Unlocking the Benefits of NFTs: A Practical Guide

Written by Daisie Team

Published on 10 July 2023 7 min read

Diving into the digital universe, one term that has been making waves recently is NFTs. This acronym stands for non-fungible tokens and they're transforming the way we view and interact with digital assets. The benefits of NFTs are numerous and significant, paving the way for exciting possibilities in the digital world. In this practical guide, we'll unlock the benefits of NFTs and provide you with a roadmap to navigate this new frontier.

Introduction to NFTs

Non-Fungible Tokens, or NFTs, are unique digital assets that are revolutionizing the way we think about ownership and value in the online space. Before we delve into the benefits of NFTs, let's first understand what they are, why they matter, and their role in the digital world.

What are NFTs?

An NFT is a kind of digital asset that represents real-world objects like art, music, in-game items, and videos. They are bought and sold online, often with cryptocurrency, and they are encoded with the same underlying software as many cryptos.

A unique property of NFTs is their ability to be distinguished from each other. This means that each NFT has a specific value and cannot be directly replaced by another.
One of the significant benefits of NFTs is that they contain distinguishing information recorded in their smart contracts, making it easy to verify their authenticity and ownership.

Importance of NFTs

NFTs are more than just digital collectibles; they represent a wide range of tangible and intangible items, from digital sneakers to virtual real estate in the metaverse. Here's why they're important:

NFTs create digital scarcity with a verified proof of ownership that can't be replicated, making them valuable in the digital economy.
They allow content creators and artists to monetize their work in ways previously only available to a select few, showcasing the financial benefits of NFTs.

NFTs in the Digital World

NFTs have a wide range of applications in the digital world. They're not limited to the art industry; NFTs are now being used in domains like real estate, gaming, and intellectual property.

For instance, in the gaming world, these digital assets allow players to truly own in-game items and even earn a living from their virtual properties.
Another illustration of the benefits of NFTs in the digital world is in the music industry, where artists can sell their music as NFTs, allowing them to profit directly from their work.

By understanding what NFTs are, their importance, and their role in the digital world, you're already on your way to unlocking the benefits of NFTs. Let's continue our journey by exploring how to get started with NFTs.

Getting Started with NFTs

Now that you have a basic understanding of NFTs and their potential benefits, you might be wondering how to get involved. The process of acquiring, managing, and trading NFTs is similar to dealing with cryptocurrencies. Let's break it down:

Selecting the Right Platform

There are numerous platforms where you can buy and sell NFTs, but not all are created equal. The choice will largely depend on your needs and the kind of NFTs you're interested in.

Consider platforms like OpenSea, Rarible, and NBA Top Shot. These platforms offer a wide variety of NFTs, from digital art to virtual sports collectibles.
Review the fees: Most platforms charge a fee when you buy or sell an NFT. Make sure you understand these costs before making a transaction.
Look at the community: An active and engaged community can be a strong indicator of a platform's health and longevity.

Buying Your First NFT

Once you've chosen a platform, the next step is to buy your first NFT. This process varies slightly from platform to platform, but the general steps are:

Create an account on the platform.
Buy some cryptocurrency: Most NFTs are purchased with Ethereum (ETH) but some platforms accept other types of digital currency as well.
Browse the marketplace for an NFT you like.
Buy the NFT: This process is similar to any online purchase. However, instead of getting a physical product or a downloadable file, you're buying a token that proves your ownership of a digital asset.

Managing Your NFT

Just like any other asset, managing your NFT properly is essential. Here are some tips:

Store your NFTs in a digital wallet. Some popular options are MetaMask and Trust Wallet. These wallets allow you to interact with the decentralized web, including NFT marketplaces.
Keep track of your NFTs' value. The value of NFTs can fluctuate over time, similar to cryptocurrencies and other assets. Regularly checking the value of your NFTs can help you make informed decisions about buying or selling.

Now that you know how to get started with NFTs, let's discuss how you can create your own NFTs, a process known as 'minting'.

How to Mint NFTs

Creating your own NFTs, or "minting", can be a rewarding experience. It allows you to put your digital creations on the blockchain and potentially reap the benefits of NFTs. Whether you're a digital artist or simply a lover of unique collectibles, here's how you can get started:

Selecting What to Mint

The first step in minting an NFT is deciding what digital asset you want to turn into a token. Remember, an NFT can represent any form of digital content. A few examples could be:

Digital art: This is the most common type of NFT. Artists have minted everything from simple pixel art to intricate 3D renderings.
Music and videos: Musicians and filmmakers are also exploring the benefits of NFTs by creating unique, tokenized pieces of content.
Virtual real estate: Platforms like Decentraland allow users to buy, sell, and trade tokenized real estate in a virtual world.

