NFT: Meaning, How it Works, Application Examples and Reasons to Buy

10 min read

Curious about what NFT is? In fact, non-fungible token or NFT, is a type of digital asset that is booming in popularity.

From visual art to food and tweets which is not common, this one object is predicted to be causing a phenomenal effect tulip mania among young investors.

In fact, according to the page Coindesk, the revenue earned for NFT itself since November 2017 has reached 174 million US dollars. Pretty awesome, right?

So, really, what is meant by NFT? Is its value commensurate with its popularity? Here’s the explanation that Glints has summarized for you.

What is NFT?

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Before discussing how it works and the steps to buy it, we need to review what NFT is first.

Launch page ForbesNFT is a digital asset that represents real-world objects such as paintings, art, music, items in gamesto short videos.

They are bought and sold online on lineoften paid with cryptocurrencyand is generally encoded using software basis similar to assets crypto other.

Although they have been around since 2014, NFTs are now gaining popularity as they are considered a convenient method for buying and selling digital art.

NFT is also generally rated as one of very limited transaction processing and has a unique identifier code.

This fact is in stark contrast to most digital creations, the supply of which is almost always unlimited.

Well, even so, anyone can see the full range of digital works that are being sold.

Then, why do people want so much non-fungible tokens? This happens because NFT allows buyers to have items the original.

Not only that, NFT also contains built-in authentication, which serves as proof of ownership.

How NFT Works

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In fact, NFT is part of blockchain. Therefore, the NFT buyer will be able to verify that he is the sole owner of the asset he purchased.

Once paid, no one can cancel the ownership rights to the NFT held by the buyer.

NFTs are also digital assets that cannot be reproduced over and over again. The NFT owned by the buyer is unique and can be proven through proof of purchase in the blockchain with crypto currency.

For example, a tweets from Twitter CEO Jack Dorsey was auctioned off as an NFT and sold for $2.9 million.

Well, anyone can indeed screen shot and owns the tweet. However, only Jack Dorsey and NFT buyers can sell it.

Then, in order to be traded, NFT must go through a process mint NFT.

What is process mint NFT? It is a process of change files digitally into crypto collections or internal assets blockchain, as expressed by Ethereum.

The process requires marketplace as a third party or agent mint, such as OpenSea, MakersPlace, Mintable, or Theta Drop.

Difference between NFT and Cryptocurrency

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After reading the definition of what an NFT is, you might think that it is an asset similar to cryptocurrency.

That’s not the case. The two assets cannot simply be considered the same thing.

Why is that? Because, according to the page Asia Onethe main difference between NFT and cryptocurrency located in the word “fungible”.

What is meant by object?fungiblein NFT? The term actually implies that it can be exchanged for objects of similar value.

For example, an asset worth 10 US dollars can be paid for with 2 assets costing 5 US dollars. In addition, 1 Bitcoin can also be exchanged for an object for 1 Bitcoin.

Not only that, there are differences in their goals as well. If you buy cryptocurrencybasically you will exchange currency like in money changer. For example buying 1 Ethereum for 2,840 US dollars.

Then, you will keep it until one day the price of Ethereum goes up and you will sell it.

Meanwhile, like a smartphones, each non-fungible tokens has some sort of IMEI, specs and features that make it unique.

It is these aspects that cause NFT to be referred to as an asset and not an asset cryptocurrency

Example of NFT Application

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As Glints has pointed out, NFTs are digital assets based on blockchain which can represent certain objects, such as paintings and other properties.

They are considered as one of the best methods of buying and selling digital assets. This is because NFT provides ownership certificates that can only be accessed by buyers and sellers.

So, based on this, NFT has been applied in many industries, from the business sector to the arts.

Here Glints curated some examples of its implementation for you.

1. NFT in the arts sector

As is well known, NFT is one of the latest technologies that are currently being used boom in the world of art.

This is true because its characteristics and uniqueness have re-evaluated the digital art sector.

NFT itself offers security for works to be published online on line.

For those of you who don’t know, the content that is disseminated widely on line usually can be claimed easily and can cause losses for the maker.

Technology blockchain in the NFT provides guarantees for the artist for the ownership of his work. It is a way for digital artists who have been struggling with the dangers of plagiarism and creative theft.

System smart contracts The built-in NFT technology also allows artists to view and record royalty percentages each time their work changes hands.

2. NFT in the business sector

The next sector that is implementing NFT carefully is the business industry.

In it, NFT is often used as a link between physical assets, such as proof of ownership of land or other property.

A physical deed of ownership that can be stored is considered safer in blockchain with a short verification process.

Buyers also don’t have to worry about the danger of valuable certificates being lost or stolen by others. The reason is, their ownership data has been recorded in the blockchain.

3. NFT in the entertainment sector

An example of a recent application of NFT is in the entertainment sector, such as games, sports and collectibles.

