Digital art is becoming more popular, and well-known artists are increasingly participating in the selling of NFTs. On this occasion, we have put together a post about how to trade tokens and what an NFT marketplace is. And, first and foremost, this material will be valuable for individuals who have not yet comprehended how NFT works; it will serve as your beginning point.
What is NFT?
In the blockchain network, NFT is a non-fungible token. In essence, this is a digital certificate that certifies the ownership of a digital asset, such as an image, gif, video, or audio.
For example, bitcoins or $100 bills are fungible. Even though each note is unique, it will have exactly the same value as another $100. The first bitcoin mined, no matter what platform it is on or who owns it, has the same value as a recently mined bitcoin stored in another wallet.
Conversely, artwork or concert tickets are non-fungible . Something that is not fungible cannot be replaced or divided. It’s unique. They are objects of the same nature, but which have their own characteristics and their own usefulness.
We talk about “tokens” when they are digital units, which are exchanged with blockchain technology: 3D visuals, objects in a video game, or even a piece of land in a fictional universe. They are traded on online marketplaces dedicated to NFTs, connected to the blockchain, like Sandmilk.
How do NFTs work?
NFTs mostly depend on the platform where they are created. In this case, we are going to focus on Ethereum, which has the most of these crypto arts .
As we are talking about “ ownership ” here, no authority, no one can cancel your ownership of an NFT or recreate one exactly the same. In addition, they are also “permissionless”, meaning that anyone can create, buy or sell them without any authorization. However, the uniqueness report remains, even if anyone can view it.
Alternatively, an NFT can be compared to a one-of-a-kind trading card , displayed in an open display case for everyone to admire. The only specificity is that it belongs to one and only one person at a given time. In practice, it can be represented through a digital work of art, an image. In itself, it is the very existence as a digital object in the blockchain that makes an NFT unique.
Where can you buy and sell your NFT tokens?
You can sell and purchase NFT objects on blockchain platforms – there are many of them on the Internet. Some works as NFT marketplace with many categories, and some specialize, for example, in art or games. Some of NFT marketplaces are “closed” platforms that can only be traded after confirmation of the candidacy.
What is sold on NFT marketplaces?
NFTs fall into several main categories:
- Art: paintings, images, gifs, photos;
- Sports: cards, rollers, car parts;
- Finance: options, insurance;
- Games: characters, cards;
- Domain names;
- Words and tags;
We can all purchase, sell, trade, and manufacture NFTs through internet marketplaces like Sandmilk. A digital work’s creator or current owner will be allowed to set a price. Furthermore, there may be an auction where a bid is required, like in the instance of Beeple’s piece, which was sold at Christie’s.
As an NFT, any digital image may be purchased. However, there are several things to think about before purchasing a non-fungible token on the NFT marketplace.
For example, you’ll need to pick which market to purchase from, what kind of digital wallet you’ll require, and what kind of cryptocurrency you’ll need to complete the transaction. You may simply purchase and trade NFTs here, just like you do on Amazon.
How to start trading?
Create a crypto address
You must have an Ethereum address in order to purchase or trade NFT. Simply download a wallet that allows you to send and receive cryptocurrency to get started. It is often integrated into NFT platforms. This wallet will let you accept money for any future NFT sales.
Find the right platform
The next step is to locate an NFT marketplace that is appropriate for you. There are a plethora of them on the Internet. However, keep in mind that one of the most crucial factors to consider when selecting a marketplace is its security. When you register, you will be required to provide verification using one of the social networks, such as Facebook or Twitter.
Consider the costs
Let us now discuss money. The good news is that none of the NFT platforms charge any fees. However, there is still a cost to manufacturing and selling an NFT. When you “make” your NFT and sell it, you must pay transaction fees on the Ethereum network. These costs change on a daily basis, so you must keep track of them.
Blockchain is not a magical technology. It will not allow you to sell your NFT in seconds for a million dollars. It is critical to communicate. To make yourself recognized, you must be present on several social networks.
Do not forget to declare your sales
If you are a business or an artist, your revenue will be equivalent to the value of the ethers at the time of payment. If you intend to convert your ethers later, you must consider the price at the moment of the transfer. It all depends on your country’s laws.
The matter becomes more complicated if you are an individual. Because non-financial transactions do not fit within the legal definition of digital assets. An NFT must be treated as moveable property and hence subject to the capital gains regime for movable property. However, in this scenario, you should also evaluate your country’s present regulations.
Other features for your NFT
You can also add other characteristics to the newly created token. For example, blocked content is only admissible by the owner, therefore the buyer of the token.
Finally, we must remember that you must define the number of copies you want for the token. Before you sell the NFT thus created, it must undergo a pre-verification where its authenticity is verified. If all goes well, you can sell it with peace of mind.