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Guide to Understanding NFT Art

Updated: May 20

Heard about NFT Art, but confused where to start ? Probably, the headlines saying artists making millions and billions by selling NFTs might have made you curious and you want to give it a shot too. Definitely, NFT Art is one of the craziest trends the art industry saw in recent times. As an artist, you can create amazing artworks that you would like to sell as NFT, but where to start remains a big question. So, here's simplifying the world of NFT Art.

What is NFT ?

NFT or NON-Fungible Token is data stored in a digital form that represents something specific. Therefore they are unique and cannot be replicated.

For a layman, Fungible or Fungibility may seem a complicated term. In simple words, fungibility stands for goods, objects or assets that can be exchanged for similar assets. Basically, both the exchanged assets have similar value.

If you and your friend both have ₹ 100 notes and you exchange them, the value will remain the same. Both notes will have a different serial number, but upon exchange, both of you will not have gained or lost anything.

But what if you and your friend have aeroplane tickets ? Can you exchange them and will they still be usable ? No, upon exchange the aeroplane tickets would lose all their value as they carry your personal information which is unique to you.

₹ 100 notes is a fungible asset and aeroplane tickets are examples of non-fungible assets.

In the cryptomarket; Bitcoin or Ethereum or any cryptocurrency is a fungible asset but NFT Artworks aren't.

Another interesting point to note here is that you can divide the ₹ 100 note or 1 Bitcoin in smaller denominations, but when in comes to NFT it is not divisible. You have to sell/buy it as a whole.

All of us have a unique Passport Number or unique address, similarly an artwork when minted as NFT has a unique digital address.

What can be an NFT ?

  • Art (Physical paintings and digital art)

  • GIFs

  • Videos and sports highlights

  • Collectibles

  • Virtual avatars and video game skins

  • Designer sneakers

  • Music,

  • Tweets, Etc

Twitter co-founder Jack Dorsey sold his first ever tweet as an NFT for more than $2.9 million. An NFT featuring the popular piece of internet history that is the Nyan Cat meme sold for 300 ETH, or about $590,000. Beeple, a crypto-artist sold an artpiece titled "Everydays : The First 5000 Days" for $69 million.

Where can NFTs be used ?

NFTs give artists an upper hand as they can directly sell it to customers without having to rely on galleries or agents or without having to bargain.

A remarkable feature of selling NFTs is that the artist can setup royalties, so that whenever the new owner decides to sell it again, the artist still gets a percentage of it. The royal system guarantees a percentage even after the NFT has been sold 10 or 15 times by every new owner.

After selling, the artists can trade or invest in cryptomarket, buy items that accept cryptocurrency as payment or simply convert it to their native currency and withdraw the money.

Where to buy/sell or trade NFTs ?

NFTs can be traded in NFT Marketplaces, it is very similar to an e-commerce platform in terms of its purpose. What Amazon or Flipkart is for regular goods, an NFT Marketplace is for NFTs.

But you cannot simply go to an NFT marketplace and start trading, you'll need a few things ready before you start selling NFT Art. Keep the following things ready -

  1. A crypto wallet - Just like you make payment through cards or UPI portals, a crypto wallet is also required to get payments for NFTs. WazirX, Coinbase, Binance, Kraken are examples of crypto wallets.

  2. An amount of coins in the wallet - Before you can sell or mint an NFT, you'll need a few coins. Remember, how we purchase coins in a mobile game ? Similarily through your crypto wallet you can purchase coins by adding your native currency (For Indians it is Rupee) or asking your friend to send you some cryptocoins.

  3. A user account - Lastly, you'll need to create an account on the marketplace where you wish to sell your NFT.

Some other advance things you should understand are the network you are trading on, compatibility of Blockchain Platform, for example the Ethereum Blockchain is compatible with Metamask Wallet, for the NFTs sold on the Solana platform, you will need to use a wallet service such as Sollet. Also, check for any kind of transaction fees is applicable to you. Most marketplaces apply a small fees called gas fees or a blockchain network fees.