NFT is now opening the market for collectibles which are considered to have great potential.

Some of the most popular collectibles are game footage from NBA Top Shot, virtual cats from CryptoKitties, and unique avatars from CryptoPunks.

Third collectible items has a value that is predicted to reach millions of dollars.

Market gaming NFT based and blockchain It is also one of the most promising sectors in the crypto world.

Very famous NFT games are CryptoKitties and Axie Infinity.

Cryptokitties requires you to collect, raise and breed unique digital cats.

On the other hand, in Axie Infinity, players must collect NFT-based digital pets called Axies with the aim of fighting other players.

Most NFT games use schema pay-to-earns, where players can earn tokens by actively playing the game.

Reasons to Buy NFT in 2022

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As Glints has already pointed out, today, NFTs are the most popular type of digital asset on the market.

Nonetheless, citing page Forbesbecause the market is still new, investing and buying and selling NFT is still quite risky.

In fact, a large part of the NFT market is still speculative and there may be massive price swings similar to what other digital assets have experienced over the past few years.

However, that doesn’t mean you can’t buy NFT. Here are some reasons why you can buy NFT in 2022.

1. Unique and has no exchange rate

quote CompassOne of the things that makes NFT investment attractive is that it has no exchange rate.

The value of NFT assets purchased for IDR 1 billion cannot be exchanged for USD 69,400 or 36.38 Ethereum coins.

In other words, NFT is a digital asset that can be owned exclusively by its buyers with varying values.

2. On the rise

Selling NFT assets through auction is a great strategy for money in this modern era.

Why is that? Because, going back to Glints’ previous explanation, this digital asset is on the rise in the market.

For example, the artist known by the name “Beeple” managed to sell his collage at auction for IDR 82.9 billion.

How to Sell and Buy NFT on OpenSea

If you are interested in buying or selling NFT, there are a few things you should know beforehand.

First of all, you can buy and sell NFT on multiple marketplace special available.

What’s that marketplace NFT? It can be considered a market digital which offers various forms of NFT, from painting to specialty games.

The crypto assets that will be used to buy NFTs usually depend on the platform you choose.

To use crypto assets and transact on NFT trading sites, you also have to transfer them to a digital wallet such as Metamask.

Well, one marketplace which is considered the best for the purposes of buying and selling NFT is OpenSea.

It has various features and options that make the process of buying and selling NFT easier and more reliable.

To be clear, here Glints describes the steps to sell and buy on the site. Don’t forget to take notes, OK!

1. How to Sell NFT on OpenSea

a. Go to profile and set up account

First of all, you have to visit the OpenSea page and open your account profile by clicking on the symbol below.

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Later, you need to connect the account crypto wallet before you can set up a profile. The following is a profile page and crypto wallet setup OpenSea.

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When the word “Connecting” appears, the process of connecting crypto wallet-you will be finished soon.

After that, you can immediately set up an account and add link social media, edit usernamebio, email address, avatar and banners profile.

b. Select NFT art want to sell

In order to sell NFT, the next thing you need to do is work to be sold.

To do so, you have to click on the profile symbol and select the “My Collections” option.

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After finding the NFT that you want to sell, you need to press the “Sell” option available at the top right corner of the page to be taken to listing pages.

Indeed, what is meant by listing page? It is the page where a list of NFTs for sale is available.

c. Decide how to sell NFT

After arriving at listing pages, You will be asked to choose the price, type of auction, duration of sale, and the desired target NFT buyer.

In fact, there are two types of auctions on the OpenSea page, namely: Fixed Prize” and “Timed Auction”

The “Fixed Prize” auction is a selling process in which the displayed NFT price will not change.

Meanwhile, in the “Timed Auction” scheme you will have two options, namely to continue to increase or decrease the price until someone buys it.

Here you also need to choose how long the NFT will be displayed on the sales page.

Option default-it is for 1 day, 3 days, or 1 week. However, you can determine the desired duration independently.

2. How to buy NFT on OpenSea

a. Click the “Explore” option

To buy NFT on OpenSea, the first thing you need to do is to first search for the purchased work.

You can do this by pressing the “Explore” option available at the top of the OpenSea home screen as shown below.

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Later, you will find many options, ranging from art until collectibles. Make sure you choose the option that you really want to buy.

b. Click “Buy Now”

Well, after finding the NFT you want to buy, the thing you can do is to start the buying process.

As Glints explained, NFT on OpenSea is sold with 2 auction methods, namely “Fixed Prize” and “Timed Auction”.

In the “Fixed Price” auction, you can immediately press the “Buy Now” option which is located in the description of the desired product.

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You may be asked by OpenSea to review some details about your purchase prior to finalization.

This they do to ensure that you know exactly what you have purchased and to help avoid scammers which creates a fake NFT with a similar appearance.

If everything looks safe, you can proceed directly to checkout pop-up where available details get the final cost of your purchase.

