Introduction
NFT's are still fairly new to the world, but their popularity has skyrocketed ever since their initial release. Companies like OpenSea, FTX and others all provide means of purchasing and selling NFT's. Collecting NFT's is a fun and enjoyable hobby. Here are some ideas of where to start a collection as well as goes over the various options and types of NFT's that exist, so you have some basic knowledge under your belt before you drop actual money on your collection.
The Basics of NFT's
NFT's are a type of digital collectible. They can be traded, bought and sold on the aforementioned marketplaces, or in many cases, exchanged directly with another person.
There are a few basic types of NFT's which we will go over now. The first is the standard NFT which has no rarity; they are considered non-fungible because they are not identical to one another. For example, each item in this list is considered a standard NFT:
A game character skin
A weapon skin in Counter-Strike
A unique in-game item in a game like CS:GO or League of Legends
A unique tradeable card in Magic the Gathering (MTG)
An individual card in a physical MTG set, like a foil copy of Lord of the Pit or one of the five dual lands. This is considered rare because there are only so many copies from a specific set. If you have one, it is valuable because there are fewer around than other cards. This is what gives physical MTG cards their value, and this same concept applies to digital NFT's as well. The majority of NFT's are standard non-fungible tokens but there are many that carry rarity as well. Some examples include CryptoKitties and Decentraland's LAND deeds.
Another type of a token that is exchanged via a Blockchain is the fungible token which has no rarity; they are identical to one another and considered fungible because they can be interchanged without any issues. For example, these tokens would be considered fungible: A token which represents gold pieces in World of Warcraft A token which represents BTC on OpenSea A token which represents ETH on OpenSea A token which represents Ether on OpenSea A token that can be used to buy items from an online shop An ERC721 with no rarity metadata attached to it An ERC721 with no metadata at all.
NFT Metadata
NFT "metadata" is the data that is stored on a NFT to make it unique. Metadata can be anything from the name of a token, to an image or description of it, to what game it is used in, and more. It could also be used to track ownership or who has the token at any given time.
NFTs are created by smart contracts, which means that all transactions are immutable and cannot be tampered with by anyone once they have been deployed to the blockchain. The smart contract will store all information about tokens/items such as their name, image, description, etc. This data cannot be changed once it has been set in stone by the creator of the smart contract.
NFTs allow for developers to create more immersive and engaging gaming experiences than ever before because they are built upon a foundation that allows for true ownership of digital assets. In addition, NFTs can also be used in conjunction with other technologies such as artificial intelligence and virtual reality because these technologies can utilize these items as representations of real-world objects without having to worry about them being stolen or hacked like traditional online accounts would be if they were not secured using blockchain technology.
The ERC721 standard was created when CryptoKitties exploded in popularity; this standard allows for developers to create their own non-fungible tokens on top of Ethereum's blockchain in order for them to create their own non-fungible tokens on top of Ethereum's blockchain so they can create their own collectible tokens.
Non-fungible tokens are used in many different ways, but they all share the same basic principle of being unique and non-interchangeable. NFT's are being used to solve the problem of digital identity management. For example, non-fungible tokens can be used for individuals to prove that they are the rightful owners of their digital assets such as social media accounts and online bank accounts. This can be done by using an identity protocol that links a public key to a specific non-fungible token on the blockchain. If someone attempts to take over or compromise a user’s account, they will not be able to access or use their non-fungible token, which allows users to quickly determine if their account has been compromised.
How do I Get Started With Non-Fungible Tokens?
The first thing you need to do is create an account on OpenSea.io and if you don’t have one already, create a wallet to store your NFT's. You can use MetaMask as your wallet or you can use the Ledger hardware wallet which is the safest option. Once you have done this, head over to the marketplace and navigate to the "Buy" tab. There are two ways that you can buy NFT's: On OpenSea or on IDEX. If you choose to purchase them on OpenSea, then it will be necessary for you to deposit ETH into your account before purchasing as this is how payments are processed on the platform.
However, if you choose IDEX then it will not be necessary for you to deposit ETH as IDEX accepts only crypto such as WETH (wrapped Ether) and DAI (stable token). If using the Ledger hardware wallet with MetaMask, then it will be necessary for you to set up a contract address in MetaMask so that it knows where your funds are being sent when purchasing an NFT from OpenSea's marketplace. Please refer back to Step 3 of How To Buy & Sell Digital Assets With MetaMask if you need more information about how this is done.
How Much Are Non-Fungible Tokens Worth?
The price of each NFT varies depending on what it represents and what its purpose is within a game or platform. The most expensive NFT to date was purchased for literally Millions of dollars.
Here is an example of a very popular and expensive NFT series:
Bored Ape Yacht Club
https://opensea.io/assets/0xbc4ca0eda7647a8ab7c2061c2e118a18a936f13d/1159
Other well known NFT collections are still popular, but not as expensive. Such as:
SatoshiQuest Cards
https://opensea.io/collection/satoshiquest-v2
Where to look for cheap NFTs
OpenSea Marketplace is a marketplace for NFTs. Dapper Labs currently has 2 games that are using NFTs to issue 100% of the game assets: CryptoKitties and KittieRaider. CryptoKitties is still very popular, but not as expensive as it used to be due to many of the “rare” cats already having been snatched up. When you first start playing, the best advice that can be given is to purchase one or two of the cheapest cats in order to start accumulating resources and breeding your way up to more popular cats (and one day, your own version of CENSORED). The other game by Dapper Labs is KittieRaider.
KittieRaider was released along with a new event within the CryptoKitties Universe called The KittyVerse. This event allows new players to easily learn about both KittieRaider and the world of CryptoKitties without the need for prior knowledge or experience in either game. So try this out if you have never played before. Let us know what you think.
Cosmos is an additional NFT platform that did its ICO in April 2019. Compared to CryptoKitties, the creators of Cosmos chose to issue 100% of the tokens on the main Ethereum chain with a specific purpose: allowing 3rd party developers (and eventually users) to create and distribute their own dApps on the platform.
If you’re interested in more details about NFTs or would like to learn about our work with Dapper Labs, please sign up for our newsletter, coming soon!
Have you ever used Non-Fungible Tokens? What did you use them for? Let us know in the comments below!
Disclaimer
This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency.