Non-fungible tokens (NFTs) are changing virtually every part of society. They’re transforming everything from art to finance. In the last couple of years, NFTs are one of the most significant innovations in the arts, finance, tech, fashion, and sports. And since 2021, NFTs have been the source of hype and confusion.
The NFT space is still foreign territory for most people, and the biggest challenge for newbies is understanding the term and what NFT space is about. The complex nature of this space may discourage many from actively participating in it. But some are engaged with the space but aren’t quite sure how to devote their time to significantly contribute.
Here, we explain what NFTs are, how they work, and how you can participate in NFT space even if you don’t own any.
An NFT, or a non-fungible token, is a digital asset that represents real-life objects like art, in-game items, music, and videos. They are sold and bought online, often with cryptocurrency. Also, they are typically encoded with the same underlying software as most cryptocurrencies.
They’ve been around since 2014, but they’re gaining fame now since they’re becoming an increasingly popular way to sell and buy digital artwork. In 2021 alone, the market for NFTs was worth an astonishing $41 billion, approaching the total value of the entire global fine art market.
They have unique identifying codes and are typically one of a kind, or at least of a pretty limited run. That’s how they create digital scarcity. That stands in contrast to most digital creations, which are nearly always infinite in supply. The idea behind this is that reducing the supply could raise the asset’s value if it’s in demand.
However, in the early days, many NFTs have been digital creations that already exist in some form, like securitized versions of digital art that are already hovering around on Instagram or iconic videos from NBA games.
Famous digital artist Beeple crafted a composite of 5,000 daily drawings to create “EVERYDAYS: The First 5000 days”, one of the most famous NFTs of 2021, which sold for a groundbreaking $69.3 million. Now, anyone can see the individual images or the entire collage online for free. So, why are people spending millions on something they could easily download or screenshot?
The thing with NFTs is that they allow the buyer to own the original item. Moreover, it has built-in authentication, which acts as proof of ownership. And collectors value those digital rights almost as much as the item itself.
NFTs are also membership tokens, bridging the digital with reality with behind the scene offers like VIP experiences and events and meet and greets exclusive to the NFT owners. They are more than just lines of code – they are vehicles for transforming the web.
They are the foundation of web 3.0 and the next iteration of the digital age offering information and value through digital assets. And this is happening through blockchain technology and decentralization, two components that have been missing in web 2.0.
NFTs exist on a blockchain. A blockchain is a distributed public digital ledger that documents transactions. NFTs are typically held on the Ethereum blockchain. But some other blockchains support them too. An NFT is minted from digital objects that illustrate both tangible and intangible items like:
Even a tweet can be NFT – Jack Dorsey sold his first tweet as an NFT for more than $2.9 million.
NFTs are like physical collector’s items, just digital. So, the buyer gets a digital file instead of an actual object. An NFT can have only one owner at a time, and their use of blockchain technology allows for verifying ownership and transferring tokens between owners. The creator can also store specific information in an NFT’s metadata. For instance, the artist can sign their art piece by adding their signature to the file.
NFTs offer artists and content creators a unique opportunity to monetize their products. For instance, artists don’t have to rely on auction houses or galleries to sell their artwork as they can sell it directly to the customer as an NFT. That allows them to keep more of the gains.
Artists can also program in royalties to receive a percentage of sales whenever their artwork sells to a new owner. And this is a valuable feature because artists typically don’t receive future profits after their art is first sold.
However, there are ways other than art to make money with NFTs. For example, Charmin and Taco Bell auctioned off themed NFTs to raise funds for charity, and Nyan Cat, a 2011-era GIF cat, sold for almost $600,000. NBA Top Shot yielded more than $500 million in sales, and a single LeBron James highlight NFT generated more than $200,000. Even some celebrities are releasing unique artwork, memories, and moments as securitized NFTs.
Many newcomers think participating in the NFT space means minting every hyped project. But the truth is you don’t have to mint a single NFT to be a part of the NFT world. Buying NFTs is definitely a way to participate, but not the only one.
You can engage in the community, network, make friends, and learn about NFTs every day. It’s vital to interact, find your niche, and share it.
Even though you may be unsure about how you can participate in the space and add your value, there are many ways you can engage. Below, we outline 9 ways to actively involve yourself in the NFT space.
Proof of Attendance Protocols, or POAPs, are free NFTs that reward you for participating in events. They can be tracked and stored in a digital collection, just like paid NFTs. And they are excellent first stepping stones into the NFT space.
Make sure to check out different cryptocurrencies, as Ethereum isn’t the only crypto you can use to buy NFTs. Both Solana and Tezos are emerging marketplaces with lower entry points.
Find the influential names and interact with them. Discover how they participate in the NFT space and who they are interested in. Ask questions, share your views and ideas, and get to know the community.
Join as many Twitter spaces as possible and interact even when stepping out of your comfort zone.
Supporting others is key to participating in any community, including NFT. Liking, commenting, and retweeting are the first steps toward creating a meaningful relationship.
Adding a background to your profile and putting yourself out there will help better connect yourself with the NFT community. Share your journey, experiences, passion, and interest.
Join Discords and engage with the communities there. The NFT future is built on interactions and friendships. So, be friendly – say hello, ask how everyone is, and you’ll become an active community member.
There are numerous NFT and web 3.0 sources of information. So make sure to read articles that discuss the NFT world and learn something new every day.
Enjoy being a part of the NFT space and the community that is developing the next iteration of the internet with web 3.0. The NFT world is full of creatives, strategic minds, and developers, all in one place. So, all there’s left to do, once you’re a part of the community, is to enjoy it!
NFTs and web 3.0 are the future, and it’s great that you want to participate in it. If you can’t or don’t want to buy any, you can still be a part of the NFT community and support this world.
By following our advice, you’ll be more involved in the NFT space than before. So, make sure you connect, create, share, learn, and support. And maybe most importantly, enjoy being a part of this evolving community!
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