So everyone on Twitter is changing their profile photo to an NFT?

An NFT sold for what now?

Ok, stop. What is an NFT and let's talk about it right now.

An NFT is short for non-fungible token and is a techie concept found within the crypto space. If you need a refresher on What is Crypto? then click this link to read more about it.

So, a non-fungible token is like a token created on the Ethereum, Poloygon, Binance, or other network. It has a unique value because it is not affected by changes in supply, but rather the different NFTs are so unique that there are no two NFTs exactly alike. The use of NFTs is for digital collectibles which are virtual items preserved safe from destruction so they can be traded at any time without risk of devaluation.

Why are we buying NFTs?

NFTs have become popular within the cyrpto art space where various items of digital items like drawings, pixel renderings, paintings, photos, and looping gifs are tokenized and added as a limited collection. Some are solely collections within platforms such as OpenSea where the collection can embrace Smart Contracts to manage the trading of each NFTs. These collectibles are expected to become valuable enough so they can be used as a currency of value for transactions.

While NFTs get new attention from the mainstream, there is a growing concern of what will happen to crypto art and crypto NFTs once regulatory bodies step in and stop doing business with digital collectibles that utilize blockchain technology. While the U.S. government has been slow to react to the blockchain, many European nations have been quick to pass new legislation on crypto assets and might be considered a bad actor in the NFT space.

Is it a good time to buy an NFT?

There are several ways a user can get a hold of an NFT. Purchasing from your favorite platform is one way, going through an exchange is another, but creating your own is also possible - all of them are legitimate ways to obtain tokens. When purchasing, be aware of the associated risks. Always check with your investment advisor before making any investment decisions.

How to Purchase an NFT?

Every crypto platform has its own unique way of working so refer to each website for more information on purchasing NFTs. Here, we will show you how to purchase an NFT through OpenSea.

OpenSea is a crypto platform that works with the Ethereum network (as well as others like Polygon) and allows users to exchange goods with each other. The goods can be of several varieties including non-fungible items like CryptoKitties, unique collectibles, or things like clothing or artwork.

Buying an NFT through OpenSea does involve some investment so be careful when purchasing. Below, we will describe how to buy an NFT through OpenSea.

First, sign up for OpenSea by clicking here. Once you have signed up, click on the ‘buy’ icon at the top right hand side of your screen. On the next page, you will see various options for collecting unique crypto assets. Select CryptoKitty to begin the purchasing process.

On the main page, you will see a list of CryptoKitties that are available for sale which you can then select. You need to select the amount of tokens you want and then fill in your personal and payment info and then hit ‘Buy’.

Once you have filled out all your information and click purchase, the tokens will be sent to your OpenSea Wallet once completed.

You will also get a notification that the purchase has been completed. You can check your transaction by clicking on your transaction history.

Once you get the tokens in your OpenSea Wallet, you can exchange them for other options like other NFTs or crypto currencies.

Is it safe to buy an NFT?

The Ethereum network has recently become the default brand in the cryptospace, but there are even more platforms out there - some of which may not be as well known. That being said, OpenSea is a platform that provides a safe environment for purchasing NFTs through the use of escrow.

The use of escrow services might be important considering how much money is changing hands within the crypto space. There are several ways you can receive your tokens after the transaction has been completed. You can have it sent to your Ethereum address, or you can have your order refunded to OpenSea.

How to create an NFT?

Creating an NFT is becoming easier as more people buy, sell, and trade NFTs. There are several ways to create your own tokenized item. If you are looking for a way to make some quick money, try creating your own asset or digital artwork and selling it on OpenSea or another platform. The process of doing so is simple: choose a character from the Ethereum blockchain and upload it as your avatar. Then, use OpenSea to create your own token and start selling digital items and collectibles.

The History of NFTs
The first non-fungible token was allegedly started by "Kevin McCoy, on on May 3rd, 2014. He minted his non-fungible token 'Quantum,' way before the crypto art market exploded." Then in 2017, CryptoKitties appeared on the market. "CryptoKitties is an early blockchain game that enables you to buy, sell, collect, and breed digital cats. CryptoKitties pioneered the ERC-721 non-fungible token standard and introduced one of the first non-financial use cases for blockchain technology."

In 2016, OpenSea.io joined the list of companies heavily investing in this technology. OpenSea is a decentralized marketplace for digital assets, and was created by former Reddit engineer, Jason Goldberg. Sometime after the launch of Polygon (which is a marketplace for rare and limited edition digital and real-world collectables) in September 2017, they now allow their users to convert those assets into non-fungible tokens. 

In June 2021, the rap mogul Jay-Z purchased an NFT then uploaded it to his Twitter profile photo. He then turned right around and, according to High Snobiety, "JAY-Z has commissioned digital artist Derrick Adams to create a one-of-one animated digital collectible [NFT] that is meant to “recontextualize” the album [Reasonable Doubt] cover, which was originally released exactly 25 years ago."

I expect lots of changes to happen in this area (more companies offering NFTs, systems relaying on NFTs), and for consumer use cases to emerge. I also expect some serious growth in this space during 2022.

NFTs in 2022 and beyond

As with Jay-Z, other well establish brands such as Visa are venturing into NFTs which clearly has brought NFT into the mainstream regardless of who the hell actually knows what they are, how we keep them, and just why. We can see a lot of growth in this realm with some very high profile companies getting involved.

In the future we will see all sorts of collectibles and NFTs hitting the market; we will see supply and demand models as well as price discovery. As with most things that have been discovered out of the ashes of the 2017 ICO craze, NFTs are a relevant tool to use now, but as with any technology, it is just a tool. The real value is in the overall business behind those who implement those tools.

I predict you will see a lot of companies that have been formed with the sole purpose of offering NFTs for sale for a profit. We will also see a large number of established companies creating their own NFTs and bringing them to market. I fully expect that there will be a lot more partnerships coming out in the near future where established companies do not end up purchasing or creating these NFTs from scratch, but rather they partner with those who offer this service.

Disclaimer:
Cryptocurrencies are highly speculative and risky investments. It is important to do your research before choosing any coins or tokens you want to invest in. Cryptocurrencies can still be a solid investment, but you should not expect huge returns in the short term.

This post is by no means meant to discourage anyone from investing in cryptocurrencies and blockchain technology. I am merely trying to convey that there are a lot of unknowns and high risks involved with this new technology. It may take years for cryptocurrencies to catch on, but there is also the possibility that they will never break into mainstream use at all.

I am not an expert in economics, trading, finances, or crypto trading and am not providing any advice.