What Is an NFT? 2023 Cheat Sheet for Marketers

In 2021, NFT users doubled to about 550,000, and the market value of NFTs grew by 37,000%. NFTs are now an $11 billion USD industry and growing everyday.

So, are NFTs the next big monetization opportunity for creators and brands? Executives at most popular social media platforms seem to think so.

Meta recently expanded digital collectibles to 100 countries on Instagram and Facebook, Twitter allows NFT profile pictures, TikTok experimented with selling NFTs, and Reddit just launched their own NFT marketplace.

Here’s everything you need to know well-nigh NFTs to take wholesomeness of all the new features the social platforms are launching.

What is an NFT?

An NFT is a one-of-a-kind digital identification document that exists on a blockchain to verify authenticity and ownership of assets. NFT stands for Non-Fungible Token.

An NFT itself can be a digital item, or represent ownership of a physical object. Only one person can own a specific NFT at a time. Since NFT transactions take place on a secure blockchain, the ownership record cannot be copied or stolen.

They’re an important part of the movement toward Web3: A decentralized internet run on a blockchain where content and resources are securely controlled by individuals, not corporations.

How does an NFT work?

Think of an NFT as a famous painting. It’s sold many times over the years, but only one painting exists that changes hands. It’s a real item.

In other words: It’s non-fungible. Unfungible. The opposite of fungible. What a fun word, eh?

In investing terms, non-fungible ways “irreplaceable.” A non-fungible windfall cannot be hands or virtuously replaced with another.

Cash? Totally fungible. You can trade a $20 snout for flipside and it’ll function the word-for-word same.

Your car? Non-fungible. Sure, there are other cars in the world but they’re not exactly yours. They have variegated mileage, variegated wear-and-tear, and variegated fast supplies wrappers on the floor.

How to create an NFT

It’s easier than you think. To create and sell an NFT, you need 3 things:

1. A blockchain wallet worth that supports Ethereum (ETH): Popular options are MetaMask and Jaxx. You can create NFTs with other blockchains, like Polygon, but most marketplaces use Ethereum.
2. Some ETH cryptocurrency (in your wallet).
3. An NFT marketplace account: Popular options are OpenSea and Rarible, though there are many options.

OpenSea is very beginner friendly, so I’ll demo that.

1. Create an OpenSea account

Once you’ve set up a blockchain wallet, sign up for a self-ruling OpenSea account. Clicking any of the top navigation icons will ask you to connect your crypto wallet, which will create your account.

2. Connect your wallet

The process is slightly variegated for each wallet. Follow the prompts to connect your chosen crypto wallet. (I use MetaMask.)

3. Create your NFT

Once you’ve linked your wallet and confirmed your account, go to Create. You’ll see a fairly straightforward form.

You need to have a digital thing to NFT-itize. It can be an image, video, song, podcast, or other asset. OpenSea limits the file size to 100mb, but you can link out to an externally hosted file if yours is larger.

Of course, it goes without saying that you need to own the intellectual property rights and copyright for whatever you want to sell, just like any other digital or physical product.

For this demo, I created a quick graphic.

The only mandatory fields are your file and a name. It’s that easy to get started.

Here’s a quick rundown of the optional fields:

• External link: Link to a higher-resolution or full version of the file, or a website with spare information. You can moreover link to your unstipulated website so buyers can learn well-nigh you.
• Description: Just like a product unravelment on an ecommerce site. Explain your NFT, what makes it unique, and make people want to buy it.
• Collection: The category it appears in on your page. These are typically used to group variations of a series together.
• Properties: These are the nature that make this NFT unique from others in your series or collection. Or, just increasingly information well-nigh it.

For example, avatar NFTs usually list out what makes each avatar unique, such as eye color, hair, mood, etc.

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• Levels and stats: These are often used in the same way, but substantially these are properties ranked on a numerical scale instead of the text-based properties above. For example, how many editions or versions exist of the NFT.
• Unlockable content: A text box that is only viewable to the owner of the NFT. You can put markdown text here, including a link to a website or other file, instructions to redeem bonus material—whatever you want.
• Explicit content: Self explanatory.
• Supply: How many of this particular NFT will overly be misogynist to buy. If set to 1, then only 1 will overly exist. If you want to sell multiple copies, you have to specify the total number here. This gets encoded in the blockchain with your NFT, so you can’t transpiration it later.
• Blockchain: You can specify the blockchain you want to use to manage your NFT sales and records. OpenSea supports Ethereum or Polygon right now.
• Freeze metadata: After creating it, enabling this option moves your NFT data to decentralized file storage. This includes the NFT file itself, although doesn’t include any unlockable content. You will never be worldly-wise to edit or remove your listing and it will exist forever.

Here’s my finished NFT:

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Now, this was a quick thing in order to do this demo (yay for learning together), so I don’t expect to be a millionaire overnight.

NFTs aren’t only for art, though. Here are other things you can sell as NFTs:

• Tickets to an event.
• An original song.
• An original mucosa or documentary.
• An image, video, or audio file that comes with a bonus, such as a consultation, service, or other sectional benefit.
• Ex-Twitter CEO Jack Dorsey plane sold his first Tweet for $2.9 million.

