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Non-fungible tokens (NFTs) – the latest trend breaking out in the crypto world, are digital collectibles, and spending money on them is no different than spending money on anything else like a physical collectible. The idea of collectibles has always been physical but NFTs are just a new twist on that.
Even though NFTs are being sold like hotcakes, many of us are still scratching our heads, trying to understand what NFTs are and how/where to buy and sell NFTs. Who wants to miss out on a hot trend afterall which is seemingly going to stay?
A Quick Recap
Let’s have a brief overview of what NFTs are all about. In economics, fungible items refer to the units that can be traded for one another. Think of a dollar bill or a bitcoin. Non-fungible, on the other hand, means it is unique and cannot be traded at equivalency or replaced.
NFTs or non-fungible tokens are tokens that live on a blockchain and signify ownership of unique items. A digital file can be easily and endlessly replicated and distributed, making it almost impossible to track the original owner of the digital asset as everyone can have an identical copy. Then how to tell who originally owned the file/asset? NFTs solve this problem.
To understand this concept, suppose a digital artist has created a piece of digital art. The artist can mint or create an NFT out of their artwork. The NFT representing their artwork contains some information about it such as a unique fingerprint of the file, a token name, and a symbol. The artist becomes an owner once this token is stored on a blockchain.
Furthermore, the artist can create a transaction on the blockchain to sell the token. The blockchain makes sure that this information can never be tampered with due to a unique address that is issued to it.
It also allows a person to track the ownership status of the token and for how much it has been sold in the past.
It is important to note that the artwork itself is not stored on the blockchain, but only its attributes like the unique fingerprint/ signature, token name, and symbol.
Why Do People Buy NFTs?
The real question that pops up in our heads is ‘why would someone pay thousands of millions of dollars for something they can simply access for free or take a screenshot of on their smartphones?’ Well, here’s the deal:
Top NFT Marketplaces
Now that you have the basic idea about the NFTs, the next point of concern is ‘where to buy and sell NFTs’. Let’s have a birds-eye view of the top NFT marketplaces.
OpenSea, being the world’s first and largest NFT marketplace, is one of the most popular platforms reaping the first mover’s advantage. OpenSea is a major platform for buying, selling, and trading NFTs. Known as the Amazon of NFTs, OpenSea holds a vast variety of NFTs that cater to every taste from virtual real estate to in-game items like avatars, digital artwork, gifs, music, and trading cards. OpenSea rightly calls itself The NFT marketplace with everything for everyone.
In August alone, OpenSea recorded $3.3 billion in digital merchandise transaction volumes on Ethereum. Despite being a giant amongst all the NFT marketplaces, OpenSea is not complicated to use for both creators and buyers.
If you want to buy an NFT, all you have to do is search up what specifically fascinates you or browse through a variety of NFT collections. Once something catches your eye and you decide to buy it, you can then put in an offer and wait for it to be accepted.
Besides all the pluses of OpenSea, it is difficult for creators to stand out as the platform is overly saturated (including many low-quality NFTs as well).
Showcasing a huge variety of collectibles and digital pieces of art, Rarible is one of the largest and leading NFT marketplaces. A fun fact about Rarible is that the users who own a specific token ‘ERC-20 RARI’ (native cryptocurrency of Rarible) get to raise their voice in decisions regarding the platform’s future. This governance token is designed as a reward for the active users in the form of an influence or a voice over the platform development.
Rarible is a highly competitive NFT marketplace but it comes with its own pros as well. The option of ‘lazy minting’ is worth mentioning here that allows you to mint NFTs for free. It is also largely a community-driven NFT marketplace displaying a wide range of quality NFTs like OpenSea.
The interface of Rarible is easy to use and no different than that of OpenSea but holds a lot of flickering visual content. Along with its own native currency, you can also use a variety of other crypto wallets in Rarible.
SuperRare, as the name suggests, holds exclusive NFTs and one cannot find multiple copies and editions of the same digital asset on this platform or elsewhere. Working closely with the artists, SuperRare promotes the unique artwork of renowned artists.
SuperRare is a similar but high-end alternative to Rarible in terms of its interface. Where Rarible greets you with flickering videos and flashy gifs, SuperRare’s interface is kept minimal and less distracting.
The artists can submit their work on SuperRare and wait for approval before listing it. As SuperRare is highly recognized within the art-collecting community, artists can earn not only monetary benefits on each sale but great exposure as well.
But as well-known artists get more coverage and benefit monetarily on this platform, the lesser-known artists would find it difficult to get recognition here due to the exclusivity.
CryptoPunks/ Larva Labs
CryptoPunks is a series of 10,000 unique and artsy collectible characters with aesthetic pixels and distinctive features. These characters are stored on the Ethereum blockchain with proof of ownership. CryptoPunks is one of the earliest examples of NFTs stored on Ethereum.
Out of those 10,000 uniquely generated characters, no two characters share the same attributes or are alike. Originally, anyone having an Ethereum wallet could claim these characters for free. But now, they can only be purchased via the marketplace (Larva Labs) lodged on the blockchain.
Before you head to buy, bid on, or offer punks for sale, know that each color code (the backdrop color of each Punk) displays a unique trait. For instance, the ones with a blue background are not for sale (holding no bids too). Whereas the Punks put up for sale by their owners have a red background. The Punks with a purple background are the ones with active bids on them.
Buying a punk here would cost a lot mind you! Currently (Nov 22, 2021), the lowest priced punk available for sale is worth 88.5 ETH (USD 369,129.96).
With more platforms for buying, selling, and trading of NFTs popping up every day, the NFT world is moving fast. While the hype is real and can drive you to make spontaneous decisions, it is important to determine which marketplaces to look out for!
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