Explainer: What are NFTs? Get to know NFT basics, how to buy and sell them

Digital art has taken the world by storm as tech-savvy digital art lovers are shelling out millions of dollars to own a unique digital artwork that proves your authority over the artwork bought. As a result, digital artists are seeing their lives changing thanks to the massive sales to a new crypto audience.

So, has one ever wondered what actually NFTs are all about ..let’s dive in and see what all the fuss is about!

Know the basics of NFT

Non-fungible token, commonly known as NFT, is a cryptographic asset that has been tokenised via a blockchain and can neither be replaced nor interchanged because it has unique properties. In other words, NFTs are assigned unique identification codes and metadata that distinguish them from other tokens. They are ‘one-of-a-kind’ assets in the digital world that can be bought and sold like any other piece of property, but which have no tangible form of their own.

These NFTs are digital assets and could be photos, videos, audio files, etc. Some of the NFT examples include artwork, domain names, comic books, sports collectibles, trading cards, games, sneakers in fashion lines, and heaps more. Since each NFT is unique, it acts as a collector’s item,

How do NFTs work?

The majority of NFTs reside on the Ethereum blockchain, though other blockchains have implemented their own version of NFTs. These are created through a process called minting, in which the information of the NFT is recorded on a blockchain, thereby keeping a track of who’s holding and trading NFTs.

At a high level, the minting process not only involves a new block being created, but also the NFT information being validated by a validator, and the block being closed. This process also involves incorporating smart contracts that assign ownership and manage the transferability of the NFT.

Know the top-selling NFTs

The year 2022 witnessed exponential growth for the NFTs as tens of thousands of investors flocked to collect digital art in various forms. Collections like the Bored Ape Yacht Club and CryptoPunks become some of the most expensive pieces of art one could buy, with artists like Beeple and Pak selling their pieces for tens of millions of dollars.

Other expensive NFTs ever sold include The Merge, Clock, HUMAN ONE, and Everyday, which have sold for an eye-watering price tag of $91.8 million, $52.7 million, $28.9 million, and $69.3 million, respectively.

How to buy NFTs?

NFTs can be easily bought and sold in NFT marketplaces, which are digital platforms for buying and selling NFTs. In fact, these platforms allow people to store and display their NFTs as well as sell them to others for cryptocurrency or money. In exchange for a fee, the NFT marketplace will typically handle the transfer of an NFT from one party to the other. Some of the renowned NFT marketplaces include OpenSea, Rarible, SuperRare, Nifty Gateway, Axie Marketplace, and NBA Top Shot Marketplace, etc.

Which Indian and global celebrities forayed into the NFT space?

Considering the hype behind NFTs, many Indian celebrities, too, have been allured by the NFT craze. The legendary actor, Amitabh Bachchan, was one of the first bollywood actors to hop on the NFT bandwagon. The megastar had auctioned some of his father’s iconic poem ‘Madhushala’, as part of his NFT collection, which included autographed Sholay posters and other memorabilia connected to the film. 

Superstar, Salman Khan launched his NFT collection based on his movie Dabangg. As per reports, around 1 million Bolly tokens were sold in the first three hours of the launch. Another cinema legend, Rajinikanth has also joined the hype behind NFT and launched his NFT collectibles based on his famous action film, Shivaji The Boss.

Even soccer legend, Lionel Messi, has joined the NFT space, introducing his NFT collection, ‘Messiverse.’ The said NFT collection highlights his career-best performances. Further, popular artist, Snoop Dogg, has also launched a new NFT series consisting of audio and video elements. 

With the introduction of digitisation, NFTs have had the opportunity to to flourish and find their niche among their admirers. Though 2022 has been brutal for cryptocurrencies, the same does not hold true for NFTs. In fact, the NFT fever and fervor aren’t yet subsiding, and we might see more celebs joining the NFT bandwagon.