.
Each token is identifiable by a unique transaction record. In simple terms, it means that no two NFTs are alike.
In practice, NFTs represent real-world objects, which may be from the world of arts, music, games, and more. They are bought and sold online, and transactions are often made in cryptocurrencies.
Although only “fashionable” now, NFTs have been around since 2014.
How do NFTs work?
Most NFTs are part of the Ethereum blockchain. But other blockchains can implement their own versions of NFT.
An NFT is created or “coined” from digital objects that represent tangible and intangible elements, including games, graphic arts, Gifs, videos, collectibles, virtual avatars, and aspects of video games, music, and more.
The list of what can become an NFT is huge, even a tweet. Twitter co-founder Jack Dorsey sold his first tweet as an NFT for more than $ 2.9 million, for example.
What are NFTs for?
Basically, NFTs work as collectibles, but in digital format. So instead of having a real oil painting hanging on the wall, the buyer of an NFT has the same painting in the form of a digital file.
NFTs also acquire exclusive property rights. That is, they can only have one owner at a time, and the use of blockchain technology facilitates ownership verification as well as the transfer of NFT between owners.
As such, NFTs offer artists and content creators a unique opportunity to monetize their products. One example is that artists no longer have to rely on galleries or auction houses to sell their art. Instead, the artist can sell it directly to the consumer as NFT.
In addition, artists can schedule copyright to receive a percentage of sales as long as their art is acquired by a new owner.
This monetization also goes beyond the arts. Brands like Charmin and Taco Bell have auctioned off NFT themes to raise funds for charity, for example. In sports, NBA Top Shot generated more than $ 500 million in sales at the end of March, and of that total, $ 200,000 was raised with the NFT released by LeBron James.
What is Monkey NFT?
In January 2022, it was learned that player Neymar had bought two NFT monkeys for about $ 1.1 million. After all, what is it about?
It is an NFT that is part of a collection called “Bored Ape Yacht Club”. The collection features 10,000 unique digital works of art from “boring monkeys”, generated by a randomization algorithm, each with its own combination of features: colors, clothing and accessories.
Some of these combinations are more common and some are rarer, making them more expensive. In addition to the character’s commercial rights, Neymar has access to exclusive events, both physical and digital.
How to buy NFT?
If you want to start your own NFT collection, you need to follow a few steps. First, you need to get a digital wallet that allows you to store NFTs and cryptocurrencies. This also means that you will need to purchase cryptocurrencies such as Ether in order to pay for the purchase of an NFT.
It is possible to buy credit cards with credit card on platforms such as Coinbase, eToro, Kraken and PayPal.
It is also important to note that these transactions will incur commissions. Most exchanges (cryptocurrency exchanges) charge at least a percentage of their transaction when a user buys cryptocurrencies.
Equipped with cryptocurrencies and knowing how transactions will be made, the consumer can search for their NFT of interest and buy the non-fungible token.
What are the main platforms for trading NFT?
For NFT trading, whether buying or selling, some markets or platforms are already well known, especially to ensure the security of transactions and have a wide range of digital assets.
Some of the most used platforms are:
– Super rare
– Myths Market
– Atomic Market
– Enjin Market
– Bakery change
– Know the origin
How does NFT valuation work?
To understand how NFT valuation works, we need to go back to the concept of tabs. There are two types of tokens: fungible and non-fungible. Consumables are like coins that will always have the same value. A real is always worth a real, so a one-dollar bill can be replaced by any other real bill.
Non-consumable tokens (NFTs) are unique and cannot be replaced by any other tokens. They can gain or lose value regardless of the currency used to buy it. Singularity and scarcity add value.
Therefore, the more unique and rare an NFT is, the more its creator can increase the price for those who want to acquire the digital asset.
How to invest in NFT?
The direct way to invest in NFT is to buy in cryptocurrency exchanges, such as Binance and Mercado Bitcoin, as well as some markets, such as OpenSea and SuperRare, which offer NFT acquisition options. In this case, the investor will have a return based on the valuation of their individual assets, which depends on the demand of other users.
For those who prefer to bet on the sector indirectly, there are options in Brazilian brokerages. The Trend XP Metaverso fund, for example, carries an index with shares of 30 global companies that are somehow linked to this universe. Another option is the Coin NFT fund, from Vitreo, with a minimum investment of BRL 1,000, a management fee of 0.34% per annum, plus a performance fee.
There is also the NFTS11 ETF, managed by Investo, which is an index fund listed on B3 that invests in tabs in the media and entertainment sector and replicates the performance of the MVIS Crypto Leaders Index Media & Entertainment.
* With the collaboration of Wesley Santana
Want to see exclusive content from BUSINESS SEASON? Access the digital version.