Popular NFT Marketplaces

  1. OpenSea - This is one of the most established and universal NFT marketplaces. You can find NFTs representing ownership of a vast range of items that include artwork, sport-collectibles, virtual worlds, trading cards and even domain names.

  2. Rarible - This is an NFT marketplace owned by the community members holding RARI tokens. It puts an emphasis on art, but you can find a wide range of other NFT items here, too.

  3. Nifty Gateway - Nifty is one of the largest marketplaces for NFTs. Here the well-known crypto-artists have sold their NFTs including Beeple, Steve Aoki and deadmau5.

  4. WazirX NFT - This is the first Indian NFT marketplace and has gained popularity worldwide. This has made selling NFTs for Indian Artists a lot more easier.

How to sell NFT on WazirX ?

Step 1. Search WazirX NFT on Google and click on the official website URL.

Step 2. Go on the upload section of the website.

Step 3. Set up Metamask and connect with your account.

Step 4: Upload to convert your art into NFT. You will need Binance coin as a gas fee.

Step 5: Once payment made, upload and give details about the art such as title, description, price and royalty to the art.

Step 6. Then you can start minting your NFT

Step 7: WazirX will escrow your property as buyer protection.

Step 8: Your NFT is listed for sale.

Selling NFTs on other platforms is quite similar, but one needs to have a good understanding of compatible networks and fees applicable.

How to buy NFT on WazirX ?

Step 1. Search WazirX NFT on Google and click on the official website URL. Step 2. The home page of the website lists various NFTs to explore. Step 3. Click on the artwork you like. Step 4. There is an option to pay the price in the native coin of WazirX, WRX Step 5. Once clicked it will ask you to connect to an Ethereum based account MetaMask. Step 6. After that, fund the account and confirm your purchase. Step 7: Now, you finally own digital art.

Buying NFTs on other platforms is quite similar, but one needs to have a good understanding of compatible networks and fees applicable.

Pros and Cons of NFT

Pros -

  1. Value Growth - Because the NFTs provide a royalty system, it becomes an investment for both the buyer and seller.

  2. Data Record - An NFT can be duplicated or a fake NFT sold. the uniqueness shines.

  3. Latest Trend - There a huge excitement around NFTs inviting even the Gen Z to invest in it.

Cons -

  1. Experience - There’s a different attraction to seeing a one-of-a-kind rare painting with your own eyes that these tokens simply can’t provide.

  2. Uncertain Value - Though we hear news of NFTs sold for millions, not all NFTs get such huge price.

  3. Environmental Cost - Any record entered into the Ethereum blockchain be it minting cryptocurrency or NFTs takes a large volume of computing, which requires heavy use of energy. Annually, Ethereum is currently estimated to consume roughly 44.94 terawatt-hours of electrical energy, which is comparable to the yearly power consumption of countries like Qatar and Hungary.

Future of NFTs

The pandemic world saw huge financial instability but the trends in crypto markets have shown otherwise. Since early March 2020, NFT Art has created quite a buzz worldwide and why wouldn't ? Artists were paid millions for a digital token. Just like sale of Modern Art was appreciated and criticised some 25 - 50 years ago, NFT art has its share of supporters and critics.

There is seemingly a very small portion of the population that has currently entered the NFT world as it remains inaccessible to the technically less advanced strata. There are many conceptions, and this might add to the chaos but the future has always paved way for creativity.

The total market for NFTs crossed a whopping $100 million by the end of July 2020. Experts in the crypto industry even speculate that 40% of new crypto users will use NFTs as an entry point.

With the decentralized finance industry surpassing $4 billion in value, it is evident that the NFT space is set to grow exponentially in the days to come.

If you still have questions about selling your first NFT, feel free to book an art consultancy session with us and surge your way into the NFT market today.

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