Minting Process

Once you've decided what you want to mint, the next step is to actually create the NFT. Here's a general overview of the process:

Upload your digital content to an NFT marketplace. This content will be linked to the NFT and can't be altered once the token has been created.
Fill out the necessary information about your NFT. This usually includes a name, description, and any other relevant details.
Pay the minting fee. Minting an NFT typically requires a small amount of cryptocurrency to process the transaction on the blockchain.
Confirm the creation of your NFT. Once your token has been minted, it will be listed on the marketplace and anyone will be able to buy it.

NFT Minting Costs

Minting NFTs isn't free. The costs can vary depending on a number of factors:

Gas fees: These are transaction costs on the Ethereum network. They fluctuate based on network congestion and can sometimes be quite high.
Marketplace fees: Some platforms charge a fee to mint an NFT. Always check the fee structure of the platform you're using.

Minting your own NFTs can be a fun and exciting way to explore the benefits of NFTs. But what if you want to sell your NFTs? Let's dive into that next.

Selling NFTs

Once you've minted your NFT, it's time to put it out there for the world to see—and hopefully buy! Selling an NFT is a process that requires some thought and strategy. Let's walk through the key steps:

Setting the Price

Deciding how much to charge for your NFT can be tricky. Here are some points to consider:

Research similar NFTs: Look at how much similar NFTs are selling for on the same platform. This can give you a ballpark figure.
Consider your reputation: If you're already a well-known digital artist, musician, or content creator, you may be able to charge a premium for your NFTs.
Think about the rarity: One of the benefits of NFTs is their uniqueness. If your NFT is one-of-a-kind, it could command a higher price.

Finding Buyers

Once you've set a price, it's time to find someone who's willing to pay it. Here are some ways to attract potential buyers:

Promote your NFT on social media: Platforms like Instagram, Twitter, and Facebook can be great places to showcase your NFT and attract potential buyers.
Join online communities: There are many online forums and communities dedicated to NFTs. These can be great places to find interested buyers.
Use auction formats: Some NFT platforms allow you to list your NFTs for auction. This can help generate interest and potentially lead to a higher selling price.

Safe Transactions

When it comes to selling your NFT, safety should be a priority. Here are some tips to ensure a secure transaction:

Use a reputable platform: Stick to well-known NFT marketplaces that have security measures in place.
Verify the buyer: Before finalizing the sale, check the buyer's history and reputation on the platform.
Understand the transaction process: Make sure you're familiar with how transactions work on the platform you're using. If something seems off, it's better to be safe than sorry.

Selling NFTs can be a profitable venture if done right. Now that you know how to mint and sell NFTs, let's explore what the future might hold for these unique digital assets.

Future of NFTs

Having navigated the exciting waters of NFT creation and sales, let's now turn our gaze to the horizon. Where are NFTs headed? What does the future hold for these unique digital assets? Let's explore.

NFTs and Blockchain

Blockchain technology plays a vital role in the world of NFTs. Here are some ways this relationship might evolve in the future:

Greater adoption: As more people understand and trust blockchain technology, we could see an increase in the creation and trading of NFTs.
Improved security: Blockchain technology is already secure, but new advancements could make it even safer to create and trade NFTs.
More efficient transactions: Future advancements in blockchain technology could make NFT transactions faster and cheaper.

NFTs in Virtual Reality

The realm of virtual reality (VR) is another exciting frontier for NFTs. Here are some potential developments:

Virtual property: You could own unique pieces of virtual land as NFTs, adding a new dimension to the concept of property ownership.
VR collectibles: Just as you can collect NFTs in the real world, you might be able to collect and show off NFTs in your virtual reality space.
VR art galleries: Artists could display their NFT artwork in virtual galleries, offering a unique, immersive experience.

NFTs as Digital Assets

As the digital world continues to expand, so too will the role of NFTs. Here are some potential trends:

Digital inheritance: In the future, you might be able to pass down your NFTs as part of your digital legacy.
New forms of NFTs: We could see the creation of new types of NFTs, such as digital identities or credentials.
Integration with other technologies: NFTs could be integrated with other technologies like AI or IoT, opening up new possibilities.

While we can't predict the future with certainty, one thing is clear: NFTs have a promising role to play. As digital assets with unique benefits, NFTs are poised to change the landscape of digital ownership and creativity.

If you're excited about unlocking the potential of NFTs in your creative journey, don't miss the workshop 'Sell Your Creations As NFTs' by Tom Glendinning. This workshop will provide you with practical steps and insights on how to effectively turn your creations into NFTs and tap into the emerging digital art market.