How NFTs will bring another billion users into cryptocurrencies
Five things creative people must know about NFTs.
NFTs - A word that seldom resonates with people from the creative world has now become the talk of media-town, owing to its futuristic and intriguing features. Part of the allure of these tokens comes from its ability to empower both content creators and investors. For instance, when people buy an NFT or Non Fungible (unique) Token, they purchase the rights to the original artwork that the token represents.
In the not too distant future, NFTs can represent ownership of any item that is unique to the user. Other than art, people can "mint" NFTs for a variety of items with unique properties, from concert tickets to real estate deeds. However, for NFTs to become mainstream, a better understanding of how these tokens can help new media creators and others can add momentum to the current NFT rage.
NTF users sell these tokens on blockchains, thus verifying the transaction and validating the originality of the art that the token represents. The token ensures that at any point of time, each item has one official owner and the details of this owner are easily verifiable. In other words, NFTs protect content creators from having their art duplicated.
When investors buy these tokens, usually at an NFT marketplace, the new owner gets possession of the art through a smart contract - an enforceable agreement by means of a computer protocol. When it comes to employing smart contracts for NFTs, these protocols can include a royalty agreement, which brings us to how NFTs are revenue making too.
Owners can resell NFTs, or the rights of the item in question, for a profit. Because, the original creator has already been established, every time the NFT changes hands, the owner can claim additional revenue. The original creator can even decide how many replicas of the token can exist to drive scarcity and thus increase the value of the asset.
But, NFTs have their limitations.
Of late, other crypto assets like bitcoin and now even NFTs have come under scrutiny for its impact on the environment. Since "minting" these token codes on the blockchain requires huge amounts of computing power, NFTs can create sustainability issues. But crypto enthusiasts argue that NFTs are not the ones to blame since the problem lies in using blockchains that still depend on non renewables for their computing powers.
When it comes to investing in the token itself, it is impossible to estimate its long term value. At the moment, NFTs are still a work in progress and their worth is entirely tied to aesthetic and sentimental value of the art it represents. Some consider this as the main reason why NFTs can be highly speculative and risky to invest in.
However, when it comes to NFTs, the pros often outweigh the cons, at least for creators who want to protect their intellectual property rights.
Anyone can create or "mint" an NFT to sell it on a dedicated NFT marketplace:
- You will need an active crypto wallet with funds in crypto, such as Ether, that will cover "gas" or blockchain fees involved in minting.
- Most marketplaces have a "create" button that will allow you to upload the work.
- That’s it! You can sell the freshly-minted NFT or even auction it.
So far, NFTs have had some interesting use cases and have represented collectables, images, music, videos, including memes and tweets! Given its unique purpose among digital artists, gamers and art collectors, NFTs could drive mainstream adoption of crypto assets. More importantly, with more awareness, these tokens could onboard another billion users from one niche to another.
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