Unlocking the Potential of NFTs for Digital Asset Ownership

Written by Daisie Team

Published on 10 July 2023 8 min read

Picture this: you're an artist who's just created a unique piece of digital art. You want to sell it, but you also want to ensure its uniqueness and authenticity are preserved. Enter the world of Non-Fungible Tokens (NFTs). This blog post will guide you through the maze of NFTs and the future of digital assets, helping you unlock their potential for digital asset ownership.

1. What are NFTs?

At the heart of the digital asset revolution, we find NFTs. But what exactly are they? Let's take a closer look.

Definition of NFTs

Non-fungible tokens, or NFTs, are unique digital assets stored on a blockchain—the same technology that powers cryptocurrencies like Bitcoin and Ethereum. Unlike cryptocurrencies, which are identical and interchangeable, NFTs are unique and can't be exchanged on a like-for-like basis. This uniqueness is what gives NFTs their value and appeal—you're not just buying a digital asset; you're buying a piece of originality.

How NFTs Work

NFTs work by using blockchain technology to record the ownership of a digital asset. When you buy an NFT, this transaction is recorded on the blockchain along with your ownership details. This ensures the authenticity and originality of your digital asset. Think of it as a digital certificate of authenticity. Plus, it's virtually tamper-proof—nobody can erase or alter this information once it's on the blockchain.

Importance of NFTs

Remember our artist from earlier? Well, NFTs are particularly important for creators like them. NFTs create a new way to monetize digital art, music, and other digital goods. Plus, they offer a level of control and ownership previously unheard of in the digital world. For the first time, artists can sell their work directly to consumers without the need for a middleman. And the impact of NFTs extends beyond the art world. They're shaping the future of digital assets, transforming how we buy, sell, and own digital goods.

2. Benefits of Digital Asset Ownership

As we venture further into the digital age, owning digital assets through NFTs is becoming increasingly beneficial. Let's explore why.

Ownership Rights

Firstly, let's talk about ownership rights. In the past, owning a digital asset was pretty much like catching smoke with your bare hands—fleeting and intangible. But with NFTs, you get verifiable ownership rights. What does that mean for you? Well, it means you have total control over your digital asset. You can keep it, sell it, or even rent it out. It's yours to do with as you please.

Monetization Potential

Secondly, NFTs unlock significant monetization potential. Remember our artist friend? By tokenizing their artwork as an NFT, they can sell it directly to a global audience. The buyer gets a unique piece of digital art, and the artist gets paid for their creative efforts. It's a win-win. Plus, NFTs often come with "smart contracts" that can pay the artist a royalty every time the NFT is sold to a new owner. This means artists can benefit from the increased value of their work over time.

In short, NFTs and the future of digital assets are not just changing how we own digital content—they're revolutionizing how we monetize it, too. So, are you ready to dive into the world of NFTs?

3. How to Buy NFTs

By now, you might be thinking, "This sounds great, but how do I actually buy an NFT?" Well, you're in luck—because that's exactly what we're going to talk about next.

NFT Marketplaces

You can buy NFTs on various online marketplaces. Some popular ones include OpenSea, Rarible, and NBA Top Shot. Each marketplace has its own unique focus. OpenSea and Rarible, for example, feature a wide range of digital assets, while NBA Top Shot specializes in NBA-related digital collectibles. The choice of marketplace depends on what kind of NFT you're interested in.

Steps to Buy NFTs

Now, let's break down the process of buying an NFT into simple steps:

Choose a marketplace: Based on the type of NFT you want, choose a marketplace that offers it.
Create an account: You'll need to create an account on the marketplace to buy NFTs.
Buy cryptocurrency: Most NFT transactions are done in Ethereum, so you'll need to buy some. You can use platforms like Coinbase or Binance for this.
Make a purchase: Search for the NFT you want to buy, and hit the 'buy' button. Follow the instructions to complete the purchase.

And there you have it—a step-by-step guide on how to buy NFTs. Remember, NFTs and the future of digital assets hold exciting possibilities, but it's also important to do your research and understand what you're buying. Now, let's move on to selling NFTs.

4. How to Sell NFTs

So, you've got your hands on a digital asset, and you're ready to dive into the world of selling NFTs. Let's demystify the process and guide you through it.

Preparing Your NFT for Sale

Before you can sell an NFT, you need to prepare it for sale. This usually involves:

Verifying your asset: Make sure your NFT is legitimate and yours to sell.
Choosing a marketplace: Different NFTs may sell better on different platforms. Choose a marketplace that caters to your type of NFT.
Listing the NFT: You'll need to list your NFT on your chosen marketplace, complete with a description, image, and any other required information.

Pricing Your NFT

How much should you sell your NFT for? That's the million-dollar—or maybe million-Ethereum—question. Pricing an NFT can be tricky, but here are a few things to consider:

Market trends: What are similar NFTs selling for? Keeping an eye on the market can help you set a reasonable price.
Uniqueness: What makes your NFT special? Unique features can boost an NFT's value.
Creator: Did a renowned artist or brand create the NFT? A well-known creator can increase an NFT's worth.

