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NFTs or Non-Fungible Tokens are digital assets. They represent real-world objects; some good examples are digital art, music, videos
What are NFTs, and where is the best marketplace to buy and sell them? These are some frequently asked questions that beginners want to get answers to. To start with, NFTs are the latest trend in the cryptocurrency space. Through cryptocurrency, you can always buy and sell NFT digital arts, music, videos, digital memorabilia, and a lot more.
But how exactly does buying and selling NFTs work? That’s exactly what the rest of this article will focus on. As you read on, you’ll find every information you need to know about NFTs, their marketplaces as well as things worth picking at the marketplaces. So, without further ado, let’s get straight down to business.
What are NFTs and how exactly do they work?
What do NFTs stand for?
Before going ahead to talk about how NFTs work, you need to understand that NFTs stand for Non-Fungible Tokens. Now, let’s break down this word (non-fungible) so you can better understand what NFTs are all about.
Non-fungible means something is unique and you can’t replace it with something else. That is not the same as Bitcoin, a fungible digital currency that you can always trade for another bitcoin. One highlight of NFTs is that they’re different from each other. Each of them has a digital signature, which makes it pretty impossible for you to exchange or equal one for another. That’s why NFTs are non-fungible.
What are non-fungible tokens?
According to Forbes, NFTs or Non-Fungible Tokens are digital assets. They represent real-world objects; some good examples are digital art, music, videos, and in-game items. People buy and sell these digital assets online with cryptocurrency. Interestingly, the tokens get encoded with the same underlying software as several cryptocurrencies that exist out there.
Here’s how NFTs work
So, how exactly do NFTs work? According to ethereum.org, the way NFTs work is pretty much different from that of ERC-20 tokens. The biggest difference between these two types of tokens comes from the fact that each NFT token is unique and non-divisible.
Most NFTs out there are part of Ethereum’s blockchain. What does that mean? It’s pretty simple; with NFTs, you can always claim ownership of any unique digital data. And by using the ethereum blockchain as a “public ledger,” you can easily track these pieces of digital data.
NFTs work in a way that each of the tokens can only have a single owner at a time. Also, each token has unique ID & metadata, which can never be replicated by another token.
To own a non-fungible token, you need to go through a minting process. Through smart contracts, which help to assign ownership, you can mint an NFT. Once you mint an NFT, you automatically execute a code, which gets stored in smart contracts. That said, here are the few simple steps for minting an NFT below:
- First, you need to create a new block.
- After that, you’ll be required to validate certain information.
- Last, you’ll have to record the information into the blockchain.
What is worth picking up at the NFT marketplace?
The “NFT marketplace” is a different topic on its own – you can find information about it in the next section of this post. Speaking of digital assets that are worth picking in the NFT marketplace, you need to understand that there are a lot of them.
One example of an item that NFTs could represent at marketplaces is Digital Art, such as GIFs, Collectibles, or Music. They could also represent real-world items, such as event tickets, signatures, or legal documents.
Where can you buy and sell NFTs?
NFTs have been around for some years but they gained so much popularity in 2017. With the increased popularity of NFTs across the world, there are now tons of marketplaces you can use for trading them. You can check below to see the list of the top 3 best NFT marketplaces online.
1. OpenSea
Pros
- OpenSea NFT mining tool is easy to use
- Allows creators to create their smart contracts for digital collections or in-game items
- Offers a variety of digital currency
- Low platform costs
- Supports all types of NFTs, including Art, music, collectibles, and sports
- Supports Ethereum, polygon, and Klatyn blockchains
Cons
- It only allows cryptocurrency as a mode of payment
OpenSea is the first and biggest peer-to-peer (P2P) NFT marketplace worldwide. Launched in December 2017, OpenSea is an American online non-fungible token marketplace. The company, co-founded by Devin Finzer and Alex Atallah, has its headquarters located in New York City.
OpenSea is very popular because of many things. One of them is the fact that the platform is a gas-free marketplace for NFTs on the Polygon blockchain. Another highlighting feature of OpenSea is that it includes both ERC-1155 and ERC-721 tokens. Besides, the platform’s mining tool makes it easy for creators to create their NFT collections.
2. Nifty Gateway
Pros
- Nifty Gateway only includes digital art, verified, and curated drops.
- It allows buying tokens with fiat currency.
- It offers limited Open Editions.
Cons
- This platform is mostly dominated by Celebrity NFTs.
Nifty Gateway, founded in 2018 but acquired by the Winklevoss twins, is a digital art online auction marketplace for NFT art. If what you’re seeking is a trusted high-end NFT marketplace, then this platform is the right place for you. On Nifty Gateway, you’ll find top content creators, celebrities, and big brands.
As a new buyer, one reason to use this platform is that it allows you to purchase NFTs with fiat currency. As such, you can always use your credit card directly instead of linking your cryptocurrency wallet.
3. Rarible
Pros
- Rarible includes various NFT types, such as digital art, photography, and games.
- It supports three different blockchains, Ethereum, Flow, and Tezos.
- It’s a community-owned platform with low carbon and gas fees.
Cons
- It’s mostly dominated by big brands
Rarible is a popular NFT marketplace where you can buy or sell items, such as digital art, photography, and games. This platform usually attracts top sports, gaming, and media brands across the world. Rarible is one of the few marketplaces that promotes decentralization and that’s mostly because it’s community-owned.
One highlight of Rarible is its “easy to use” interface. As a beginner, you’ll certainly enjoy using the NFT marketplace for your trading needs.
What is the point of NFT?
NFTs have tons of importance in today’s world. For instance, in the photography industry, non-fungible tokens make it easy for collectors to confirm the authenticity of the assets they’re looking to purchase. Another benefit of non-fungible tokens is that they help in the creation of economic opportunities.
Conclusion
An NFT or non-fungible token is a digital asset that could represent a lot of things, such as real work items and digital art. NFT can be anything. It could be a video, game assets, or music.
OpenSea, Rarible, and Nifty Gateway are arguably three of the top marketplaces where you can buy or sell NFT. Other places you can also try out are the Axie Marketplace, Larva Labs, SuperRare, Foundation, and Mintable.
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