Later, you will be asked to agree to OpenSea’s terms of service, and click the “Checkout” button to complete the purchase.

c. Click “Place Bid”

Well, the case is different in “Timed Auction”. Here, to buy NFT, all you have to do is to offer the purchase price.

The bid you want to make must be at least 5 percent higher than the previous bid.

To make an offer, you can directly click the “Place Bid” button on the NFT description page as below.

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Again, you may be asked to review some details about the NFT to ensure its authenticity.

After that, choose the currency that you will use to make the offer. Usually there will be an additional fee if you offer a currency that you have never used.

Enter your bid amount and expiration date. The expiration date will give the seller time to make a decision regarding your offer.

You can view all the offers that have been extended by going back to your profile and finding tab “Bids”.

How to Sell and Buy NFT at MakersPlace

In addition to OpenSea, there are a number of marketplace other quality for the purpose of buying and selling NFT, one of which is MakersPlace.

According to the Crypto Wisser page, marketplace This one is quite popular because it is able to accept payments by credit card or PayPal.

Not only that, the security system, UI display, and the transaction process are also considered capable and make the NFT buying and selling experience enjoyable.

Well, here Glints describes the steps to sell and buy NFT on the MakersPlace site especially for you.

1. How to sell NFT on MakersPlace

a. Create an account and upload creation

If you want to sell NFT on this site, the first thing you need to do is to have a Makersplace account first.

The method sign upits quite simple. All you have to do is visit the Makersplace page and register an account there. The instructions are easy to follow, really.

Next, you can directly-upload works of art that have beenmint on the MakersPlace account.

MakersPlace itself will recommend users to upload the best and highest quality versions of their creations.

As an added help, MakersPlace will provide a feature of preserving the authenticity and ownership of your creation, once it is uploaded to blockchain. Interesting right?

b. Include NFT background art

After upload work, you need to tell the background of the work to build an emotional connection with potential buyers.

For any work that you want to sell on MakersPlace, it is very important to include the background and story behind the work.

Why is that? Because, it is usually the customer’s biggest consideration when making a purchase, beyond the quality and price of the work.

c. Determine the relevant price

Next, the way to sell NFT on MakersPlace is to price the work relevantly.

According to the official MakersPlace page, users can consider the cost and time they have spent on the production of works.

In addition, they can also include low prices to encourage popularity. Once the product becomes popular, the seller can immediately increase the price.

d. Stay consistent and share on social media

Finally, so that the NFT you sell can sell well, don’t forget to keep spreading your work consistently.

Consistent here refers not only to the scheduled release of works, but also to the themes of similar and exclusive NFT works.

Don’t let your creations follow the themes of other sellers. This will only make the NFT you are selling look boring and inauthentic.

Besides, share link your NFT sale on social media accounts. This strategy is guaranteed to increase your sales figures quickly.

2. How to buy NFT at MakersPlace

a. Go to “Marketplace” and select NFT

To start purchasing NFT on MakersPlace, all you have to do is visit the “Marketplace” page which has a display like the one below.

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Just like in OpenSea, you’ll find lots of options, from the most popular to the latest offerings.

Before starting to buy, make sure you first choose the right NFT and according to your wishes.

b. Make an offer and click “Make an Offer”

After selecting the NFT you want to buy, you have the option to make an offer by credit card.

However, you can also connect crypto walletlike MetaMask, when choosing to pay with Ethereum.

After entering payment details, go ahead and make an offer for an artwork by clicking “Make an Offer”.

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MakersPlace will inform you of your minimum bid amount before proceeding.

Finally, move the NFT from the platform and into the wallet of your choice. Make sure you have entered the correct address.

Confirm your transaction through the wallet if the offer is accepted by the buyer.

Benefits and Advantages of NFT

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After reading the definition and how it works, it is clear that NFT is a very interesting new form of digital asset.

In a fairly short time, it has attracted the attention of many investors and became one of the big trends in the world of business and investment world.

However, what is it that makes NFT superior in the eyes of investors? What benefits does it offer that you can’t have from other assets?

Here is a brief explanation according to 101 Blockchains.

  • rare and cannot be faked
  • its high value makes it easy to resell
  • eternal and irrevocable ownership rights
  • copyright that can only be held and managed by the buyer
  • high security of assets

That’s Glints’ brief explanation of what NFT or non-fungible tokens and its advantages for investors.

Even though it has just surfaced, NFT is a type of digital asset that has been traded by the public for a long time.

In 2022, NFT is even more popular and is becoming a big phenomenon among investors.

If you have extra money and like to invest cryptocurrencies, NFT is the right digital asset for you.

Well, in addition to the explanation above, you can get other similar information on the Financial channel on the Glints Blog.

In it, there are many discussions about investment terms and tips that Glints has summarized into a short article for you.

Interesting right? So what are you waiting for? Come on, read the collection of articles right now!