7 Things You Should Know About NFTs
NFTs are tokenized collectibles valued for their uniqueness and rarity, popular on Binance Smart Chain (BSC) and Ethereum. The value of NFTs is based on their authenticity and scarcity, so it may be helpful to take a closer look at the token in a blockchain explorer.
NFTs have more use cases than just crypto art, and BSC now has an innovative ecosystem of non-fungible tokens. Due to the recent popularity of NFTs in the news and huge selling prices, it’s easy to see similarities to the ICO craze of 2017. But the two are, in fact, very different things.
To understand more, we cover the basics of NFTs based on common misconceptions and frequently asked questions.
- What is an NFT?
- What can I do with an NFT? Are they tradeable?
- How is the rarity and value of an NFT determined?
- Where can I find NFT?
- What are the main NFT projects on Binance Smart Chain?
- Are NFTs the new ICO?
- How is the authenticity of an NFT verified?
Also Read – What Are NFTs and How Can Buy Them in India?
When it comes to non-fungible tokens (NFTs), art and collectibles are never far behind. These unique tokens are making waves with huge sales from graphic designers and visual artists. Artist Beeple is one of the most popular examples. His NFT called “Everydays-The First 5000 Days” was auctioned for approximately $ 69 million.
NFTs are very popular, but the subject goes far beyond the headlines. Understanding and exploring the world of NFTs is the next step to take if you want to dig a little deeper. There are many places to find them, use cases to look at, and even misconceptions to clear up.
What is an NFT?
An NFT is a cryptoasset that represents something unique and collectible using blockchain technology. The NFT could be in demand because it has been created by a famous artist or composed by a world-class musician. The token could also be useful in a game or wanting to complete a collection.
You may have already heard of NBA Top Shot, a digital collectible basketball card game. The cards work the same as physical business cards, but their authenticity is guaranteed through blockchain technology. Some cards are rarer than others and each has a different value.
Simply put, a non-fungible token cannot be forged or copied. If we look at the definition of fungibility, we can learn a little more about what makes an NFT special:
Fungibility is the ability of an asset to be interchangeable with assets of the same type.
One bitcoin is the same and can be exchanged for another bitcoin. A # 1/99 Keldon Johnson Holo Icon Top Shot card, on the other hand, is not interchangeable as there is only one.
What can I do with an NFT? Are they tradeable?
NFTs come in all shapes, sizes, and even use cases. Purely collectible digital art NFTs are quite limited in what you can do with them. You can exchange them, of course, but the NFT of a photo is not much different from a normal print in terms of utility.
Still, some NFTs have real uses in games, like the famous CryptoKitties on the Ethereum blockchain. In this case, a collectible cat can breed to pass on its traits to new cats.
NFTs are also commonly used by financial platforms. There is a massive market for PancakeSwap NFTs that are artistic and convertible into cryptocurrencies. This unique combination means that people can speculate on the future price of the collectible amount.
All of these NFTs have in common the ability to exchange them for different digital assets. This means that you can buy or sell NFT using ETH, BNB, or other cryptocurrencies. Still, each piece of NFT is unique (that is, they are not interchangeable).
How is the rarity and value of an NFT determined?
Determining how much an NFT is worth depends on what it represents. When it comes to crypto art, it is quite similar to any other type of art. We need to think about who created it, the artistic value of the piece, and the demand it might have from other collectors.
If an NFT is part of a limited run or series, specific numbers are often more valuable than others. We usually see the number 1 as desirable and other numbers that people find collectibles like the number 13 or the number 7. The value and rarity depend on a combination of factors, such as those mentioned above. You can see from these NFT Top Shots how your ranking affects the price.
For game-based NFTs, there may be financial benefits from specific NFT items or creatures. If they provide you with an additional $ 100 in wagering rewards, then it will be worth at least $ 100 regardless of its artistic value.
PancakeSwap’s NFTs are slightly different. Some of its tokens can be converted into CAKE, the platform’s cryptocurrency. So if, for example, your stuffed rabbit can give you 10 CAKES and the CAKE price is $ 20 (USD) per token, then your NFT is worth at least $ 200.
Where can I find NFT?
If you want to explore the NFTs on offer, there are a few different places to start looking. NFT markets have a variety of non-fungible tokens for sale, from both famous artists and hobbyists. There are many options to choose from, but some of the most important are OpenSea for NFTs based on Ethereum and Treasureland or BakerySwap for Binance Smart Chain.
The number of markets continues to grow and some are more specialized than others. If you are interested in buying something from a famous artist, be sure to check and see how genuine the market is. You can also find NFT playing blockchain games or participating in decentralized finance (DeFi) projects.
What are the main NFT projects on Binance Smart Chain?
Binance Smart Chain benefits from a healthy NFT community on blockchain, and it’s not all art and markets either. There are NFT games and even collectibles with financial or betting benefits.
As mentioned above, BakerySwap and Treasureland are two of the largest NFT exchanges. BakerySwap also allows you to create NFTs quickly and for a reasonable price. When it comes to the art and creative side of NFTs, these are great places to start.
There are also blockchain games like Battle Pets and the DeFi protocols that experiment with NFT in more financial ways. PancakeSwap is ranked number one in NFT traded in Treasureland, making it a massive project for NFT use.
Are NFTs the new ICO?
In short, no. While there are some slight similarities in the money NFTs raise and their recent hype and popularity, that’s it. An initial coin offering (ICO) is a method used for project fundraising by selling project tokens. It became popular around 2017 and became famous for the number of scams and failed projects that were involved.
It is easy to see why some people may get the idea that NFTs are similar to ICOs. Recently, these digital collectibles have sold for millions of dollars. They are also all over the news and seen as an opportunity to earn some “easy money” with crypto. These two points are where the similarities between the two end. Still, it’s critical that you do your own research before risking your funds because not all projects are legitimate.
How is the authenticity of an NFT verified?
Proving that your NFT is legitimate can be a bit tricky, depending on what you are looking for. People are certainly uploading other artists’ work and pretending to be themselves. In this case, you should contact the artist to confirm that they are selling NFT of their work.
The creator of an NFT should provide you with some kind of identifier for you to check. Most of the work will involve looking at your NFT in a blockchain scanner like BscScan. When it comes to blockchain, we take a “don’t trust, verify” approach.
Helpful information could include the date of minting and the address of the wallet the NFT minted. You can also use the transaction history ID to see if your NFT matches. This method is better than just checking the image or file associated with your collection. If we look at the recent sale of digital artist Beeple, Christie’s has provided the token id, token contract, and wallet address for validation.
Sometimes there is a URL to the file or an IPFS link to verify its underlying content. However, someone else can use both when creating a fake token. In most cases, it’s best to check with the creator first.
When it comes to NFT, new use cases and developments are constantly emerging. It’s easy to forget that technology is as recent as 2017 and still in its infancy. Before you start investing money in these tokens, make sure you understand precisely what you are getting into and how to use them. It’s easy to think of NFTs as art, but there is a world of projects that use them in different ways.
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