You've probably already heard about it, it's been trending for months in the crypto-currency ecosystem but also outside. Celebrities, artists and even sports leagues have created them. But what is an NFT in concrete terms? Where to buy them and especially what is their purpose? Don't panic, we'll explain everything in this NFT guide!
What is a NFT?
Let's start by defining what an NFT is. The acronym NFT stands for "non fungible token". We don't use the word "fungible" every day, so we thought it was important to clarify the term.
It refers to a good or asset that can be exchanged for a good or asset of the same value. For example, a bank bill is fungible because it can be exchanged for another bill of equal value. In contrast, a non-fungible asset cannot be exchanged for something of equal value, which is the case with an NFT.
NFTs have been in circulation since 2014, but it's only in the last few months that their price and value have literally exploded.
Keep in mind that they are not crypto-currencies but unique digital assets whose transactions are done in crypto-currency and most often with the Ethereum crypto-currency for great transaction speed.
Currently they are mainly popular for digital art but they can take other forms.
The different purposes
The first question you may ask yourself is what is an NFT used for? And what are the different possible uses?
As explained above, an NFT is unique and can only have one owner, i.e. when you buy an NFT, you buy exclusive ownership of it. However, this does not mean that you have exclusive rights because it can be seen by anyone.
The advantage of NFTs is that they allow you to authenticate your creation on the internet. Currently, this technology is used to sell certified creations and to create a digital art market.
It is the latter and the multi-million dollar sales that have created speculation and a lot of noise. Thanks to this volatility, many artists or traders were able to make profits.
But the NFTs are not only a digital art market. NFTs have no limits and any digital asset can become an NFT. Here is a non-exhaustive list of the different types of NFTs:
- works of art
- tweets
- GIFs
- songs
- items in video games
- patents
- domain names
- photos or videos
Useful NFTs with the example of Ternoa and Sorare
The use of NFTs is not limited to the digital art market and to speculative use since they can also be useful. Ternoa and Sorare are two French companies that offer utilitarian NFTs.
Specialized in data transmission, Ternoa decided to use NFTs as time capsules. So, instead of having a speculative asset, the company allows its customers to store all kinds of data in a time capsule. This is a concrete use of NFTs and the blockchain
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New French startup, Sorare has democratized the use of NFTs and digital currency. Indeed, the French platform proposes to acquire NFTs with the effigy of a soccer player. So far, nothing revolutionary since it is a unique and non-fungible digital asset: the definition of an NFT.
However, the interest is to be able to play with these NFTs in the form of Panini cards. Moreover, they can increase in value depending on the actual performance of the players.
With this system, Sorare has succeeded in bringing reality and NFTs together. They are no longer just speculative digital assets but cards that allow you to play and even earn money with the play-to-earn system.
Where and how to buy them?
With the explosion of the phenomenon, many sites have developed and each one offers more or less the same services with variations, here is a non-exhaustive list.
OpenSea is surely the biggest NFT marketplace in terms of trading volume with a record of 3.4 billion dollars of transactions in August 2021. Easy to use, you'll find a lot of NFT at all prices.
Rarible is also an NFT marketplace, it is the challenger of OpenSea. On Rarible, it is possible to create your own NFTs without needing coding skills. The platform also has its own token for network governance: the RARI.
There are of course many other platforms to buy NFTs such as Mintable, SuperRare which is more for artists or Veve which offers beautiful collections of NFTs in partnership with world famous franchises.
Recently, crypto-currency exchange platforms like Binance, FTX, Crypto.com or Coinbase have been developing their NFT marketplace. Coinbase has generated a huge buzz for the launch of its NFT marketplace, registering more than a million registrations in the first 24 hours.
To buy NFTs, you just need to connect your wallet to the platform you want to buy from. We have made a short tutorial to help you create a MetaMask wallet, click here to view it.