How to buy NFTs

The word-for-word process will vary depending on which marketplace you buy from, but here’s how to buy an NFT on OpenSea.

1. Sign up for OpenSea

If you haven’t already, sign up for OpenSea and connect your crypto wallet.

2. Find an NFT to buy

On the NFT’s detail page, you can read increasingly well-nigh the item, what it is, and any special bonuses or things to know well-nigh it. For example, this NFT painting uses Artificial Intelligence to alimony waffly over time — forever. I don’t plane know how that’s possible, but it sounds cool.

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3. Add the correct value of ETH to your wallet

Whether you’re going to pay full price or make an offer, you need currency to buy it. In this case, it’s Ethereum (ETH). Add unbearable to imbricate the purchase price to your crypto wallet.

You’ll moreover need a little bit uneaten to imbricate the “gas price.” Every blockchain transaction has a fee for processing the transaction, just like ecommerce payment processing fees. Gas prices fluctuate throughout the day depending on demand and other factors.

4. Buy it or make an offer

Just like eBay, you can make an offer which the seller may or may not accept, or if you really want it, buy it right away.

The sale currency is ETH, so for this NFT, offers are in WETH. It’s the same currency, although WETH is like pre-authorizing a credit vellum prior to a sale.

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5. Show off your new NFT

NFTs you own will show up in your gallery at the marketplace or wallet they’re stored in:

Source

You can plane buy monitors for your home, like Tokenframe, that connect to popular NFT wallets and exhibit your NFT art collection.

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Should you invest in NFTs?

I can see it now: The year is 2095. A Gen Y21K-er taps the neural interface over their ear. A holographic TV screen appears to rampage 2024 reruns of Antique NFT Roadshow…

But seriously, investing in anything has risk and NFTs are no different. Do your own research and ensure you’re well-appointed with words like “blockchain,” “stablecoin,” “DAO,” and other crypto jargon surpassing diving in too deep.

Investing in NFTs could result in:

• Massive profit — like a really, really ridiculous 79,265% ROI in one year for an illustrated monkey. Bored Ape Yacht Club NFTs were “minted” (created) at a value of $189 USD in 2021 and the cheapest one is now worth $150,000 USD.
• Long-term financial appreciation.
• Discovering and supporting new artists.
• Being cool.

But, investing in NFTs could moreover result in:

• Losing some or all of an NFT’s value, as soon as overnight.
• An unbalanced overall portfolio if ignoring traditional resources in favor of NFTs.
• Losing all of your crypto assets, if the wallet or blockchain it’s stored on suddenly ceases to exist.

Frequently asked questions well-nigh NFTs

What is an NFT and how does it work?

An NFT (Non-Fungible Token) is a digital windfall on a blockchain that certifies ownership of a digital item. Anything can be an NFT: Digital art, music, video content, and more. Each NFT represents one unique asset.

Why would anyone buy an NFT?

NFTs are a perfect investment for fans wanting to support their favorite artists, and for investors willing to take a risk for potentially upper future returns.

In 2021, Kings of Leon became the first wreath to launch an tome as an NFT hodgepodge which earned over $2 million USD. It included special NFT-only perks like front-row concert seats and an expanded version of the album.

How do you make money off NFTs?

If you’re a creator, you can make money off NFTs by selling your artwork. It’s competitive and not guaranteed, but this 12 year old has made $400,000 so far.

If you’re a collector or investor, NFTs work like any other high-risk but potentially upper reward speculative investment, such as real estate.

What is the most expensive NFT overly sold?

Pak’s “The Merge” is the most expensive NFT overly sold at $91.8 million USD. It moreover holds the record for the most expensive piece of art overly sold by a living artist—including on our physical plane of existence.

What are NFTs used for?

NFTs are used as proof of ownership of digital assets, such as art, music, video, and other files. Since NFT transactions use blockchain technology, their records of ownership are 100% verified, thereby eliminating fraud. Ownership an NFT is like signing an unbreakable smart contract.

What are some examples of Non-Fungible Tokens?

NFTs are digital tokens on a blockchain that are bought or sold to transfer ownership of a digital file, such as a piece of art, music, or video. NFTs can moreover represent physical items.

Can NFTs be fake?

Yes. NFTs verify ownership, but someone can still reprinting or steal the content inside, like any digital file. Scammers may try to sell those files as new NFTs.

To stave scams, buy from reputable marketplaces, buy directly from an artist’s official website or verified marketplace account, and trammels the blockchain contract address surpassing buying, which shows where the NFT was created.

Can I just yank something and make it an NFT?

Sure. An NFT is a digital asset, which can be an image file. Many artists sell digital paintings and illustrations on NFT markets.

However, many successful originative NFTs use software or AI programs to create thousands of unique variations, such as the popular CryptoPunks collection.

How do you pronounce NFT?

Most people say it as it’s spelled: “En Eff Tee.” Just don’t undeniability it a “nifty.”

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