Finding Buyers for Your NFT

Once you've priced your NFT, the challenge is to find a buyer. You could wait for buyers to find your listing, or you could be proactive and promote your NFT. Social media platforms like Twitter or Reddit are popular places to showcase your NFT. Remember, NFTs and the future of digital assets are all about community, so don't shy away from joining and participating in relevant online communities.

There you have it: a simple guide to selling NFTs. Remember, while the world of NFTs is exciting, it's always smart to understand what you're getting into. Next, we'll talk about some strategies to make the most of your NFT journey.

5. NFT Strategies

Trading in NFTs isn't just about buying low and selling high. There are strategies to consider if you want to make the most out of your digital assets. Let's discuss some of them.

Building a Digital Asset Portfolio

Think of NFTs as an investment—similar to stocks or real estate. You wouldn't put all your savings into one company's stock, would you? Similarly, building a diverse NFT portfolio can help you weather market fluctuations and tap into various opportunities.

Consider these steps:

Spread your risk: Don't put all your eggs in one basket. Consider investing in NFTs from various artists, genres, or platforms.
Research: Stay informed about the NFT market. Know what's trending, what's not, and why.
Patience: Just like other investments, the value of NFTs can take time to appreciate. Don't rush to sell off your NFTs at the first sign of profit.

Staying Informed about the NFT Market

The world of NFTs moves at breakneck speed. One day, cat memes are the rage; the next day, it's digital land in a virtual world. To stay ahead, you need to keep a finger on the market pulse. But how? Here are some tips:

Follow industry news: Keep tabs on NFT news, from big sales to legal developments.
Join online communities: NFT enthusiasts often gather on platforms like Discord, Reddit, or Twitter. Join these communities to exchange ideas and get insider insights.
Understand the technology: Blockchain, smart contracts, Ethereum—understanding the tech behind NFTs can help you make informed decisions.

Knowledge is power, especially in the world of NFTs and the future of digital assets. Up next, we'll discuss some common pitfalls to avoid in your NFT journey.

6. NFT Pitfalls to Avoid

Just as with anything new and exciting, the world of NFTs is not without its pitfalls. Let's go over a few common mistakes people make and how you can avoid them.

Avoiding Scams

Where there's money involved, there's usually someone trying to scam others out of it. Unfortunately, the NFT world is no exception. Here are a few tips to keep you safe:

Verify before you buy: Make sure the NFT you're buying is genuine. Some people create fake NFTs that resemble popular ones. Check the creator's profile and past transactions.
Secure your wallet: Keep your digital wallet safe. Use strong passwords and consider using hardware wallets for added security.
Be wary of too good to be true deals: If an NFT is selling for a fraction of its supposed value, it might be a scam. Do your research before buying.

Protecting Your Digital Assets

Once you've bought your NFTs, you need to keep them safe. Here are some precautions you can take:

Backup your wallet: Make sure to have a secure backup of your digital wallet. This can help you recover your assets if something goes wrong.
Use secure networks: Avoid accessing your digital wallet from public Wi-Fi or computers. These can be easy targets for hackers.
Update regularly: Keep your wallet software up to date. Updates often include security improvements.

By being aware of these pitfalls, you'll be one step ahead in your journey with NFTs and the future of digital assets. Now, let's take a glimpse into what that future might hold.

7. Future of NFTs

As we've seen, NFTs are already changing the way we perceive digital asset ownership. But what does the future hold for NFTs? Let's explore some trends and potential impacts.

NFT Trends

Despite being a fairly new concept, NFTs have shown promising trends. Here are a few that might shape the future of NFTs:

Virtual Real Estate: Believe it or not, virtual land is becoming a hot commodity. Places like Decentraland and Cryptovoxels are selling virtual plots for thousands of dollars.
Music and Entertainment: We're seeing musicians and entertainers releasing their work as NFTs. This could set a new standard for how artists monetize their work.
DeFi Integration: DeFi, or Decentralized Finance, is another booming area of the blockchain world. We're starting to see more integration between DeFi and NFTs, opening up new possibilities for digital assets.

Potential Impact of NFTs

The impact of NFTs on the world of digital assets could be significant. Here's how:

Democratizing Art and Content: NFTs allow artists and creators to sell their work directly to consumers, cutting out middlemen. This could lead to a more direct relationship between creators and consumers.
Creating New Markets: With the ability to tokenize virtually anything, NFTs could create whole new markets for items that couldn't be sold before.
Increasing Digital Ownership: As people become more comfortable with the idea of owning digital assets, we could see a shift towards more digital ownership in general.

While we can't predict the future with certainty, it's clear that NFTs and the future of digital assets are closely intertwined. By understanding NFTs today, you're positioning yourself at the forefront of tomorrow's digital landscape. So, are you ready to dive into the world of NFTs?

If you're intrigued by the world of NFTs and want to learn more about their potential for digital asset ownership, don't miss the workshop 'Intro to NFTs' by Andrea Orejarena. This workshop will provide you with a comprehensive understanding of NFTs and help you unlock their potential for your creative endeavors.