What is an NFT ?
NFT is an acronym for “non-fungible token” and you can think of it as a digital collectible, such as a trading card.
An NFT is similar to a cryptocurrency in the sense that it trades on a blockchain and has a monetary value attached to it. The difference between a cryptocurrency and an NFT though is that an NFT has certain characteristics that make it different from other NFTs, even if the two NFTs seem similar to one another.
For example, if you trade 1 bitcoin for another bitcoin, you are trading one identical thing for another. There is no loss of value on either side of the transaction — you both end up with 1 bitcoin. But if you trade 1 NFT for another NFT, they can be drastically different even if they appear to be the same. This is because an NFT includes a deeper layer of characteristics that make it different from others. These characteristics can include metadata, visuals, serial numbers, etc. and can all affect the value of the NFT based on what characteristics are valued by the people who buy and sell them.
NFTs therefore create exciting monetization opportunities for brands and collectors, as they are provably authentic, safe to trade, and can include all different types of artwork and branding opportunities.
NFTs are also sometimes called Niftys, non-fungible tokens, or Crypto Collectibles. NFTs trade on a number of different blockchains, however the WAX Blockchain is by far one of the most active blockchains for NFT transactions.
What Are NFTs?
NFTs work essentially as a database entry for any type of good. Perhaps the easiest example is the most popular NFT in blockchain history, CryptoKitties. There are thousands of CryptoKitties in existence, but they are not created equal.
What are some examples of NFTs?
Examples of popular NFTs include:
- Topps “Garbage Pail Kids” trading cards, an iconic cult-classic collectible since the 1980’s reimagined as NFTs
- William Shatner, the legendary actor whose roles include Captain Kirk in Star Trek, released personal memorabilia to the public as trading cards
- Blockchain Heroes, an original trading card series featuring the likenesses of personalities in the crypto and blockchain space
- Prospectors, a popular blockchain-based game where players earn NFTs based on their gameplay which help improve their in-game performance
- CryptoKitties, the “OG” popular NFT series that skyrocketed NFTs to popularity back in 2016, and even though they quickly fizzled out, they are one of the most recognizable names in the NFT world since they were the first to be successful
Since NFTs trade on a blockchain, you have a lot of freedom when it comes to what you can do with them including:
- Buy NFTs on a marketplace
- Sell NFTs on a marketplace
- Trade and/or gift NFTs with others
- Use NFTs in decentralized applications (dApps) such as in games
- Showcase your public NFT inventory, for example in a dApp or on social media
- Build and curate collections
How do I get NFTs?
- One of the reasons that NFTs on the WAX Blockchain are so popular is because unlike other blockchains, it’s so easy to acquire them. Simply create a WAX Cloud Wallet (WCW) account using just a username and password or even your social media account like Twitter, facebook, or Reddit. In just two clicks, you can start buying, selling, and trading WAX NFTs.
Once you have a WCW, you can acquire NFTs in a few different ways (depending on the NFT) such as:
- Acquiring NFTs from playing a game or interacting with a dApp
- Purchasing NFTs on a marketplace
- Have an NFT traded to you by someone else
How do I buy NFTs on WAX?
In the case of NFTs that trade on the WAX Blockchain, you can purchase them on a number of NFT marketplaces, listed below (these are often referred to as “secondary marketplaces” because they are sold on these marketplaces after originating elsewhere — think of Amazon as a primary marketplace and eBay as a secondary marketplace).
To purchase WAX NFTs on these secondary marketplaces, you need WAX Tokens which you can purchase on the websites listed here. You’ll send the WAX to your WCW name, which ends in “.wam”
Log in with your WAX Cloud Wallet, select the NFT you wish to purchase, and complete the sale as instructed by the marketplace.
Secondary Marketplaces on WAX:
Primary Marketplaces on WAX:
WAX also launches sales in conjunction with partners which can be purchased with either WAX Tokens or a credit card (depending on the partner and the sale). In the past they have sold out in as quickly as nine minutes, so stay tuned to WAX’s social media channels for news about upcoming sales:
Where do I see my NFTs?
You can view your NFTs in your WCW or on a marketplace that transacts them. You can also view them on block explorers like wax.bloks.io
Why some Non-Fungible Tokens have value
As you may or may not have already seen, some NFT are highly valuable, with several NFT fetching upwards of $100,000 on the open market, including a Decentraland parcel that sold for $215,000 in November 2018 and a rare Cryptokitty is known as Dragon that sold for 600 ETH, at the time worth around $170,000.
Since NFT are unique and can vary in their rarity, desirability, and utility, a market has developed around highly sought-after NFT, which sees collectors and traders buy and sell NFT, with their value being set by speculation, supply and demand, and other factors. Like many collectibles, NFT are worth as much as somebody is willing to pay for it—which can be a considerable sum.
Receiving, Storing, and Sending Non-Fongible Tokens
As we previously touched on, NFT are stored in compatible digital asset wallets. For Ethereum NFT, MyEtherWallet is one of the most popular choices, since it can be used to easily manage any Ethereum-based NFT, and can also be used to access NFT stored on Ledger hardware wallets.
Just like standard ether (ETH) and ERC20 tokens, NFT can be transferred from one address to another. But it’s important to note that the transaction fee is always paid in ether since NFT tokens are usually indivisible by nature and cannot be used as gas.
MyEtherWallet has a complete guide on using NFT through its NFT manager.
How Non-Fungible Tokens are Being Used Today
The number of potential use cases for NFT continues to grow with time, and ever more innovative examples appear regularly. Nonetheless, there are a handful of particularly popular use cases, as highlighted below:
In-game assets: NFT can represent in-game items, such as weapons, powerups, vehicles, characters, and more. Using the item could burn (destroy) the NFT, or lock it up using a cool-down timer until it can be used again.
Trading cards/collectible: Right now, a large proportion of NFT represent crypto-collectibles such as Cryptokitties, Axis (Axie Infinity), Cryptopunks, and sports trading cards.
Land ownership: In Decentraland, NFT represent parcels of land in different districts of the virtual world of the game. LAND owners can build on and monetize their plot, such as by leasing it out to other players or using it for advertising.
Domain names: NFT are currently being used as blockchain domains—essentially tokens that represent ownership of a particular crypto domain, such as name.eth or token.crypto.
Works of art: NFT can represent individual works of art that have been tokenized and are now represented by a unique token. Ownership of the NFT equals ownership of the underlying work of art.
Like standard digital assets, NFT is also used as speculative investment instruments, which are traded on NFT marketplaces like OpenSea and The Sandbox—usually by experienced traders and investors.