The world of NFTs explained: what is it, how to create them, buy them and make money

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The digital world is evolving so rapidly that it’s often impossible to follow the latest news and discover them at the right time. Being present just before something “explodes” economically, gaining a value that most of the world had not imagined until that moment, is the dream of every modern investor. It would mean having been able to buy Bitcoins before their value skyrocketed, or Apple shares before the iPhone started talking, or territories of the virtual world Earth2 before the most coveted locations were sold. Identifying the next investment reality ready to explode is the goal of every ambitious investor.

For some time now, the new horizon of digital investments has been NFTs. Let’s try to provide here a brief guide on what they are, how they can represent an investment opportunity and how some people have managed to get rich through them.

What are NFTs: meaning and characteristics

NFT stands for Non-Fungible Token. It is a way to indicate any digital work, created on the web and existing in a single original copy. It can be anything: an image, a music track, a photograph, a domain, a service or product within the expanding metaverse. The thing that matters is that it is a unique object: this is what can make it precious and coveted by those who want to buy it.

The big difference between an NFT and any object on the web is the certainty that the NFT exists in a single original copy and cannot be reproduced. Let’s see how this happens.

The uniqueness / originality of an NFT

How do you ensure that any “thing” created on the web is original and unique? For this to happen, and for that thing to actually be an NFT, that object must have a unique digital signature. The token, in fact. The technology behind NFTs ensures that every time an NFT is created, it is associated with a unique token. In practice, this token is a sequence of characters associated with a blockchain, but for those who want to manage an NFT it is not necessary to be a blockchain expert and understand how the uniqueness of the token is guaranteed. Suffice it to say that every time an NFT is created, the technology that creates it generates a unique identification code in order to ensure that that object, and only that one, is the NFT in question. That object cannot be reproduced, because whoever does it will have a different token, and the blockchain will always be able to guarantee which is the original token for that NFT.

In simpler words: whatever is created on the web as an NFT, it becomes the only and original version of that thing. And if that product becomes coveted and more people want to buy it, everyone will be interested in having the original version.

How is an NFT created?

There are specific platforms where you can create and trade NFTs. There are several, based on when they were born and what they specialize in. In recent times, one of the most popular platforms for its simplicity is OpenSea and it represents a quick and easy way to enter the world of NFTs.

To enter OpenSea it is necessary to connect a wallet, in the Ethereum cryptocurrency. because the purchases and transactions made by OpenSea take place in that way. In simple terms, it is about having an Ethereum account from which you can make purchases or receive money from sales. If you do not have an existing Ethereum wallet, you can create one in a few steps directly when you create your account on OpenSea, for example using the suggested Metamask plugin, which allows you to easily purchase Ethereum by credit card. Once the Metamask wallet has been created and connected to OpenSea, the user has an official profile capable of creating or purchasing NFTs.

How much are NFTs worth?

As with everything, the market decides the value of any one-of-a-kind object. And it is no coincidence that many of NFT’s sales follow the concept of auction more or less like those of works of art. This means that if you are a “complete stranger” and create something of your own, it will be difficult to make your works become objects of great value. Difficult but not impossible, as some NFT creators have shown in recent years: one of the first successful companies in the NFT field was Crypto Kitties, a portal that creates images of cute kittens in digital format. In their peak period (end of 2017) the trading of Crypto Kitties had managed to congest the Ethereum market, and the total value of the Crypto Kitties trading transactions from the beginning exceeds 40 million dollars. It is simply something that the market has found attractive and has become of value just because many people want it, therefore one crypto kitten can be worth even more than 100 thousand dollars, simply because there is someone willing to pay that amount for have an original copy (an NFT).

If you’re already a recognized artist, you obviously already have someone willing to have an original copy of something you created. As did Particle, the NFT platform created by the famous art auction house Sotheby’s, which bought Banksy’s Love Is In The Air work and sold it in the form of 10,000 different NFT fragments. In this way, anyone who purchases one of those NFTs can claim to have an original and unique fragment of a Banksy work in the NFT market. This can be done right now on Particle’s official website, by connecting your Metamask wallet. The starting price for a fragment of Banksy’s work is $1,500, but it is not hard to imagine how the value can go up once all the fragments have been sold.

Auralcrave also has its own collection of NFTs within OpenSea. You can find it here.

NFT: a promising investment?

How much will a given NFT be worth in X months or years? Impossible to say today. The philosophy of any investment is that those who invest believe that the value of what they have bought will rise over time, and it will be possible to resell it at a higher price in the future. If you are looking to enter the NFT market as an investor, therefore, you should bet on examples of NFTs that are increasing in popularity, because it is more likely that more people will want to buy them in the future and therefore their value will increase. If, on the other hand, you are aiming to create new NFTs, make sure that the market knows about them and wants to buy them, as you would with any product you create in the physical world. And who knows, in a few years you could become rich with NFTs too.